Even before Steve Jobs’s arrival on the scene PARC had been facing the prospect of wrenching change. The first sign that trouble lay ahead came in May 1978, just after that year’s annual corporate meeting in San Francisco. That Friday, when the Xerox contingent had already returned back East, George Pake got a phone call from Jack Goldman.
In terms of both men’s careers, it was almost as momentous a call as the one eight years earlier when Goldman had offered Pake the chance to manage a unique new research center. But this was a different Jack Goldman. Pake’s old mentor, far from being at the top of his game with all the resources of a powerful industrial machine at his command, sounded frightened and querulous.
“George,” he said, “you gotta be here in Connecticut on Monday. I gotta talk to you. They’re taking the research labs away from me.”
As long as Jack Goldman had toiled under the protective shade of Peter McColough he tended to win a fair share of his battles with Xerox culture and bureaucracy, especially the early crucial skirmishes over the consolidation of all Xerox research in his own hands and the establishment of PARC. But as the lost decade of the 1970s wore on and Xerox sank deeper into its slough, Goldman’s distance from the chairman’s ear lengthened and his influence waned. Just as McColough had recruited Goldman from Ford to reanimate Xerox research, he had imported a group of outside finance experts to modernize the company’s ailing revenue and expense structures. More and more, they were in charge.
They proved to be a stultifying and self-perpetuating cadre. Company President Archie McCardell, whose passion for figures rivaled that of the ancient numerologists, came from Ford, whence he recruited Jim O’Neill, who had once been his superior, to head the Information Technology Group. Soon they were joined by three other Ford men, clustered in the highest stratum of Xerox management. By the start of 1978 Goldman was still a member of Xerox’s board of directors, but no longer reported directly to Peter McColough. Instead he was sequestered three rungs down in the organizational ladder and outnumbered by the newcomers.
He did not take well to the de facto demotion, nor to the alien management culture that McCardell and O’Neill had brought with them. As he witnessed the new men’s ineffectual struggle to stem Xerox’s decline from a vantage point hopelessly remote from the seat of power, he became more irascible. Jack Goldman’s aura was beginning to fade, one loyalist recalled, “accelerated by his indubitably abrasive manner in the presence of incompetence, which was abundant at the higher levels of Xerox.”
This was a somewhat unfair assessment of the new executives. Many were simply in the wrong place in the wrong company. Xerox needed to embrace radical new technologies to resuscitate its product lines. But they were trying to squeeze the last drops of blood from the same tired copiers by applying snazzy new management theories and pinching pennies. Had the crisis been rooted solely in Xerox’s complacency or a bad economy, their reorganizations and cost-cutting strategies might have borne fruit. But the affliction ran much deeper.
Perhaps the best illustration of the conflict between the new technologists and the financial engineers was the short, bitter career of Myron Tribus, who was hired on Goldman’s recommendation as senior vice president for research and engineering in 1972 and got driven out by O’Neill before the close of 1974. Crusty and temperamental, Tribus was a former Commerce Department official and dean of engineering at Dartmouth. He was also, as Goldman attested, “one of the most brilliant engineers in this country. A difficult guy to deal with, as is often the case when you’re dealing with geniuses, but an absolutely brilliant engineer.”
Tribus realized within a few weeks of his arrival in Rochester that Xerox executives did not define their business as making copiers, but rather as making money. The products generating the revenues were almost irrelevant; for them the issues of management would have been no different had they been turning out cars, or raw steel, or shoes. “They saw Xerox as a money pump and they organized it around that concept,” Tribus said. “The people at the top of Xerox were not really interested in technology.”
As a result, Xerox technology and engineering had turned distinctly slovenly. Customer complaints battered against the company walls like a storm surge, but no system existed to convert reports from the field into product improvements. Tribus imposed a rigorous order on this haphazard environment. He demanded that every part going into a Xerox copier, down to the smallest spring, be documented like a component in a jet engine so that repairmen and engineers needed only to flip open a book to locate the trouble spots. “I realized,” he said, “we had to get reliability.”
Almost alone among the top executives, Tribus was enchanted with PARC. He visited Palo Alto regularly and, back home, pressured O’Neill to market the laser printer as an alternative to the slow and noisy IBM machines whose hideous output then passed for high-tech computer printing. After Tribus’s secretary was awarded an Alto out of the corporate consignment he studied the change in her work habits with frank fascination. “When they took it away to check on its wear and tear she cried, really cried,” he said. “I thought to myself, ‘This is something really big.’”
