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Reinventing Xerox PARC As a Money Maker 99

Posted by timothy
from the with-a-method-or-mechanism-for-shaking-it dept.
bonch writes "After a historical reputation for not monetizing breakthrough technologies (including the mouse and desktop GUI), Xerox PARC is now focused on making money from its inventions. CEO Anne Mulcahy vowed in 2001 to return the company to profitability, encouraging 'open innovation' and mandating that research turned a profit. The latest innovation is thin-film printed electronics, intended for a variety of products, from RFID readers to price labels."
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Reinventing Xerox PARC As a Money Maker

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  • by quacking duck (607555) on Thursday December 22, 2011 @10:39AM (#38459190)

    Talk about creepy timing.

    Jacob Goldman, Founder of Xerox Lab, Dies at 90 [nytimes.com]

    In this article they even discuss criticisms of Xerox not commercializing technologies developed at PARC.

    • by morgauxo (974071)
      She killed him.
      • She actually reincorporated PARC as a company intended to make a profit (rather than doing pure R&D) 10 years ago, so I doubt it.

        More like someone saw that he had died, then looked into what PARC is doing right now and wrote an article about it.

  • by klingens (147173)

    Another corporation similar to Rambus which invents stuff and then demands royalties for licenses and patents. Just what we needed for economic growth!

    • Re:Yay! (Score:5, Informative)

      by mr1911 (1942298) on Thursday December 22, 2011 @10:50AM (#38459302)

      Another corporation similar to Rambus which invents stuff and then demands royalties for licenses and patents.

      Not at all. PARC invents things and then licenses their inventions to those that would like to commercialize them. Rambus patented something they managed to get written into a JEDEC specification.

      You are free to choose whether or not you use PARCs IP. Rambus tried to make it impossible to conform to an industry specification without infringing on their IP.

      One is a business, one is a troll. If you can't tell the difference, then too bad for you.

    • by Stellian (673475)

      It seems to me that if an independent research lab can invent the building blocks of the modern PC and not profit from it, than clearly a large corporation with limitless resources and pressured by a competitive market can innovate without the need of a patent system. The innovation was "stolen" by the competition ? Great, work on getting it cheaper, or work on the next big thing, without a comfy patent that can neuter the competition. So how about we ditch this patent system altogether ?

      I'm not saying Xero

      • by clodney (778910)

        It seems to me that if an independent research lab can invent the building blocks of the modern PC and not profit from it, than clearly a large corporation with limitless resources and pressured by a competitive market can innovate without the need of a patent system.

        No corporation has limitless resources. Even behemoths like Google or MS or Apple have pressures to limit spending. What corps with big cash reserves can do is invest in a large number of areas, knowing that most of them will never payoff, looking for the big winner.

        The economic cost of the patent system is higher than the value it delivers through innovation: XP was able to deliver phenomenal results with limited compensation.

        One one hand profitable patents are not necessary for innovation as explained above, and on the other hand patents are frequently harmful to innovation: patent trolls, preventing the competition from building on your invention etc.

        Without patent protection the bar for finding the "big winner" is substantially higher, and therefore the appetite for corporate research arms like PARC or Bell Labs will be significantly lower.

    • by mattack2 (1165421)

      Another corporation similar to Rambus which invents stuff and then demands royalties for licenses and patents.

      How DARE them! Inventing useful stuff that we use every day, and expecting PAYMENT for it!?!

      Go back to your teepee, hippie.

  • by CaptainLard (1902452) on Thursday December 22, 2011 @10:43AM (#38459228)
    Is it a researcher's job to make a profit? The point of research is to learn something new, whether it works or not. Then its up to the business side to decide what to do with it. Perhaps instead of mandating that PARC must make money, the management should mandate they make smarter decisions on which inventions are marketable or not instead of giving away the mouse and GUI. Hows that 11 year old quest to return to profitability going?
    • Maybe they should research business models
    • CaptainLard:

      Is it a researcher's job to make a profit? The point of research is to learn something new, whether it works or not.

      Ray Stanz:

      I've worked in the private sector. They expect results.

