But it was not to happen. Bob Potter was not on board and never would be. Potter had visited PARC in 1973, shortly after taking over the Dallas division. But he and the CSL engineers communicated like creatures of different species. "I went out there and I sat in their bean-bags, but I just couldn't get anything out of them," he groused later. "They were only interested in their own thing. They thought they were four feet above everybody else."
PARC's people returned the sentiment, dismissing Potter rudely as a hopeless technical illiterate whose exalted position owed less to managerial aptitude than to having the ear of Archie McCardell, Xerox's new president, a "bean-counter" with scarcely any instinct for marketing.*
Potter’s group had brought out a low-performance word processor in 1974 that failed in the marketplace. But instead of accepting the office task force's recommendation that Xerox throw its weight behind the Alto III, he pushed his own new machine, another nonprogrammable word processor called the Xerox 850—essentially a typewriter with enough memory in it to hold a few pages of a business letter long enough to be proofread.
For the rest of the summer Potter's and Ellenby’s planners staged a battle of numbers, producing contradictory analyses of the Alto's manufacturing costs to bolster their arguments—Ellenby trying to prove that the Alto could be mass-produced for less than the five-thousand- dollar manufacturing cost of the 850, and Potter that it could never meet its claimed price target.
Ellenby even enlisted the support of Xerox's most respected manufacturing engineers, experts from the product cost estimation division in Rochester. "The dispute was over screws and things, all the minor stuff," he recalled. "And they were the experts in that. As engineers they were most extraordinarily anal—in the right sense. They actually went through and asked me what would be the finish on the screws. Would I be using beryllium plate? Then they'd look it up and tell me how many cents that would cost. They did a very thorough job verifying that our costs were right. . . And Dallas still didn't believe it."
But as Ellenby gradually realized, the numbers were merely cannon fodder in a battle that was political to the core. It was Xerox's organizational structure, not cost estimates or technological visions, that was driving the two sides apart. The Dallas group knew that if they were forced
*McCardell s intoxication with figures would weigh on the company until his departure in 1977. He was named chief executive of International Harvester, over whose drift into bankruptcy and near extinction he presided, joined by Potter.
to add an entirely new product to their customary line of office machines, any hope of meeting their near-term sales and financial quotas for the year would be demolished.
"They had to sandbag the Alto III, because with it they wouldn't make their numbers and therefore wouldn't get their bonuses," Ellenby concluded. "In fact, it would have been an absolutely impossible burden on them to be successful in making typewriters and also introduce the world's first personal computer. And they should never have been asked to do it that way. So it was shot down like most things that have to do with numbers, based on rumor and wrong data."
With the power of tradition behind them, Potter and his political allies prevailed. On August 18 the word processing task force, reversing itself under pressure from McCardell and others, declared the 850 the official Xerox word processor. As a Xerox product, the Alto III was dead.
The news landed with a hard thud at PARC. Even Alan Kay, who had always proclaimed the Alto an "interim" machine (he once advised Pake to think of them like Kleenex, to be used briefly and discarded as soon as the next big thing came along), took the decision as a "huge blow." It was clearer than ever that PARC lacked the necessary juice to seize and hold the attention of anyone who mattered at headquarters. The researchers watched helplessly as Bob Potter and his product development group in Dallas continued to manufacture clunky and obsolescent electromechanical typewriting machines as though PARC had never existed—and got thrashed by the market into the bargain. In its three years of operation, the Dallas division had never had a profitable quarter.
Ellenby spent the next year trying to quell his disappointment by burying himself in another can-do project. This involved reengineering Starkweather's printer so the laser device could reliably keep pace with Xerox's fastest copiers, a problem harder to solve than anyone had expected. Thanks to a program called Orbit, a cunning shortcut developed jointly by Bob Sproull, a young graphics researcher, and Severo Omstein, a journeyman engineer whose distinguished record included working on the LINC with Wes Clark and on Bolt, Beranek & Newman's original ARPANET proposal with Jerry Elkind, Ellenby produced a machine known as the "Dover" in mid-summer 1977.
He was still waiting for his next assignment when, a few weeks later, Bert Sutherland dragged him into his office and told him about an unprecedented event scheduled for Boca Raton and already nicknamed "Futures Day."
It soon became clear that Ellenby's hand at the upcoming Xerox World Conference would be very free indeed. Futures Day, which was scheduled for the world conference s fourth and closing day on Thursday, November 10, was expected to be the PARC demo to end all demos, in full dress and with top-level production values. As one of his colleagues recalled, Ellenby responded by approaching the job "as though he was invading a foreign country."
The venture's scale seemed only to stoke his ambitions. He hired Hollywood producers and scriptwriters to prepare a two-hour multimedia stage show, and commandeered half of PARC's working Altos to ensure that the entire audience could have a hands-on experience; two DC-10 cargo planes were rented to transport all the equipment to Boca Raton. One day he outlined the program to Chuck Geschke, a CSL researcher who had signed on somewhat casually as logistics officer for the enterprise. Geschke sat through the meeting with a sense of impending catastrophe. "We were basically going to pick up PARC and put it all on an airplane and fly it across the country," he recalled. "I was thinking, 'Oh, my God, and we've got only two months left?'" Geschke was aware that the group would be fighting not only the calendar, but less than uniform support from their own colleagues. "The range of opinion at PARC," he recalled, "went all the way from 'This is the greatest thing we could possibly do,' to 'What an incredible waste of time' and 'You'll never pull it off.'"