Unfortunately, one skill Tribus had not learned during his long career in government and academia was how to survive in a corporate executive suite. He was constitutionally unable to coddle underlings or suffer fools gladly; nor was he alert to the necessity of protecting his flank. Even subordinates who admired his brains hated his brusque and doctrinaire manner. As for his peers in management, who resented the blunt delight with which he rubbed their noses in his superior technical judgment, they smelled his lack of corporate savvy like lions circling a lame wildebeest.
Eventually he ended up sandwiched in the pecking order between O’Neill and an engineering manager named Robert J. Sparacino. Sparacino had honed his corporate infighting skills at that war college of internal competition, General Motors, where an executive at Pontiac would win as much praise for outsmarting his compeers at Buick as for beating Chrysler. O’Neill at first assigned him to be Tribus’s subordinate, but over a period of months arranged to give the junior man more responsibilities at Tribus’s expense.
“They connived to get rid of me,” Tribus recalled. “I had never been in a corporation. I found myself in an alien land, and working at the top I saw a lot of things going on that I thought were just plain stupid: But the other guys had MBAs and I did not, and they talked a common language and I was clearly an outsider. I fought that system tooth and nail until some of my good friends came to me and said, ‘Myron, you look like hell, working from seven in the morning till seven at night surrounded by guys who just want to do you in. You’ve got to get out of there or you’ll be dead in a year.’”
Tribus’s resignation in 1974 to accept a teaching post at MIT deprived Goldman of a soulmate and an ally. He was left to fight the Ford finance clique as a minority of one. What he lacked in manpower he made up for in vituperation. The carping within the executive suite grew intolerable, While Goldman sniped at the very idea of having “the engineering division headed up by an accountant who just didn’t understand things like Moore’s Law or the role of software,” O’Neill and Sparacino nagged him about the half-baked and unmarketable prototypes coming out of PARC. Sparacino at one point was heard to remark that “office systems will never amount to diddly-squat at Xerox,” a prophecy many thought he worked to make self-fulfilling.
But Goldman did not always have realism on his side. Even his closest allies recognized that he had little conception of the economics of product development—the indispensable second half of “R&D.”
“Jack did not understand what you had to do with bright ideas from bright people to make them into real products that could go into a real market,” acknowledged George White, a member of his research management staff. And with O’Neill and Sparacino continuing to control all marketing and engineering, Goldman had less clout than ever to force research-driven products into the marketplace even as market probes. It was his old problem at Ford (“Not much of your stuff gets on a car, does it, Jack?”), exacerbated by vicious personal animosities. He could only watch powerlessly as his most cherished ventures—the laser printer sale to Lawrence Livermore, the marketing of the Alto III—became the victims of political spats.
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 think 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 computer labs (including SSL) and reducing the money spent on the General Science Lab.
“I figured if I had a zero-sum game”—that is, if PARC’s budget were to remain static overall—“I was going to have to cut back slowly in some areas,” he recalled. “It would not be sudden, but some people’s oxen were going to get gored more than others. I was going to change the status quo.”
Spinrad’s plan violated PARC and Xerox orthodoxy in at least one important respect. Xerox’s corporate culture always treated budget cuts as burdens to be shared equally by every cell of the organism. If a 10 percent cut was indicated, every division and branch office took a 10 percent cut whether it was a marginal contributor to the company or an indispensable cog in the machine. “I was probably the first one not to be egalitarian about cuts,” Spinrad recalled. “I had prejudices, and I thought one of the few roles management has is to make choices and judgments.”
But inside PARC many people found it hard to distinguish Spinrad’s prejudices from Bob Taylor’s. “Spinrad succumbed to Taylor’s unrelenting pressure,” was Harold Hall’s judgment. Pake agreed. “My perception was that Taylor, being in complete ascendancy in the political jockeying between the two labs, enlisted Spinrad.” That the reallocation plan took direct aim at the physicists in Pake’s pet laboratory—and Taylor’s bête noire—only reinforced that impression. Pake had spent ten years defending the General Science Lab from Taylor’s carping. He was not about to sit by and let it be gutted now.
Pake viewed the situation even more urgently because he harbored growing doubts about Spinrad’s overall performance. For several months he had been fielding complaints from within the research center about Taylor’s ambitions—complaints that would never have reached him if Spinrad had kept Taylor on a properly short leash. Moreover, he believed Spinrad had deliberately dragged his feet in recruiting a director for the new integrated circuits lab, which consequently had not yet gotten off the ground.
On March 21 Pake summoned Hall to his office and, clearly anguished, outlined his concerns along with what he called a “really zany solution.”