      • by CaptainLard (1902452) on Thursday December 22, 2011 @11:26AM (#38459720)
        Fair enough. Then the first order of business should be to change the name from PARC to PAPDC (palo alto product development center) so no one gets confused.
        • by shaitand (626655)

          If you work in a for-profit entity your job is to make them money, no matter what your title is.

    • by captbob2002 (411323) on Thursday December 22, 2011 @11:20AM (#38459640)

      My thinking, too. Was it PARC's fault that Xerox did not follow-up on the inventions they created? Management was too busy thinking about making paper copies rather then looking ahead.

      Kodak has been in the news, too, of late due to their financial issues. Perhaps when they were doing their ground-breaking work in digital imaging it didn't look like it could be a money maker - since their work predates ubiquitous PCs in every home. But once the PC revolution started to really take off in the late eighties and early nineties and the emergence of the World Wide Web they should have revisited their digital imaging decisions.

      If the "captains of industry" in the US did more navigating by the stars and a little less dead-reckoning perhaps their firms would not be on the ropes.

      • by An ominous Cow art (320322) on Thursday December 22, 2011 @02:15PM (#38461612) Journal

        If the "captains of industry" in the US did more navigating by the stars and a little less dead-reckoning perhaps their firms would not be on the ropes.

        Less astrology, more necromancy!

      • by Darinbob (1142669)

        Xerox did try to productize a lot of things. They did sell the Alto and Dorado workstations, which were slick items. But they were a bit early in the workstation market so that later offerings were cheaper and more flexible with broader appeal. You can't blame PARC for that. Maybe Xerox decided they didn't want to be a full blown workstation company.

    • by boristdog (133725) on Thursday December 22, 2011 @11:40AM (#38459868)

      Research is a tough game. I used to work at a research consortium that was funded by several large corporations. In their heyday in the 80's they made a ton of money inventing actual new things (Diamondvision was one) and spun off successful companies with each big commercial invention. But a lot of the research was pretty humdrum and just went to improved technology (and patents) for the funding companies. Some of the research was promising but still hasn't really paid off. Much of that has been transferred to other organizations since the demise of the organization.

      <Rant>
      How did it die? Someone though it would be good to run it more like a corporation with a big name CEO who knew nothing about technology - seriously, the guy's secretary had to print out his e-mails for him to read, and she typed his handwritten responses back into the computer. He brought on more clueless fucktards at the executive level...and eventually they all bankrupted a well-funded non-profit organization with their huge salaries, perks, bonuses and some outright theft. I managed to leave just a few weeks before one of the executive staff just took several million and left. Because of the dirt he had on the other execs, he was never prosecuted. They are the 1%.

      </Rant>

    • The point of government research is to learn something new, whether it works or not.

      FTFY. Commercial research, as you pointed out further down, includes product development. (Of course, it also includes developing things that help you develop the products as well.) Xerox PARC was/is funded by the sale of copy machines. It isn't unreasonable to require researchers to focus on developing products that help fund more research.

      You shouldn't expect Xerox to fund projects that are solely designed to learn something new. Sometimes they will and that is great, but at the end of the day, the res

    • by drinkypoo (153816)

      Is it a researcher's job to make a profit?

      At a corporation, it's a researcher's job to do work that supports the bottom line. This is why publicly-funded research is critical, and I don't mean baby-killer grants, either. When you start depending on corporate money to fund "public" research you end up with the situation we have today where corporations use up grad students without even having to pay them, wind up owning patents that they get to sell back to us at our expense, or worse, burying the technology like BP and DuPont are doing with Butanol

    • by toxonix (1793960)
      I worked on one project that was exactly 7 years ahead of its time. Management laid us all off and said "this will be cool in 7 years, but right now its not feasible". Sure enough, exactly 7 years later I was playing HALO head to head with people across the country in real time on a broadband connection to my house. Some of our team got picked up by Microsoft to work on XBox Live fortunately. Xerox CAN make PARC profitable, but they actually have to make products out of research. Xerox is looking for mor
    • by Darinbob (1142669)

      If they had tried to monetize the mouse and GUI more then those technologies could have backfired. Similarly if AT&T had been allowed to monetize UNIX early on then I think it would have fizzled. Sometimes things take off and become successful precisely because they're not locked down by people intent on a profit. The big advantage of Apple getting ahold of the GUI was that it made it accessible on small computer and not only the $10K workstations. People also experimented with a lot of different in