Fortunately, Geschke himself decided to join the enthusiasts' camp. For too long, he thought, the prevailing attitude at PARC had been that it was a higher calling for a scientist or engineer to stay in research rather than to follow an idea through to the delivery of product. He concluded that this was no way to build anything people would buy. Hadn't they learned anything from the scorn of hidebound managers like Bob Potter?
"On the few occasions when we'd have McColough come by it was like getting a state visit," he said. "You'd get your fifteen minutes to pitch but there'd be no follow-through, no delegation to anyone who could actually understand what we were saying. We just weren't communicating." The more he thought about it, the more he was convinced that Futures Day would be PARC's best chance—or only chance—to break down the walls hiding its inventions from the world.
To make Futures Day happen, Ellenby had his pick of PARC's top engineers. In addition to Geschke as logistics officer, he recruited Tim Mott to supervise the marketing production and Dave Boggs to oversee the installation of equipment, and sent John Shoch to Stamford to work as on-site liaison with headquarters. Dick Shoup and Bob Sproull rounded out the platoon, along with product and manufacturing engineers from El Segundo whose resourceful scrounging had impressed Ellenby during the Alto II and Dover programs. The team grew steadily until it numbered sixty-five persons, all working frenetically against the looming deadline.
By late October they had assembled a dramatic presentation on a Paramount Pictures sound stage in Hollywood and buffed it to a high gloss, right down to an original orchestral score shamelessly evoking the soundtrack of Star Wars. Mott occasionally had to struggle to familiarize his freelance stage producers with a future th
at was more than a facade and flashing lights, but that actually worked. "Their bread and butter had been multimedia shows for corporate meetings, things like that," he remembered. "What was unusual for them, as it would have been for anyone, was the level of technology involved as well as the degree of vision that was to be communicated."
Peter McColough, who viewed PARC as his legacy and the World Conference as his party, took an intense personal interest in all the planning. He insisted that Ellenby deliver regular progress reports and in late October even attended a dress rehearsal at Paramount. From these encounters Ellenby took away an impression of a deeply burdened corporate chairman. McColough had lost the confident bright- eyed glow visible at the PARC dedication seven years earlier. In its stead he displayed the profound weariness of a captain steering a balky ship through a merciless storm.
One afternoon, treated to a private lunch with the chairman at the Stanford Club in Palo Alto, Ellenby took the opportunity to regale him with the full story of the aborted productization of the Alto III. The war over word processing had been waged deep within the corporation at the level of task forces and middle management. The chairman listened raptly, evidently hearing it all for the first time. Then, warming to his subject, Ellenby went too far. He capped the story with an amusing anecdote—at least he thought it was amusing—illustrating the cynicism about Xerox's costly and fruitless product planning that afflicted the company's own staff.
One day during the Alto III campaign, he said, he had a conversation with a friend from the corporate office. "John," the friend said, "you really think you've got a product program there, don't you?"
"Well," Ellenby said, "I think it certainly could be."
"You're wrong," came the rejoinder. "I'll tell you when you'll know you've got a product program at Xerox Corporation. You'll start seeing people turn up and make a couple of big bottomless pits outside your lab. Then trucks will drive up night and day loaded with hundred- dollar bills, and just pour them into those pits. Your only job, John, will be traffic control—and that's how you'll know you've got a product program at Xerox."
Instead of appreciating the wry yarn, McColough suddenly looked stricken. He changed the subject and brought the encounter to a close without giving Ellenby any clue to what had gone wrong.
He soon found out. McColough had recently been wrestling with the dire harvest of that same dysfunctional process. For the previous five years, 1,000 Xerox engineers and technicians had been working on a project code-named Moses, which aimed to develop the company's next great copier. Moses would be the vanguard of the Xerox counterattack against Kodak and its other big rivals. Fast and innovative, it was to offer such pioneering features as a high-speed document handler that could copy multiple pages by cycling them through the machine, wedged between two layers of clear plastic.
But by 1977, after the expenditure of $90 million—more than Boeing Corporation had spent in designing the 747—Xerox had not yet produced a machine that could credibly compete in the marketplace. Worse, Kodak had just introduced a superior product, with a document handler so fast that the Moses version still on the drawing board was already obsolete. Only a few days after his lunch with Ellenby, on the very eve of the World Conference, McColough made one of the most painful decisions of his career: He killed Moses outright.
The edict sent a shock wave through the entire company—not only because of the horrific financial toll, but also because it meant Xerox would have nothing but aging, derivative products in the market for at least the next two years. "Moses was supposed to lead us into the promised land," said one executive. "Instead the Red Sea came crashing down on us."
Back at PARC, Ellenby recognized that McColough had been girding himself to make the Moses decision at the very moment he was telling his tactless joke. "He made a very tough call," he recalled later. "And that was bloody stupid of me."
