Cassidy: PARC still in the business of innovation 10 years after Xerox spinoff

Early last year, Stephen Hoover stepped into the role of running the institution that as much as any other is responsible for the personal computer and Internet revolutions.

He had one key goal: Don’t screw it up.

After all, PARC, the research lab on the hill in Palo Alto, is a part of Silicon Valley’s legend and lore. It is the place Steve Jobs visited before the launch of the Mac. He came away determined to reproduce the look and feel of PARC’s Alto, the revolutionary desktop computer, with its mouse for navigation and on-screen folders for organizing digital content.

It’s the place that is packed with big-brained scientists who over the decades developed dozens of obscure sounding technologies that make our modern computing possible; a place that, on average, files a patent nearly every other day. There’s the Ethernet for computer networking; WYSIWYG (what you see is what you get), which allows us to see how our documents will look while they’re still on our computer screens; the laser printer; and ubiquitous computing, the idea of essentially being surrounded by computers in various forms that we’ll use throughout the day (think networked tablets and smartphones for starters).

“This is one of the coolest places in the world if you’re a geek,” Hoover says. And he wants to keep it that way. But that can’t be his only concern. PARC, once known as Xerox PARC, was spun out as a subsidiary of Xerox in 2002. For the past decade it’s been responsible for its own bottom line, and it’s been expected to turn a profit. It was a change from the days that PARC served one master: Xerox. Now, Hoover says, less than half the lab’s work is for Xerox; the rest involves projects for other companies and government agencies.

PARC’s independence means that its 180 scientists and technologists can’t simply come up with ideas that are world-shattering, mind-bending and brilliant. A good portion of them have to be things that PARC and companies working with PARC can sell — and in the near-term. Profit vs. blue-sky research: It’s one of the oldest balancing acts among the research lab crowd.

“It brings a different focus to the research,” Hoover says of PARC’s business-centric focus. “You’re always thinking, ‘If I solve this, why would that make a difference in somebody’s life?'”

Scott Elrod, PARC’s director of hardware systems, has been at the lab for most of the past 27 years. He says commercializing technology has always been a guiding principle at PARC, but that the spinoff has meant that PARC had to become more focused, much earlier, on certain questions regarding research initiatives. “What is the market? What is the market size; the value chain? How likely are we to get to market?”

While pushing the outer limits of technology in the hopes of creating some unanticipated or even unimagined breakthrough is still part of the game, it’s become a smaller part of the game at research labs everywhere.

Hoover, who was vice president of software and electronics development at Xerox before arriving at PARC, is perfectly comfortable with the organization’s profit pressures. PARC makes its money by licensing its technology and by working on projects with companies from startups to Fortune 500 firms. PARC provides brain power and a technology portfolio that is combined with the brain power and technology of a partner company. In return the lab receives royalties or equity in the company.

Working with companies that have a business plan and a vision for profits is sometimes an advantage Hoover says. Sometimes a technology needs a business plan behind it if it’s ever going to be widely adopted.

“A lot of new technologies require new business models,” he says. “And if you don’t figure out the business model, you’ll never get your technology used.”

All that said, Hoover is determined to make sure that PARC researchers keep reaching for the next big thing that nobody has thought of yet. Yes, the lab has identified core areas that guide its research, including health and wellness, big data, cleantech, printed electronics, networking and innovation services. But, Hoover says, as much as 25 percent of its research investments are spent on projects outside the core areas, allowing scientists to stumble onto unforeseen breakthroughs. And he’s encouraged fresh thinking through initiatives such as creating a $1 million fund to pay for research projects proposed, vetted and approved by employees within PARC.

Employees came up with 36 ideas. “Some of those, I wouldn’t have done,” Hoover says. Which is exactly the point — coming up with ideas that the formal system would not have produced. Employees voted to fund a handful of the projects.

And while Hoover didn’t want to provide too many particulars about what researchers are working on, keep an eye out for a product that combines mobile computing, social networking and data analytics in a way that encourages healthy behavior and, yes, makes staying healthy fun.

In short, watch for the sort of change-making innovation that PARC still wants to be known for.

Contact Mike Cassidy at mcassidy@mercurynews.com or 408-920-5536. Follow him at Twitter.com/mikecassidy.