      • Nothing but management shortsightedness prevented Xerox from developing and selling a $2k computer with mouse and GUI before anyone else. Xerox had the money and technology that could have made them into the equivalent of what Microsoft plus IBM are today. Xerox management didn't have the vision.
  • Lingo (Score:5, Interesting)

    by Dyinobal (1427207) on Thursday December 22, 2011 @10:43AM (#38459230)
    Is 'making money from it's inventions' code for suing people for patent infringement and patenting every dumb little thing possible. Or will they actually being doing something productive?
    • by mr1911 (1942298)

      Is 'making money from it's inventions' code for suing people for patent infringement and patenting every dumb little thing possible. Or will they actually being doing something productive?

      Protecting one's IP often results in suing others that infringe. If that is your major consideration, you probably won't like PARC's model, or just about any other business that seeks to innovate.

      As for the rest of it, that depends on your definitions of "every dumb little thing possible" and "something productive". It seems like someone always thinks an invention is obvious after someone else has shown them how to do it.

  • Dear CEOs of World,

    Monetization is a synonym for death by a 1000 cuts, Being used as a way to placate shareholders, it means you have more serious issues going on than just a lack of monetization. Signed,
    The World
  • by Viol8 (599362) on Thursday December 22, 2011 @10:52AM (#38459324)

    .... where Xerox marketed the Xerox Alto as the first commercial GUI driven computer in 1973? I'm guessing technology would have advanced to todays levels by the early 90s, MIcrosoft most likely wouldn't exist as the IBM PC would never have been developed, at least not in its initial form, and even Apple would probably have faded away after managing to sell a few "old fashioned" Apple I & 2s in the mid 70s.

    But - would the 8bit home computers have existed? If not then the huge 80s influx of hobbyists into programming would never have happened.

    • by tepples (727027)
      I imagine that without PARC, the GUI would have developed through a slightly different path involving taking concepts from video games and applying them to things other than games.
    • by Dupple (1016592)
      Commercial is the key word. The Alto would have been too expensive as it was. The price would have had to come down for a similar revolution/adoption rate to have happened.
      • Exactly. Software is one part of the puzzle, hardware being the other. The hardware to run a decent Gui wasn't cheap enough for mass production until the mid 80's or so. The Alto, if produced commercially would have been as successful as the Apple Lisa. But Maybe, we could have had a jump start on software for Gui's. And just maybe Xerox would have produced a follow up to the Alto that would have been cheaper, similar to what Apple did to produce the Mac.

        • by Darinbob (1142669)

          I remember in the 70's that you'd see stories on television with people using high end graphical workstations (not the desktop metaphor though). For instance with automobile design they'd have a 3D model of a new car that they could rotate and view from different direction. So people knew about this stuff but they knew this was expensive and that you'd never just buy something like it from Radio Shack or even Heathkit.

          The "computer for everyone" concept really didn't take off until the breakthrough app o

        • The limiting factor was RAM. 64 kbits cost $10 in 1980. A 640x480 bit-mapped display 8 bits deep required $400 worth of RAM, a non-trivial fraction of the total system cost.
      • by MichaelCrawford (610140) on Thursday December 22, 2011 @11:22AM (#38459670) Homepage Journal

        I remember like it was yesterday when I saw one demonstrated at a computer store. But because I was but a starving student, and the Lisa had a whole megabyte of memory and what for the day was quite a large, bright monochrome graphics display, I knew that I wouldn't have the ten grand to actually buy one any time soon.

        The original Macintosh was a largely successful attempt to fix the problem of the Lisa's exhorbitant retail price. The "1984 Superbowl Ad" Macintosh just had 128 kb of RAM and a 512 by 342 monochrome display. The model I eventually bought used had just a single-sided 400 KB floppy and no hard drive.

        It was not possible to develop real software on the original Macintosh. Instead developers used cross-compilers with Lisas as the host.

      • ... in the same way as consoles. Sell the hardware for less than cost price and make up the difference on the software. People are more likely to spend money when they've already made an investment. Its getting them to part with money in the first place thats the hard part.

