Imagine the value of cornering the technological market development and launch? Whose budget would sup- in personal computing. How much would a five-year port it, and the PARC in general? By leaving such tough window of competitive advantage be worth to a com- decisions unmade, Xerox wasted valuable time and pany today? It could easily mean billions in revenue, a squandered its technological window of opportunity. stellar industry reputation, future earnings ensured- Even when clear indications showed that competitor and the list goes on. For Xerox Corporation however, Wang was about to introduce its own line of office sys- something strange happened on the way to industry tems, Xerox could not take the step to bring the Alto to leadership. In 1970, Xerox was uniquely positioned to market. By 1979, Xerox's unique opportunity was lost. take advantage of the enormous leaps forward it had The Alto was no longer a one-of-a-kind technology, and made in office automation technology. Yet the company the company quietly shelved any plans for its commer- stumbled badly through its own strategic myopia, lack cial introduction. of nerve, structural inadequacyes, and poor choices. This Perhaps the ultimate irony is this: here was a com- is the story of the Xerox Alto, the world's first personal pany that had made its name through the phenomenal computer and one of the great "what if?" stories in bust- success of a highly innovative product, the Model 914 ness history. photocopier, but it did not know how to handle the The Alto was not so much a step forward as it was opportunities presented by the next phenomenon. The a quantum leap. Being in place and operating at the end Alto was so advanced that the company seemed unable of 1973, it was the first stand-alone personal computer to to comprehend its possibilities. Executives did not have combine bit-mapped graphics, a mouse, menu screens, a strategic focus that emphasized a continual progress icons, an Ethernet connection, a laser printer, and word sion of innovation. Instead, they were directed toward processing software. As a result of the combined efforts remaining neck-and-neck with the competition in an of an impressive collection of computer science geniuses Incremental approach. When competitor IBM released headquartered at Xerox's Palo Alto Research Center a new electric typewriter, Xerox responded in the same (PARC), the Alto was breathtaking in its innovative incremental way. The organizational structure at Xerox appeal. It was the PARC's answer to Xerox's top man- did not allow any one division or key manager to agement command to "hit a home run. " Xerox had prof- become the champion for new technologies like the Alto. ited earlier from just such a home run in the form of the In 1979 Steven Jobs, president of Apple Computer, Model 914 photocopier, a technological innovation that was given a tour of the PARC complex and saw an Alto provided the impetus to turn Xerox into a billion-dollar In use. He was so impressed with the machine's fea- company in the 1960s. The Alto represented a similar tures and operating capabilities that he asked when it achievement. was due to be commercially launched. When told that What went wrong? What forces combined to much of this technology had been developed in 1973, ensure that no more than 2,000 Altos were produced Jobs became "physically sick" he later recounted, at the and that none were ever brought to market? In the end, thought of the opportunity Xerox had forgone. they were used only inside the company and at some university sites. The answer could lie in the muddled strategic thinking that took place at Xerox while the Alto Questions was in development. 1. Do you see a logical contradiction in Xerox's will- The history of Xerox during this period shows a Ingness to devote millions of dollars to support company that stepped back from technological leader- pure research sites like the PARC and its refusal to ship into a form of incrementalism, becoming content to commercially introduce the products developed? follow IBM's lead in office automation. Incrementalism 2. How did Xerox's strategic vision work in favor of refers to adopting a gradualist approach that plays it or against the development of radical new tech- safe, avoiding technological leaps and large risks, which nologies such as the Alto? consequently averts the possibility of large returns. In 3. What other unforeseeable events contributed to 1974, Xerox decided to launch the Model 800 magnetic making Xerox's executives unwilling to take any tape word processor rather than the Alto because the new risks precisely at the time the Alto was ready Model 800 was perceived as the safer bet. During the to be released? next five years, a series of ill-timed acquisitions, law- 4. "Radical innovation cannot be too radical if we suits, and reorganizations rendered the Alto a casu- want it to be commercially successful." Argue alty of inattention. What division would oversee its either in favor of or against this statement