Xerox PARC

Xerox PARC is a research center in Palo Alto, a city south of San Francisco. It was founded in 1970 by Xerox, a large American manufacturer of copying machines. At the time, the company earned a great deal of money and wanted to find out what office work would look like in twenty years. To that end, it hired some of the country’s best computer researchers and gave them unusually great freedom. The result was a series of inventions that still shape every computer and every smartphone today. The name PARC stands for Palo Alto Research Center.

The place where the modern computer was invented

Before PARC, people operated computers via typed command lines. You had to know the commands by heart, otherwise nothing happened. In Palo Alto, the idea arose to make the screen look like a desk instead. Documents became rectangles, programs became small pictures, and you could click on them with a pointer. This user interface is called a graphical user interface.

PARC also developed the laser printer and Ethernet, the technology used to connect computers within a building via cable. Object-oriented programming was also strongly advanced here. This is a way of writing software in which programs consist of many small, self-contained building blocks. Almost every programming language today works according to this principle.

For Xerox itself, the center was an expensive undertaking. The company sold hardly any products based on these inventions. Other companies picked up the ideas and earned billions from them. PARC is therefore considered a textbook example of the fact that good research alone does not yet mean economic success.

How research was conducted in Palo Alto

The recipe for success was organizational, not technical. Xerox gave the researchers a large budget and hardly any requirements. There were no quarterly targets and no obligation to deliver a market-ready product. Instead, the groups built working test devices, so-called prototypes, and used them in their own daily work.

The best-known of these devices was called Alto and was created in 1973. The Alto had a portrait-oriented screen, a mouse, and a network connection. It was never intended for sale, but around a thousand units were built and used in the offices. Because the researchers used their own inventions every day, weaknesses were immediately noticed. This method is often called “eating your own dog food” today.

The mix of people was also important. The teams included engineers, mathematicians, and psychologists working side by side. The question was not only what was technically feasible, but what people could actually operate. This exact combination was missing from most computer companies of that era.

Why the name keeps coming up in AI discussions

In 1979, Steve Jobs visited the center with a group from Apple. What he saw there fed into the Apple Lisa and later into the Macintosh. Microsoft developed a similar concept with Windows. Anyone who moves a window or clicks on an icon today is using an idea from Palo Alto.

In business news, PARC usually serves as a benchmark for comparison. When Google, OpenAI, or Nvidia build expensive research labs, it is often said that they want to create “their own PARC.” What is meant is a place where cleverly chosen experts are allowed to work without short-term pressure to succeed. At the same time, there is an implicit warning that inventions without commercialization will fall to the competition.

A common misconception is that PARC was shut down. The center continues to exist, since 2002 as an independent company and since 2023 under the umbrella of the research institute SRI International. However, its heyday lies in the 1970s.