    • where Xerox marketed the Xerox Alto as the first commercial GUI driven computer in 1973? I'm guessing technology would have advanced to todays levels by the early 90s

      Why? Today's (computer/IT) tech is largely driven by the ubiquitous PC and the availability of really cheap microprocessors. GUI's don't enable either. Nor will GUI's make mini- and micro- computers any cheaper, in fact they'll hog processing power (making them less attractive) and/or raise the price of their graphic terminals (ditto).

      • by Viol8 (599362)

        "availability of really cheap microprocessors. GUI's don't enable either."

        No , but they may have provided extra impetus. Back in the 70s and early 80s CPU speed increases year on year were pretty modest.

        • by Darinbob (1142669)

          There was impetus. It just wasn't with the home user who had no need for a computer. The impetus was there with the workstation market where they did want faster CPUs and cheaper hardware, and there were great advances going on. People had awesome GUI based systems before Windows existed and they were in common use in universities and corporations. Sun Microsystems grew up and made its mark by making these things better and cheaper than the competition at a time when the home computer user naively thoug

    • Xerox tried to commercialize the Alto research with the Xerox Star in 1981.

    • by timeOday (582209)
      Better yet, what if Apple had come out with the i7 Macbook Pro in 1977 instead of that crummy Apple II? If they had priced it right, and thrown in 512 GB SSD drive and 8 GB RAM, I think they could have got a lot of traction in the marketplace. If only they hadn't been so clueless!
      • by Viol8 (599362)

        Err, riiight. You do realise that the Alto and its GUI did exist in 1973 but was only used internally to Xerox and never made available to the general public don't you? Are you some apple fanboy who thinks the GUI arrived with the apple mac?

        • I don't recall who invented it but I think it was someone at Stanford rather than at Xerox PARC.

          I expect that at the time they would have used it to drive glass TTYs. That's not as dumb as you think; one of the original Bell Labs UNIX developers created a purely textual mouse and keyboard driven GUI that was incredibly lightweight compared to today's graphics-heavy desktops.

          • by mattack2 (1165421)

            SRI. Douglas Englebart. http://en.wikipedia.org/wiki/Computer_mouse [wikipedia.org]

            (The trackball was invented over 10 years earlier in a secret military project.)

            The biggest shame to me is that that mouse was used *along* with the keyboard to do more sophisticated things. (Yeah, obviously we control-click, and shift-click and hold down modifiers to do different things than normal copy, but those are comparatively simplistic.)

        • by timeOday (582209)
          OK, I exaggerated. But it's all too easy to imagine in retrospect that Park Xerox had this great futuristic computer that could have been marketed, but that is far from the truth. There was never a lack of ideas on how to use processing power at the time to make things nicer for the user, but affordable hardware wasn't good enough yet, and the Alto was not built on marketable hardware.
    • by Animats (122034) on Thursday December 22, 2011 @12:56PM (#38460682) Homepage

      .... where Xerox marketed the Xerox Alto as the first commercial GUI driven computer in 1973?

      As someone who visited PARC in 1975, and later spent some time programming an Alto, I can say that it wouldn't have been cost effective. PARC's plan, in the early 1970s, was to figure out what the future of computing would be like when the cost of hardware came down. The Alto was built without much regard to cost. The page-sized CRTs were hand-built at PARC itself, and the CPUs were made by Data General for Xerox. They were minicomputers, not microprocessors, basically Data General Novas with a different microcode. An Alto cost upwards of $20,000 to make.

      Before PCs, there was a whole industry, led by Wang, in what were called "shared-logic word processors". These were a group of dumb terminals connected to a central unit with a CPU, disk, and printer. Places which did a lot of document revision, like law offices, bought such systems. Xerox came out with the Xerox Star, which was a cross between Alto technology and the dedicated word processor concept, and went into that market, at too high a price point. This was in the late 1970s. IBM introduced the IBM Displaywriter in 1980, with the same monitor that was later used with the IBM PC. Three displays, a printer, and a central control unit cost $26,000.

      Getting costs down was a huge problem. The consensus in the industry was that the minimum useful personal computer would be a "3M" machine - one megabyte of memory, one MIPS of CPU power, and one megapixel of display. The Alto was there, but the early PCs, the Apple II, and the original Mac were well below those specs. The Lisa approached the 3M level but cost too much. (The original 64K Macintosh was a miserable flop commercially. Until the 512K Mac and the laser printer, with the specs approaching the "3M" level, did it make money.)

