XEROX’s CENTER OF MISSED OPPORTUNITIES

[Anonymous]

Xerox’s centre of missed opportunities
Xerox takes sharper strategy on research
Founded
in 1970 before the dawn of personal computing, Palo Alto Research
Center (Parc) has a venerable role in the annals of Silicon Valley. A
research centre of US copier maker Xerox, Parc is credited with
inventing the mouse, Ethernet, the laser printer and other landmark
technology.
Those
milestones are proudly chronicled on a wall exhibit within Parc’s
offices in Palo Alto in the hills near Stanford University.Yet the
exhibit, complete with timeline and mounted gadgets, also reflects a
track record of missed business opportunities.Parc has been criticised
for failing to commercialise its innovations, letting them flounder or
fizzle. Much to Parc’s chagrin, others have gone on to create wildly
successful businesses based on similar technology a few years later.The
now extinct “ParcTab” predated the Palm Pilot by eight years. Apple
Macintosh’s graphical user interface, which marked a sea change for
personal computers, was heavily inspired by Parc’s innovations.
Now
Parc is trying to prove it can launch technology that can thrive
outside its walls and not just hang decoratively on them.“In the past,
creating new knowledge was enough,” said Mark Bernstein, president and
director of Parc. “Now, it’s ‘How can my work matter to the
business?’”Parc began overlaying a sharper business strategy on to
research when Xerox spun off the centre as a wholly-owned subsidiary in
2002.Now Parc is generating revenue by forming partnerships with
corporate sponsors, government and research institutions, as well as
incubating businesses and leveraging intellectual property.The move is
part of Xerox’s larger push to expand beyond the boxes – printers and
copiers – that its brand is synonymous with as it pushes into
technology services.The corporate overhaul also applied to Parc, which
has cast a wider net for innovative research. New partnerships includes
a collaboration with biomedical centre Scripps Research Institute in
San Diego to develop ways to identify cancer cells using laser scanning
technology similar to that found in Xerox printers.This year Parc
teamed up with with SolFocus, maker of low-cost solar energy systems.
SolFocus is a start-up with just a handful of employees, but the
alliance harnesses resources for research in the hot area of energy
efficiency.Parc has cultivated government partnerships, such as a
subcontract with US space agency NASA to develop robots for space
exploration. It has also signed multi-year contracts with research
sponsors such as Japanese IT company Fujitsu to develop “ubiquitous
computing” sensors for use in retail, health care and transportation.
Parc’s shift was spurred by Anne Mulcahy, who became chief executive of
Xerox in 2001.Ms Mulcahy has pulled Xerox back from the brink of
bankruptcy, slashed jobs and restructured operations to return Xerox to
profitability. A revamp of Parc was part of the company’s turnround
plan.Parc’s revenues from sponsor contracts were virtually non-existent
a few years ago but now generate about $30m annually.Parc’s new
partnerships offer a chance to innovate beyond Xerox’s traditional
realm of office equipment, but ties to its parent remain firm.Although
Xerox has aggressively cut costs as part of its turnaround, it spends
about $940m annually on research, or about 6 per cent of total revenue,
in several global development centres. More than $50m of Parc’s budget
comes from Xerox.Parc contends that Xerox’s legacy of understanding how
technology is used by customers differentiates it from academic
research centres.Critics say that in the past, Parc spun off businesses
prematurely without fully understanding the markets they entered.Now
Parc is in discussions with venture capitalists about how to push
projects forward. Sometimes “venturing is the most efficient way to get
technology into the world”, says Mr Bernstein

[Author]

May 16, 2006 at 11:35 AM