Dealers of Lightning (73 page)

After Archie McCardell, O'Neill's chief sponsor, resigned the Xerox
presidency in 1977 to become chief executive of International Harvester,
Goldman apparently believed he might yet gain the upper hand over his
adversaries. Instead the conflict only became more disruptive. The back­door sniping was bad enough, but when Goldman and O'Neill were face
to face, as at executive conferences or board meetings, they treated each
other with such an excess of gritted-teeth deference that the tension in
the room was palpable. McColough and David Kearns, who had been
appointed McCardell's successor as president, "were kind of embar­rassed by the feuding, which went on even in public," George Pake
recalled. "The corporation got pretty impatient with that."

The 1978 annual shareholders meeting in San Francisco was another
glittering showcase for Goldman, who invited his fellow board mem­bers down to Palo Alto for a beguiling tour of his citadel on Coyote
Hill. But it was his last hurrah. On their first day back in Stamford he
received a summons from David Kearns. The new president informed
him that research needed to be yoked more closely to engineering and
manufacturing. Therefore, he said, he was reorganizing it from a
corporate-level function to a subdivision of engineering—that is,
under Jim O'Neill and Bob Sparacino. Kearns, to be fair, may not have
fully understood the historic message he was thereby sending: Since
the days of Chester Carlson and John Dessauer, research had never
been ranked so low in the organizational charts at Xerox.

Goldman's initial reaction was outrage. He viewed the new president as
a novice—"my junior on the board of directors," he fumed—floundering
in the murk of a corporate reorganization without understanding the
importance of technology or that top researchers were mobile assets who
could vote with their feet. He stormed directly into McColough s office
and threatened to resign on the spot. "I pounded on his desk," he
recalled, "and said, 'You can't do this shitty thing!'"

Summoning
all
his powers of appeasement, McColough managed to
get Goldman calmed down, but he did not rescind Kearns's order.
Regaining his composure and examining the situation pragmatically,
Goldman realized he was overmatched. The forces arrayed against him
extended well beyond David Kearns, and the battle was more than
merely personal. A political drama was unfolding at Xerox, with tech­nology and research the pawns.

He now had a new goal: to keep his beloved research labs—his
legacy
—
out of his enemies' clutches. "The independence of the research
organization is what enables you to attract the kind of people you attract,"
he explained later. "And certainly putting it under an O'Neill type of guy
would kill it from Day One." He understood that to stop this from hap­pening he would have to fall on his sword. When he called George Pake
in Palo Alto that Friday, it was to ask him to pick up the mantle of
research as it fell from his own hands—by stepping in as research chief.

Pake felt deeply for his boss. "If I'd have been Jack I'd have been totally
shocked that with no warning at all they would just yank the three
research centers away from me," he said later. (Goldman's jurisdiction
covered PARC, Webster, and a third lab outside of Toronto.) At Gold­man's urging he flew to Connecticut that weekend. "We had breakfast
together on Monday and he said, 'George, this is a play by the engineers
in Rochester to gain control of the digital technology at PARC.' He was
indicating that he had lost that round. And he told me the only way to
keep the first-rate science we had in research was for me to agree to take
the job of overseeing the three labs."

Pake detected a few flaws in the scheme. The job had not been offered
to him and he had no knowledge that it would be. Second, he could not
see himself functioning any more cozily under O'Neill and Sparacino
than Goldman had. Finally, he was concerned about his health. Back in
1974 he had accepted a one-year staff appointment at headquarters and
relocated to Stamford, leaving Hall behind as acting PARC director. The
stress of corporate politics had driven his fragile blood pressure sky high
and brought him to the verge of a stroke, forcing him to return home
before the full year was up. He was not sure he wanted Goldman's job
under any circumstances, and certainly not if it meant working in Stam­ford again.

Goldman bulled through all Pake's objections by invoking the threat to
Xerox research. He ushered him in to meet with Kearns, to whom Pake
dutifully delivered Goldman's dire message. "I told David, 'Jack feels and
I feel that the research scientists will just abandon this sinking ship if you
put O'Neill and Sparacino in charge of the labs. We worked so hard to
build this research enterprise that that would be a terrible tragedy.'" He
offered to take over as head of research—on condition he could do the
job from Palo Alto. "I'll just agree that whenever you want me here I'll
get on a plane and come," he said. ("Many hundred airplane trips later I
kind of regretted that," he remarked later.)

