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Xerox, the document Company, has a natural fondness for paper. In a time when the “paperless office” is agreed to have been a comically wrongheaded vision and when paper-and-ink metaphors persist even in cyber-space (e.g., Web “pages”), that’s probably good business. Xerox’s loyalty to paper as a medium, however, has contributed to some notorious strategic blunders.

The biggest may have been the hostility the company showed toward the ideas coming out of its own unruly Palo Alto Research Center (PARC) in the 1970s. Between 1971 and 1979, PARC scientists invented the first truly personal computer, the first windows-based graphical user interface, the first user-friendly word processing program, the first adjustable screen and printer fonts, the computer mouse, the laser printer, and the Ethernet networking protocol to tie local computers together. These technologies make up the backbone of the modern office, yet only the laser printer was commercialized by Xerox. Company executives, blinded by their own mindsets as copier salesmen, forfeited many of the best people and prototypes at PARC to the next-generation firms that shepherded in the era of personal computing, such as Apple, Microsoft, Adobe and 3Com.

Or at least that’s the popular version of the story. In his illuminating new book Dealers of Lightning, based on interviews with the players themselves, technology journalist Michael Hiltzik concludes that there was more to the dramatic disconnect between Xerox and Xerox PARC than simple shortsightedness. While the missed opportunities can be chalked up in part to Xerox’s preoccupation with expensive copying machines, economics and a philosophical gulf between the company’s East Coast executives and its West Coast longhairs had almost as much to do with it, Hiltzik shows.

One sign of this gulf was the researchers’ unawareness that by allowing themselves to be featured in an anti-corporate article in Rolling Stone in 1972, they were in effect thumbing their noses at corporate headquarters. At the time, the visionary young scientists at PARC were hard at work on the Alto, a small personal computer that would later inspire Apple founder Steve Jobs to build the Macintosh. The article, by Whole Earth Catalog founder Stewart Brand, romanticized the PARC researchers as “computer bums” whose philosophy was “soft, away from hugeness and centrality, toward the small and personal, toward putting maximum computer power in the hands of every individual who wants it.” In one of the book’s many entertaining anecdotes, he recounts how a horrified personnel manager, upon learning of the article, asked,”What the hell is Rolling Stone?” “It’s some druggie magazine,” a secretary answered.

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