“Maybe I can split the center in two parts,” he told Hall. “That might solve the problem.”
Specifically, he would divide PARC into two independent research centers, manifestly configured to keep Taylor isolated. One, the “Science Center,” would comprise SSL, GSL, and the new IC lab and be headed by Hall. Spinrad would retain jurisdiction over the “System Center,” which was limited to CSL and the Optical Science Lab.
Hall assented to return to line management. Within hours after Pake first broached it, the change was official. “I suppose if I had been a scientist when this was happening I wouldn’t have known what was going on,” Pake acknowledged later, “because all of a sudden everyone gets this memo through the internal mail saying PARC is now two PARCs.”
In truth, everyone at PARC regarded the arrangement of two research centers sharing the same building—and in some cases the same floor—as unsustainable over the long term. But Pake could see no other solution to the dual problems of Taylor’s imperialism and the stalled progress on the IC lab. Spinrad, philosophical as ever, accepted the rebuff complaisantly. But he was clearly chastened, and within a year accepted a reassignment back to the corporate staff.
Meanwhile Hall assumed responsibility for recruiting a chief for the integrated circuits lab. After several months he was convinced he finally had his man: a physicist from the University of Kansas named William J. Spencer.
The physically imposing Spencer’s academic credentials were less than sterling—before taking his Ph.D. from Kansas he had gotten his bachelor’s degree in physical education—but at the age of fifty-six his professional career was distinguished by management posts at Bell Labs and the Sandia and Lawrence Livermore national laboratories. Although Spencer had been Hall’s third choice for the job (the two other candidates had turned him down), he felt better about his find as time went on. Heading the IC lab, he thought, would only be the start of things for Bill Spencer. As he reported to Pake, “When he’s ready for the big job I’ll let you know, but I can’t help thinking that I’ve hired not only my successor, but yours.”
Meanwhile, the pressure of the outside world was being felt more and more inside PARC. “The only problem with PARC was a law of physics,” Charles Simonyi observed. “A star that bright eventually has to blow up.”
Simonyi began to sense the impending supernova in 1980. One day that fall he found himself wandering the hallways of Xerox headquarters in Stamford, having his lowest expectations confirmed. The disparity between the opulence of his surroundings and the paltriness of the brainpower housed therein beggared the imagination. He felt wholly irrelevant, like a wayward tourist rather than an employee being interviewed for a corporate staff position.
Simonyi had been inveigled into making this trip by Jerry Elkind, who sensed that the Advanced Systems Division was losing its charm for his young subordinate. He was right. The excitement Simonyi had savored in getting Altos out to the world had worn thin. With BravoX nearing completion he was unsure of his next step, especially given the absence of any sign that Xerox meant to follow up ASD’s market probes with a full-scale merchandising program.
He had only grown more restive when a friend showed him an Apple II running VisiCalc. The spreadsheet program was new to him but dazzling in its power. One typed numbers or formulas into the cells of a grid and linked them, so the answer from one cell could be part of the formula of another. This allowed anyone to tabulate data in an infinite number of permutations. It was particularly valuable for businessmen and engineers, who could perform “what-if” analyses simply by altering a figure here or there and letting the grid automatically calculate the myriad ramifications of the change. Sure enough, within months VisiCalc had transformed the Apple II into a commercial sensation.
By contrast, at PARC, where funds had flowed so limitlessly that no one ever felt the urge to run “what-if” budget scenarios, the spreadsheet idea had not even occurred to the greatest software engineers in the world. What Simonyi found even more depressing was that VisiCalc was simple, intuitive, and fast—all the qualities he and his colleagues had strived for in their work over the past decade.
“That alarmed me a lot, how good it was,” he remembered. “They were using even fewer cycles than the Alto to run it on the Apple II, way fewer.”
Like Larry Tesler, Simonyi had discovered the power of low-end computing. Until the day he saw VisiCalc on the Apple II he too had dismissed the hobbyist machines as a joke, as absurd in their triviality as the Star was in its bloat. Now he recognized in them a future that PARC had missed.
As a guide to the new world Simonyi turned to his former SDD boss, Bob Metcalfe, who was heading his own startup, an Ethernet equipment maker named 3Com Corporation headquartered in Santa Clara, a few miles south of Palo Alto.