      There was another line of development - UNIX workstations of the early 1980s. For about $20K, Apollo, Sun, Three Rivers, IBM and others sold UNIX machines with big screens and enough CPU and RAM power to get something done. They all suffered from appallingly bad GUIs. Then, as now, the UNIX crowd had no clue about user interfaces. For years, Sun workstations mostly had nothing but text windows open. (Plus an analog clock, the most widely used graphic program.) What passed for a GUI tended to be some scheme for front-ending command line programs with a menu system.

      If the UNIX industry had had a clue about graphics, the industry might have gone that way when the hardware cost came down.

      • by drinkypoo (153816)

        Interestingly, Sony was a player in both the "shared-logic word processor" market, except I believe it was a more complex publishing solution than simple word processing, and also in the early UNIX workstations ("NEWS"). I wonder what the licensing was like :)

        The Unix world didn't really get a clue about graphics until Motif, by which point they lost the potential advantage of being first.

      • Some small corrections:

        Data General Nova machines were popular at Xerox PARC before the Alto was developed, so one of the various instruction sets that the Alto supported was that of the Nova allowing old software to be easily ported to the new machine. Other than that, there was no relation between Xerox and Data General.

        While the Alto and its successors (including the Star and specially the Dorado) were very expensive, there was the Notetaker project that would have had a huge impact if it had been releas

    • by mcgrew (92797) *

      You're leaving out the biggest part of the equation -- cost. In 1973 a Cray Mark II, the world's fastest computer, was less powerful than today's iPhone. Today's PC software wouldn't have run on even a mainframe back then. In 1971 or 1972 (I don't remember) I was completely inside a computer that was designed to run a C-5A flight simulator. The computer was an entire building full of rows and rows of bookshelves filled with printed circuit boards. The cockpit view wasn't even computer-generated, it used 35m

      • 8 bit (monolithic) processors were developed as an improvement on 4 bit processors. At the time that 8 bit processors were new, a single chip 16 bit CPU would have been nearly impossible (due to, among other things, low yield).

        In those days, ICs were still laid out by hand, using sticky colored plastic on a clear, dimensionally stable plastic background. Those were the days when a company would occasionally "lose" a process: be unable to produce a chip, or a whole family of chips, because something mysterio

    • by Darinbob (1142669)

      The Alto was too expensive and too application specific. Xerox wasn't a workstation maker, having it change company direction to promote this would be as silly as HP deciding they were really a printer and PC company. They did push their workstation lines though, in as much as they were intended for desktop publishing (part of Xerox core business). 1973 was too early for this and the workstations were seriously expensive and the market was small. A decade later other companies made the workstations bett

    • We'd be programming in either Interlisp or Smalltalk-80.

  • by MichaelCrawford (610140) on Thursday December 22, 2011 @11:17AM (#38459604) Homepage Journal

    Not at Xerox PARC in Palo Alto, but in Pasadena. He was a fellow Caltech student.

    They had a color photocopier under development that printed on paper the size of an unfolded newspaper.

    Now of course he wasn't supposed to, but just for grins he photocopied one side of a twenty dollar bill. He showed me both the original and the photocopy. I was completely unable to tell the difference between the two.

    Now this was in 1984. How many of you are old enough to recall what photocopiers were like in 1984? I don't think color copiers even existed outside the laboratory.

    Xerox could be bigger and richer than Microsoft, Intel and Apple all put together if they had ever gotten products like that into the market.

    When was Xerox PARC founded? In the 1960s? And only just now they're thinking they should make a profit with it?

    Apple's ATG - Advanced Technology Group - was well-known for just the same kind of nonsense. They were always showing off incredible new products at developer conferences, such as tablet computers with handwriting recognition, but they were reknowned for never actually bringing any of those companies to market.

    Contrast this with Bell Labs that among many other valuable, money-making products, invented the Transistor.

