Dealers of Lightning (23 page)

While
Kay
was taking these first
mind-blowing
excursions into Idea-
space, the caliber of graphics research
at
Utah was exploding.
Ivan
Sutherland had joined the faculty
to work
with his friend
Dave Evans
(they would eventually form a
partnership
to manufacture interactive
military simulators). Kay's fellow
grad student
John Warnock achieved a
graphics milestone by solving the
famous
"hidden-line problem," which
applied to how computers could draw
the outline
of a form when it is par­
tially
hidden behind another
—
the
sides of a
triangle hidden behind a
ball, for example
—
so all the visible sides
and
angles convincingly line up.
(Warnock
s
solution is a
tour de force
of such
compactness that his doc­toral thesis, in which it is described,
runs to
only 32 pages.)

Kay's
own 1969 thesis incorporated
these
ideas and others into what
must be one of the oddest dissertations
ever
submitted for a doctorate in
a
scientific discipline, featuring as it did epigraphs from, among others,
W. H.
Auden,
J.
S. Bach, and Kahlil
Gibran
("You would touch with your
fingers the naked body of your dreams").
The
hand-drawn illustrations
included not only complex diagrams
of
functions and logical
trees
but
line
drawings of fanciful single-user machines. These had screen, key­board, and mouse unified into a desktop console, a big brother to the
portable all-purpose computer that had provoked such controversy when
he described it at the
ARPA
grad students' conference two years earlier.

Kay's
thesis outlined an interactive computer called the
FLEX
machine which he had designed in partnership with an unsung hardware
genius named Ed Cheadle, who was an important engineer for a Salt
Lake
aerospace company. The
FLEX
incorporated many of the ideas
Kay
would develop in the coming years at
PARC,
including compactness,
object-oriented programming, and the use of a display screen.
But
it was
not quite the personal computer he envisioned, in part because it was not
powerful enough to perform all the functions required by his ideal and in
part because it utilized a complicated and stilted language which, as
Kay
recalled, "users found repellent to learn."

Despite its idiosyncrasies (or because of them), Kay’s thesis readily
passed the muster of a five-man committee that included Sutherland
and Evans. But he was tormented by a sense of things half-done. Parts
of his FLEX machine could be implemented on existing hardware, but
a truly suitable technology seemed to be tantalizingly just out of reach.
"The big whammy for me came during a conference tour of the Uni­versity of Illinois, where I saw a one-inch-square lump of glass and
neon gas in which individual spots would light up on command—it was
the first fiat-panel display. I spent the rest of the conference calculating
just when the silicon of the FLEX could be put on the back of the dis­play." The answer, according to Moore's Law, seemed to be at least ten
years off.

If contemporary machines were inadequate, Kay’s goals had not
changed. The quest was still for something simple enough for a child to
use yet powerful enough to slake the human thirst for creativity. Kay
imagined an invention called the "KiddiComp" or "Dynabook." To make
the abstraction tangible, he built himself a model box about nine inches
by twelve and a half inches deep, with a flat screen and keyboard drawn
on the top surface, and filled it with lead pellets as a way of divining its
optimum weight (about two pounds, he judged).

He was at loose ends, depressed over having failed to make his great
idea materialize in more than cardboard form. While holding a tempo­rary appointment at the Stanford artificial intelligence lab he under­went a year of gestalt therapy ("a very California thing to do"). He was
on the verge of accepting a post at Carnegie-Mellon when Bob Taylor
called him with the electrifying news that Lampson, Thacker, and sev­eral of their BCC colleagues were joining Xerox PARC
en masse.
Kay
reconsidered his plans. Butler Lampson was one of his intellectual
heroes. Through the ARPA grad student conferences he knew the oth­ers as first-class talents. If all these people were to converge at PARC
under Bob Taylor, there was no telling what they could accomplish—
even build his Dynabook.

One night he and Taylor stayed up nearly until dawn, batting around
the possibilities implicit in a conjuncture of Xerox's money, Kay's ideas,
and the engineering of Lampson and Thacker. A computer simple
enough to be worked by children! Small enough to be carried under
your arm! Powerful enough to drive a display in full color! There was
only one thing, Taylor informed him at some point. Kay would not be
assigned with the others to his lab, but to the competing Systems Sci­ence Lab under Bill Gunning.

Much has been made of Taylor's motives in keeping Kay out of his
own lab. Some believe Taylor wished to place a "ringer" in the rival
SSL—a "colonization," Kay said, "so two of the four labs at PARC
would have ex-ARPA people" to more effectively propagate his ideas
throughout the organization. It is just as likely that Taylors BCC coup
had filled CSL's allotted head count for the moment. Since he was
advising Gunning on recruitment anyway, there was nothing untoward
in offering him Alan Kay.

It is also certain that landing in Gunning's SSL was Kay's lucky break.
He tended to work as a loner—either by himself or as leader of a small
team. Could he have maintained his intellectual autonomy in CSL,
where the only group was Taylor's and the intellectual engine was But­ler Lampson? Working out of SSL allowed Kay to work as a full partic­ipant in CSL's program without ceding his independent spirit. He
could interact with CSL as a privileged equal, outside Taylor's direct
supervision and Lampson's intellectual domination.