Metcalfe rather relished the role of trailblazer for his old PARC and SDD colleagues (“I was the one who had gone out into the world and didn’t die,” he observed). He invited Simonyi to lunch, and over appetizers handed him a list of ten young entrepreneurs who he thought had a chance of propelling the computer industry toward its exciting future and who might make good use of Simonyi’s talents. The first name on the list was someone Metcalfe described as “a crazy guy,” which in Simonyi’s eyes bathed him with a perverse appeal. His name was Bill Gates. Simonyi would never meet any of the others.
A few weeks following that lunch, Simonyi happened to be overseeing the installation of an Alto at the Seattle headquarters of Boeing, one of the VIP customers granted a shipment of ASD machines. On his last afternoon in town he dropped in on Gates’s little company. Microsoft’s thirty or so employees occupied half of the eighth floor of the Old National Bank building in Bellevue, just across Lake Washington from the city of Seattle.
Carrying a portfolio of his work, Simonyi entered Suite 819 relaxed and confident, thanks to his mistaken impression that Metcalfe had already called to smooth the way. In fact, he was an unexpected visitor. Bill Gates being tied up at the moment with a delegation from a Japanese manufacturing company, Simonyi was escorted instead into the office of Steve Ballmer, a friend of Gates’s from Harvard. Unlike Gates, Ballmer had stayed at Harvard to graduate, after which he signed on to be Microsoft’s maniacal chief salesman and hyper-motivational troop leader.
“I projected supreme confidence and everything,” Simonyi recalled. “I had a great portfolio and so Ballmer was incredibly impressed.” This was an understatement. After a few minutes Ballmer bounced out of his chair, exclaiming, “Bill has to see this!” He dragged Gates out of his meeting and badgered him into thumbing through the portfolio until it was time for Simonyi to catch his flight home. Gates offered him a ride back to the airport.
“We were going in the car and walking up to the gate together,” Simonyi said, “and then and there pretty much decided our whole futures. It was amazing. Bill was like twenty-two, looking seventeen. I was thirty-two. The bandwidth we had and the energy just flowing from him was incredible. In a five-minute conversation we could see twenty years into the future.”
First, however, he had to resolve the issue of the corporate job in Stamford. Simonyi agreed to make the exploratory trip back East more as a courtesy to Elkind than any other reason. His one visit to Bellevue had already told him that there was infinitely more opportunity outside Xerox than in some “technology staff puke job” in Stamford, Connecticut. “I wasn’t unhappy to go. I thought it would be a nice trip. Though I knew there wasn’t a chance in hell.”
Had he been wavering, his interviews with the staff planning executives would have decided the issue. “Here’s Stamford, they had a wing of the building just for these six executives and they’re sitting like a Politburo behind two layers of secretaries in their chairs. You could see the bandwidth was minuscule. I was talking to my prospective employer and the guy didn’t know what the hell he was talking about and he didn’t even know that he didn’t know. He knew he wanted some advice on technology and he pretty much knew what he wanted to hear and his questions didn’t make sense. It’s not that I didn’t have the answers, it’s that he didn’t know enough to ask the right questions.”
The contrast with Microsoft was sobering. “We are talking about a sunset industry and a sunrise industry. It was like going into the graveyard or retirement home before going into the maternity ward. I could smell it and feel it. You could see that Microsoft could do things one hundred times faster, literally, I’m not kidding. Six years from that point we overtook Xerox in market valuation.”
Simonyi paid two more visits to Bellevue before the end of the year and brought Gates down to PARC once to show him the Alto. Since Gates had expressed an interest in Microsoft’s entering the applications business, Simonyi obliged him by charting out a strategy to exploit every market: word processors, spreadsheets, e-mail, even voice recognition—everything PARC had worked on and several things it had not. Helpfully he prepared the document on BravoX and printed it on the SLOT. Form followed function: Gates could read the program and simultaneously absorb its tremendous graphic potential, laid out in a dizzying variety of typefaces and formats. As Simonyi said later, this was his way of becoming “the messenger RNA of the PARC virus.”
On Christmas Eve Gates sent Simonyi a job offer by Federal Express. By February he was in place as Microsoft’s director of advanced product development. Shortly thereafter Gates asked him, “Have you seen the Chess machine?”
Simonyi waved him off. “Bill, I’m really disappointed. I want to be in serious business. These chess computers are just a vogue. There’s no money in them. We should be doing applications, serious stuff.”
Gates shook his head. “Charles, you don’t understand.” He led Simonyi down a hallway toward a small enclosure and opened the door on two engineers working on a machine that in a few short months would alter the office computing market forever and show Xerox the path it had missed.
“Here it is,” Gates said. “IBM is making a personal computer. Its code name is Chess.”