Kearns said he would think it over and let Pake know. Pake left Kearns's
office in the same frame of mind in which Bob Taylor had left his own in
1970, convinced the deal was dead. Instead, his offer evoked widespread
approval in Stamford, where Pake was viewed fondly as a high-caliber
scientist and a consummate gentleman. He defended his positions but
never turned them into personal crusades like Jack Goldman. Further­more, Pake had always been content with the opportunity to create good
science and technology at PARC. "He never had a focused ambition to
turn the world or Xerox on its ear like Jack did," George White observed.
"He didn't challenge these other experts' in their own fields, like mar­keting and finance. In short, he wasn't uppity."

Two weeks later Kearns called to welcome him back onto the corpo­rate staff.

Even though he was staying in Palo Alto, Pake's new responsibilities
ruled out any possibility he could remain PARC's director. Of the can­didates to replace him, one stood out. He was Bob Spinrad, the genial
New York-born electrical engineer who had risen from a post at Max
Palevsky’s Scientific Data Systems to a corporate staff job under Gold­man. He was now head of the Systems Development Division, which
was building the Star.

Spinrad seemed to have all the qualities Pake valued most in a research
manager. His scientific and research credentials had been earned at
Columbia, MIT, and Brookhaven National Laboratory, a government
nuclear research center. He was an old hand at navigating the shoals of
digital computing, having served as SDS's software chief and managed
the large-scale engineering team at SDD.

Best of all, Spinrad was popular on both coasts. He had served with
dozens of PARC and SDS people on corporate task forces (including
Odyssey, which put Xerox's computer business out of its misery), and frequently dealt face to face with Jim O'Neill. "Goldman used to send me to
talk to him when he couldn't because they were fighting," he recalled.

What no one could have predicted was that Spinrad's biggest prob­lem would not be Jim O'Neill, but George Pake.

About a year after his accession as director July 1, 1978, PARC's inter­nal battle over research resources took a turn for the worse. The catalyst,
ironically, was the corporation's consent to the most significant expansion
of the research center since its founding. This was the establishment of a
program in the new technology of silicon-based integrated circuits. Tak­ing the science of VLSI a few steps beyond the work Lynn Conway and
Doug Fairbairn were doing with Carver Mead, the new lab would actu­ally manufacture devices on an experimental fabrication line. This was
not a trivial commitment. It meant millions of dollars in capital expendi­tures and the recruitment of an entirely new professional staff. But it was
a particularly gratifying victory for Pake, for whom it meant that PARC
would be doing cutting-edge research in his own academic specialty,
solid-state physics.

The IC lab, however, was far from universally popular on Coyote Hill,
where it was viewed as a carpetbagging rival for money and head count.
CSL trotted out the same arguments used against the VLSI program—
that it was unnecessarily duplicative of work done by other companies
that were in the
business
of making integrated circuits.

"Xerox didn't have any strategic need for integrated circuits research,"

Butler Lampson argued. "You could buy it perfectly well: That was the
crux of the argument against it. There would be a very good chance that
spending all this money would not only lead to no substantial payoff but
would actually hurt you, because you would be attempting to do things
internally that were better to do externally, and you'd end up with worse
components. Meanwhile it seemed obvious to me that if we took that
money and spent it on hiring more computing researchers we'd get a lot
more mileage out of it."

The IC lab added a difficult new factor to Spinrad's struggle with the
eternal question of how best to balance the resources of PARC. Almost
from the start he found Taylor in his face, entreating his new boss as only
he knew how. Taylor recalled: "I was making sure Spinrad was briefed
and encouraged him to get briefed by others to decide how to allocate
PARC's resources. I'd say to him, 'Do you diink PARC's resources are
allocated to the best benefit of the corporation?' He'd say, 'No,' and I'd
say, 'I think you're right.'"

Spinrad did agree that computer science gave Xerox the best bang
for the buck at PARC. But he disagreed that CSL should receive the
lion's share of the budget at the expense of the Systems Science Lab,
for he was quite taken by some of programs Sutherland had under­taken as head of SSL. "Some of those projects were beginning to probe
the edges of important things about user interfaces and social sys­tems," Spinrad recalled. "Studies of the applications of the systems in
offices. The ethics and etiquette of e-mail. Some didn't work out and
some did, but I felt it was important. Taylor's lab was narrowly hard sci­ences and unambiguous results and measurable performance and
communications reliability, and it didn't get into what clearly was the
important area: How the hell are you going to use this stuff?"

Nevertheless, he did share Taylor's general opinion that the physics
labs had been overfunded. Perhaps failing to recognize that virtually
since the day of PARC's opening the physics lab had played the role in
Pake's mind of a political counterweight to Bob Taylor, Spinrad in
March 1980 took a step that forever marked him, unfairly or not, as
Taylor's cat's-paw. This was his preparation for Pake of a five-year plan
in which he proposed reallocating PARC's budget in favor of the com­
puter
labs (including SSL) and
reducing
the
money
spent on the
Gen­eral
Science Lab.