As events unfolded, Kay and Taylor apart proved more powerful a
force than they would have been together. Where Taylor could be
vague and inarticulate in describing computing's future, Kay was never
less than crystal-clear. The day he came to PARC for his job interview,
Rick Jones invited him into his office and asked him a stock question.

"What do you think your greatest achievement will be at PARC?" he
asked.

"It'll be a personal computer," Kay replied.

"What's
that?"

Spying a flat portfolio on Jones's desk the size of a student’s note­book, Kay seized it and flipped
it
open. "This will be a flat-panel dis­play," he said, indicating the cover, which he held upright. "There'll be
a keyboard here on the bottom, and enough power to store your mail,
files, music, artwork, and books. All in a package about this size and
weighing a couple of pounds. That's what I'm talking about."

He walked out, leaving Jones scratching his head and saying to him­self, "Yeah,
right."

With Kay's arrival
the
computer research team at PARC achieved critical mass. They had the people and the leadership, a seemingly unlimited amount of money, and Xerox's liberal commission to pursue whatever course of inquiry they wished.

All they needed now to start work was a computer. Pake gave them a month or so to study the available alternatives before recommending a system to be used by the entire research center. But in making their choice they provoked the first great donnybrook of PARC's young exis­tenc
e.

Perhaps Taylor
and his hand-picked
team should
have
known by sheer intuition
that
when you
are
about to
spend a half-million
dollars of
your employers money,
you do not go spending it on
a competitors
product.
After all, Ford
employees do not drive Toyotas,
and the soda
machines at
Pepsi head
quarters do not get stocked with
Coke.

Or
perhaps, having almost all come
from
academia and government
service,
they were simply too green
at working
for an industrial
enter­
prise to understand why
Xerox's computer
company,
SDS,
would
take
amiss Taylor's proposal that
PARC purchase
as its main computer a
machine manufactured by its
commercial archenemy. Especially when
the choice seemed to them a no-brainer.

Yet that
is what happened.
As
Taylor
put it later,
"We upset the apple
cart and didn't realize how badly." Badly enough:
PARC's
opening blunder would not be forgotten at Xerox headquarters for many years.
*

The
Computer System Lab's inaugural task of selecting the main com­puting hardware for all the
PARC
labs seemed straightforward enough
from the standpoint of pure engineering. When the lab drew up the spec­ifications there was no need to hold a colloquium to weigh their options.
There was only one: The PDP-10, manufactured by Digital Equipment
Corporation.

Over the previous year the PDP-10 had taken the computing world by
storm. One of DECs series of commercially successful units that had
grown out of the artificial intelligence programs at MIT and Stanford, the
PDP-10 was exceptional: A relatively compact computer (though it still
took up a good-sized room) with time-sharing hardware that rapidly
replaced the aging SDS 940s in scores of college computer centers and
corporate back offices. The PDP-10 was so well designed that it is still
treated with a cliquish reverence by computer jocks today, more than a
decade after the last unit rolled off the factory line.

The PDP-10 was also becoming the computer of choice—a
de facto
standard—for research departments linked to the burgeoning ARPA­NET. It possessed the special virtue of having been specifically tailored to
run Lisp, a popular programming language in which ARPANET re­searchers turned out software by the ream. Moreover, its operating sys­tem, Tenex, had been developed on an ARPA contract with government
funds, and was thus available for anyone to use, free of charge.

By the mid-1970s, thanks to these features and others, computer sci­ence in the United States would cease to be a Babel of dozens of mutu­ally incompatible machines. Instead, the prototypical computer research
group would be a university department using PDP-10s equipped with
the Tenex operating system and linked to the ARPANET." Even as early
as 1971, it was hard to imagine a better description of CSL's self-image.
After all, Taylor was the ARPANET
'S
patriarch and they were almost all
ARPANET "brats," as they labeled themselves. To the Computer Sci­ence Lab it was almost an article of faith that PARC should be the
PDP-10 node
par excellence.

But the lab was about to discover that purchasing capital equipment
for a corporate facility could never be as straightforward a question of
engineering as it might be for a faculty department at, say, MIT. For

*In 1979, ARPANET officials reported that of 202 host computers connected to the
network, 104 were PDP-10s or their corporate relatives, PDP-11s.

when word got out that Bob Taylor
was
planning to install a DEC com­puter at PARC, the executives at SDS went off like Roman candles.
This was understandable. In 1971 SDS was fighting for its life, and
DEC was its principal foe.

Not long after completing its purchase of SDS Xerox had discerned
that all was not well at its new computer division. Max Palevsky, who had
personally pocketed some $100 million from the billion-dollar transac­tion, was happier spending his money on Democratic campaigns and
movie and magazine ventures ("I must be on every sucker list in town,"
he said cheerily) than burying himself in the day-to-day problems of his
old firm. Suspicion was rife that his real business talent resided in his
knowing how to get out while the getting was good; popular rumor even
had him confiding to aides about the SDS deal: "We sold them a dead
horse before it hit the ground." He denied the epigram, but acknowl­edged knowing that at the time
of
the sale SDS had entered a rocky
stretch of the business cycle.