With the Moses debacle still painfully fresh, the Xerox World Conference convened on November 7 at the Boca Raton Country Club. As McColough hoped, the gaiety of the affair helped at least temporarily to dispel the gloom. The company spared no expense to keep its 500 guests entertained. There was deep-sea fishing and lavish dining. At one formal luncheon the keynote speaker was Henry Kissinger, only lately retired as secretary of state. A circus-sized tent was erected on the club grounds for a casino night at which everyone received an allotment of scrip, which winners could redeem for a motor scooter and other fancy prizes.
Meanwhile, Ellenby’s team worked like fiends to prepare for the final day, which PARC would have all to itself. Willing to brook no hindrance from Xerox policy or personnel, Ellenby kept in his possession a signed letter from McColough ordering the organization to provide anything he required in the event he found himself thwarted by a recalcitrant bureaucrat. He never had to use it, which is not to say he did not on occasion sail rather close to the wind.
"We broke Xerox rules when we needed to get things done," Ellenby recalled. "Certain things were expensed that probably never should have been." And not, to be truthful, only for conventional business. "Some of the guys decided I needed to have an alligator in my bathtub. So they went off in one of these airboats to where the pilot said he'd show them some alligators. Two very hefty engineers jumped in and wrestled this alligator into the boat, tied it up much against the protests of the pilot, brought it back, and stuck it in my bathtub. I expensed the floatplane for them, as 'special transportation' or some such thing."
The group's exuberance reached its climax on the conference's final night, when Ellenby threw a party for the entire Futures Day team, from engineers to truck drivers, at the Blue Bayou, a somewhat less than four-star Boca restaurant. The event was so festive it even attracted a few senior executives from the more demure official dinner a few blocks away—one of whom chose to drive his rented Lincoln Continental from the restaurant back to the country club by the shortest possible route, leaving tire marks all the way across the golf course.
Despite their week of conviviality, Xerox's guests might have been forgiven if they greeted the dawn of November 10 thirsting for good news. McColough's opening speech Monday morning had painted a dark picture of the company's performance. "We are being out-marketed, out- engineered, outwitted in major segments of our market," he lectured. "We simply have not been prepared for this . .. We are now faced with the urgent need for change within this company!" McCardell and David Kearns, an up-and-coming ex-IBMer who would shortly succeed McCardell as Xerox President, had followed over the next two days with downbeat assessments of their own.
Finally, on the last day, Peter McColough again took to the podium, this time in an attempt to revive the optimism with which he had tried to lead his company into the digital age. His instrument was the same vacuous phrase which had caused so much confusion from the start, but now it carried much more urgency.
" 'The architecture of information,'" he proclaimed, "is still the basic purpose of Xerox, except that it's no longer just a concept."
PARC's turn had finally come.
The Futures Day presentation that morning was like Doug Engelbart's famous San Francisco demo on steroids. The club's vast ballroom boomed with portentous music. "The problem is paper," intoned a professional narrator, while actors and PARC engineers piled onstage to demonstrate Altos, the Ethernet, even a prototypical color printer, all working in perfect harmony to establish Xerox's rightful place atop the world of office automation.
The audience watched people send and receive real e-mail, collaborate on joint projects, write memos in Japanese characters, and conjure up engineering schematics on the Alto's arresting black-on-white display—all live. Secretaries typed letters and shot them over the network to a laser printer, while engineers designed buildings on a video screen and software developers debugged code. If there had been any doubt that PARC could develop a marketable product, it was dispelled by the debut of the Xerox 9700—a two-page-per-second laser printer based on Starkweather's mac
hine that would anchor the company's lucrative franchise in that developing market for years to come. But even the 9700 was trumped by the Pimlico, a prototype color laser printer built by Sproull and Ron Rider as a rush job for the Boca demo.
Adding to the thrill was the element of pure surprise. Determined to keep the demo shrouded not only from the prying eyes of IBM, which maintained a research lab nearby in Boca Raton, but from Xerox's own executives, Ellenby had taken the precaution of hiring his own security force (provided by a company conveniently owned by the Dade County sheriff's son-in-law).
"So Futures Day came as a complete shock," Ellenby recalled. "Not only the breadth and comprehensiveness of the products but that they all worked flawlessly was quite astonishing to the senior management."
Finally the wowed audience trooped off to a catered lunch while a platoon of forklift trucks moved the equipment off the stage and into a capacious demonstration room, where they would be accessible for hands-on demos for the rest of the day. Unbeknownst to the guests, this part of the demonstration almost failed before it started, for Florida's humidity and the club's meager air conditioning made the room so hot it threatened to blow the computers' delicate circuits. (The Altos always behaved flakily in hot weather, even at home in Palo Alto.) Ellenby averted catastrophe by renting one of the refrigeration trucks Eastern Airlines employed to keep its planes cool on the ground at the Miami airport. Since the vehicle was not licensed to drive on public thoroughfares, it was provided with a state police escort to Boca Raton, where Boggs and Sproull managed to ran a ventilation pipe through the kitchen and into the meeting center.
Dealers of Lightning Page 32