    • by Idbar (1034346) on Thursday December 22, 2011 @12:07PM (#38460132)
      I love all those stories. But the problem is if the machine has actually prohibitively to build. I've seen many interesting research projects but if they had no market for it because nobody will pay the 2 million dollars the printer costs (without even considering the ink) then it won't make it to the public. I'm sure though they used their results for further research to make them more affordable.

      The most recent case I remember the most... is the Color E-ink screen, I saw perfectly good/working prototypes in 2005 for digital frames. But for some reason we're flooded with low-res LCDs Frames, with useless features like MP3 players.

      Who knows what the reasons are not to put stuff in the market.
      • by Krishnoid (984597) *
        • photocopied one side of a twenty dollar bill. He showed me both the original and the photocopy. I was completely unable to tell the difference between the two.

        • pay the 2 million dollars the printer costs

        • profit!
    • by drinkypoo (153816)

      IIRC it's only illegal to make a same-size reproduction of a bill if it's double-sided. If you make a double-sided reproduction it has to be significantly smaller or larger.

    • ... he photocopied one side of a twenty dollar bill. He showed me both the original and the photocopy. I was completely unable to tell the difference between the two.

      The original was the one with printing on both sides.

      (I'll get my coat.)

  • by splodus (655932) on Thursday December 22, 2011 @11:21AM (#38459650)

    The funding councils that back research at UK universities now require an 'impact' plan; evidence that what is being funded will have a 'positive' impact in terms of society and commercial interest. This was brought in by the previous government, and backed by the current one. At the time most researchers were set against it, pointing out that so many of the inventions and discoveries that have been so beneficial to us all came not from a will to research a specific issue, but from something else, and hence little more than an accident.

    I thinks it's troubling that the idea of research for its own sake seems to be dying. In effect we're limiting the overall breadth of investigation, and perhaps that will result in fewer 'useful' discoveries after all.

    • by k6mfw (1182893)

      I was thinking the same, I think what made PARC, Bell Labs, etc. successful is they had smart people acting like "alchemists." Now embracing a good idea and putting it to the market is wise for a company, however, if you first have to show positive impact of revenue stream then that will create a "glass ceiling." It seems new concepts come about because someone had a passion to make something, and it would be nice to make a few bucks in the meantime. But if intent is to make lotsa money, then that passion

    • Every scientist, tinker, chemist, and engineer who "accidently" found something great had an expressed purpose (at least in their own minds) and intention to the experiments/research they were conducting.

      For example http://science.discovery.com/brink/top-ten/accidental-inventions/inventions-03.html [discovery.com]
      " 18-year-old chemist William Perkin wanted to cure malaria; instead his scientific endeavors changed the face of fashion forever and, oh yeah, helped fight cancer. "

      While working over Easter break in his home lab

      • It was the result of a long commute.

        The compressors we were using made the image files small enough but the decompressors were pathetically slow on the 20 MHz CPUs of the day.

        One reason for that is that most compressors are designed to eliminate the redundancies resulting from frequently repeated sequential patterns. Zip, GZip, LZW and so are on great for compressing natural language text, but it's a totally dumbfuck idea to compress two-dimensional graphics with them. I was totally appalled when I learne

      • by splodus (655932)

        I don't doubt that those who are granted funding at UK universities, having satisfied the 'impact' criteria, will often invent or discover things equally useful but totally unexpected.

        What troubles me is that by making every research project comply with the impact criteria, other avenues of inquiry are cut off. At the moment, a proposal to find out (for the sake of argument - I've no idea if it's a good question) why dandelions are yellow would not get funded, but a proposal to boost the yield of rape seed

        • by Lashat (1041424)

          We certainly agree that strict compliance is not helpful in exploratory research and subsequent discovery. I hope the expectation is NOT to strictly control experimentation, holding it to the "letter of the funding grant", but to at least establish a target goal or outcome to aim for.