As though to confirm everyone's worst suspicions, SDS profits peaked
in May 1969, at almost the very moment that ownership formally
changed hands. That calendar year SDS recorded about $12 million in
net income. The following year was its best ever in terms of sales
—
but
for every dollar it recorded in revenue, it lost two. The division never
again showed a profit. Over the following three years the losses would
add up to nearly $120 million.

No later than early 1970, Rigdon Currie recalled, "the handwriting was
on the wall." At that time Currie, as head of sales, was instructed to pre­pare a detailed presentation on SDS prospects for a management meet­ing to be chaired by the choleric ex-West Pointer Dan McGurk, a former
Palevsky lieutenant who had become the divisions president following
the sale.

Currie was a Georgia Tech-trained engineer whose southern courtli­ness masked a wicked sense of humor. He was determined to make sure
his presentation would not easily be forgotten. On the appointed day he
greeted the assembled executives while standing by a flip chart three feet
tall. From the outset it was clear the news was not good. The condition of
every one of the company's leading customers was dire, he said. Govern­ment agencies like NASA and the National Science Foundation were
sharply cutting their budgets. Time-sharing companies like Tymshare,
which ran its nationwide network on SDS 940s, were encountering sales
resistance at all levels. With the education, government, and aerospace
industries all slumping simultaneously, nearly every market SDS served
was on the rocks.

Moreover, thanks to the PDP-10, SDS no longer found itself on the
cutting edge of the time-sharing market, where it had been placed by the
work of Project Genie. Even long-term customers turned in their leases
on the SDS 940 once they got a look at the new DEC machine. That was
an ominous trend. The old SDS leases were a fiscal time bomb: They per­mitted the customers to return their machines prior to expiration for a
full pro-rata credit on the unexpired period. Unfortunately, SDS had long
since recorded the full-term lease payments as revenue. This meant that
as computers came back from failed or defecting clients SDS would have
to recalculate the profits it had already reported for earlier quarters and
quite possibly restate them—as losses.

"Now, taking all these factors together, where are we?" Currie asked
out loud. He turned over the top card on his flip chart. The next one
was blank except for two words in huge block letters: "DEEP SHIT."

"McGurk almost killed me," he remembered.

Adding to the predicament of shrinking markets was Peter
McColough's determination to push SDS into a new one: the business
data processing business ruled by IBM.

Although McColough has been roundly chastised for this strategy, it
may actually have originated with Max Palevsky. The SDS founder had
always weighed his company against IBM as a benchmark. To out­siders this resembled weighing a puppy against a horse; no matter how
big it grows, it can never play in the same league. Yet in the weeks fol­lowing the Xerox sale Palevsky had openly fantasized about placing
Xerox's capital base behind the engineering skills of SDS and marching
jointly into war against Big Blue. (Much later he hinted he was only
telling McColough what the Xerox CEO wanted to hear.)

To the rest of the industry the act of stepping into IBM's den seemed a
fool’s
errand. Big Blue did not always offer tire most
technologically
advanced products in the market and frequently charged the highest
prices, but the ruthlessness of its sales and marketing more than made up
for these shortcomings (and fomented an epic battle with federal
antitrust authorities). Companies that tried to dislodge IBM from its
perch generally got butchered in the attempt. That had been the fate
even of the industrial powerhouses General Electric and RCA, which
had given up after losing a combined $600 million in ten years of trying.

The only major competitors left in the market were five large computer
makers known familiarly as the "Bunch." The term was an acronym of
their names—Burroughs, (Sperry) Univac, NCR, Control Data, and
Honeywell—but it was also descriptive. The Bunch trailed IBM in a dis­tant cluster, like a field of thoroughbreds struggling to keep up with Sec­retariat. From 1960 through 1970 the five competitors lost a combined
$167 million while IBM racked up profits of more than $3.5
billion.

Into this valley of death Peter McColough now proposed to ride
SDS. The very notion all but proclaimed his ignorance of the com­puter industry in general and his own subsidiary in particular, for there
could scarcely exist a company less qualified to take on this particular
fight.

"We did not have the tools to do it," Robert Spinrad recalled.

Bob Spinrad was an experienced scientist and engineer, unassertive
but rigorously analytical. He was a gregarious gentleman of the old
school, with a round face marked by eyebrows as dark and emphatic as
exclamation points. Spinrad had joined SDS in 1968 to run its software
group after several years at Brookhaven National Laboratory, where
the computer of choice was an SDS machine. Now he found himself
swept unwillingly into McColough’s foolhardy crusade. Shortly after
the chief executive s decree, Spinrad met with a couple of Xerox offi­cials sent belatedly from Stamford to El Segundo to appraise the divi­sion's competitive ability in the new market.