          I am by no means an expert on funding research grants. This next question I'm asking because I don't know the answer. Is there an entity (university, company, government dept, individual, or other group) that simply funds o

          • by splodus (655932)

            That's a good question. In the UK it used to be the case that the main funding councils (known collectively as RCUK) would fund any original research based on its contribution to the field. Under the 'Pathways to Impact' criteria all RCUK and most of the other councils require a submission with all applications stating to whom the research might be useful and how they will benefit. In theory there does not need to be an economic benefit provided there is some societal benefit (for example digitising and ann

  • When an organization is focused on providing a corridor to augment human technology it is a service to humanity in the sense that often great and profound things come from these services. As soon as it focuses on making money, and generating revenue, the deeper mission statement is lost, and it becomes just another business concerned about the lowest common denominator to minimize overhead and maximize profit. This is what sucks most of what could be great and interesting about us, and contributes to our d
  • by ErichTheRed (39327) on Thursday December 22, 2011 @12:30PM (#38460416)

    Forget all the patent and IP insanity that goes on in the modern world for a minute, and think about what it means for a company to do its own basic research. Companies did R&D because they knew products come and go, and that they would profit handsomely if something their researchers discovered was key to a profitable product. I think that philosophy comes from a time when companies were run for the long term rather than a few quarters into the future. Today, only the big boys can really support their own R&D divisions, such as IBM, Microsoft and GE. HP and Xerox used to have big R&D facilities, and Bell Labs was the biggest of the big, but now the demand to keep shareholders happy outstrips the need to keep the idea pipeline stocked. Today's corporate research is backed by huge piles of money, just as it used to be, simply because you're investing in something that is very capital intensive and doesn't involve a guaranteed payout. Anyone who's taken Corporate Finance 101 knows about the cost-benefit analysis and "which project should we fund given 20 altenatives" exercises the MBAs go through. Add angry shareholders to the mix, most of whom don't care about the company's longevity, and it's no wonder research doesn't get the funds it used to.

    One advantage that corporate labs have over university or government labs is their science/engineering focus. It may be basic research, but the reality is that it's mostly in the company's field and ties in neatly with the current or future product lines. I'll use Bell Labs as an example...AT&T used their telephone monopoly, which generated vast sums of money, to fund basic research. That led them to invent the transistor, which (surprise, surprise) was very useful in early telephone switching equipment, and in modern electronics in general. Digital switching dropped the cost of providing phone service, and enabled new technologies that just couldn't exist in the old analog-switched network. Other inventions such as the UNIX operating system and others had wide-ranging implications for technology in general, but at their core they were used to improve the company's products and services.

    I think that corporate research is probably going to end up relegated to privately-held firms who make boatloads of predictable income every year, and can afford to fund it. The current stock market just doesn't allow for this to go on...wild gyrations every single day, plus the fact that people and institutions trade in and out of stocks every second, not every 10 years like they used to. That's the thing that's different -- money is still available, but no one wants to plow it into something that doesn't give an immediate payout.

    • An idea I've had for a long time is that corporate executives shouldn't be paid based on the quarterly stock price, as is so often the case, but the stock price five years from now.

      One way to do that would be to still pay them with options, but they would be contractually forbidden to sell the stock until five years after each vesting.

      If they had exercised their options in the meantime, they would still get dividends. That's the way it should be - companies should drive investment by actually earning profi

    • The first transistor was invented about 1925 by Lilienfeld. Ironically, it was a field effect transistor, the type that gets most use in digital devices today. Point contact transistors were developed at Bell Labs in the 1940s, and bipolar transistors at Bell Labs in 1950.
  • You don't have to monetize everything, you know. It is possible to use one unprofitable department to improve revenues of others. Have a spine and stop worrying about next quarter more than next year.
  • Hi all, This is a great comment thread -- really! A few clarifications:

    PARC was not sold off but is an independent subsidiary (incorporated in 2002). This means we work with multiple other clients -- from Fortune 500 companies (including Xerox) to startups to government agencies -- practicing an open innovation model where we provide custom R&D services, technology, expertise, IP, and more.

    Our clients commercialize our technology for their market

  • I was involved in a project to make PARC products -- the Alto, Ethernet, and laser printer -- into a commercial product in the mid-to-late 70's, at Xerox in El Segundo. The hardware was amazing; I remember the thrill when they wheeled my Alto into my office, pushed aside a ceiling tile, and connected it to a big black cable called the Ethernet. It was quite obviously a minicomputer, not a microprocessor-based personal computer, similar to Digital's PDP-8 and the DG Nova-2 (as Animats said above). I'd used

  • by lurgyman (587233)
    That's RFID tags and RFID-enabled sensors, not readers.

/earth: file system full.

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