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4/30/2008
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Xerox Shows Off Future Tech And Tries To Better Define Itself

Despite failed attempts to cash in, the company and its PARC subsidiary have several pillars of growth in mind to compete with Amazon, Google, Microsoft, and Salesforce.com.

At the Palo Alto Research Center, the past is present: Horses graze amid tall grass on Coyote Road, as if to remind visitors of Silicon Valley before the silicon age, of the Old West and the pioneer spirit that's still evident in many of California's current innovators.

The past is present at PARC -- formerly Xerox PARC, but spun off as a wholly owned subsidiary of Xerox in 2002 -- quite literally: The lab is littered with reminders of innovations created by its researches. These include the laser printer, Ethernet networking, and the graphic user interface for computers.

Yet this past is something of an albatross that hangs about the necks of both Xerox and PARC. This was apparent on Tuesday at "Inside Innovation at Xerox," a media event held on Tuesday at PARC to showcase technologies that may soon emerge from the lab, such as self-erasing, reusable paper; a technique for rare cell detection; and more environmentally friendly plastics.

During a discussion with Xerox CTO Sophie Vandebroek, Forrester Research VP Laura Ramos observed that Xerox was well-known as an inventor but that other companies seemed to commercialize its technology. (Like the publishing companies that passed on the original Harry Potter manuscript, everyone at Xerox is probably tired of being reminded how Apple and others took its ideas to market.)

Xerox, as a company with $17 billion in revenue in 2007, hardly has to apologize for itself, but after years of lackluster stock performance, there's a sense that the company needs to clarify its positioning, particularly as Amazon, Google, Microsoft, and Salesforce.com, among others, redefine software as a service and IT infrastructure as a platform.

Ramos and other Forrester analysts at the event pressed Vandebroek to clarify Xerox's vision and identity. "They do have something to demonstrate to the market," said Ramos in a phone interview. "What does this innovation mean in terms of building shareholder value at Xerox?"

Vandebroek presented three pillars of growth for the company: driving the color printing revolution, creating a new business around offset printing through mass customization (ever wanted to print your own pop-up book?), and offering services to simplify document-intensive processes.

Two such Xerox services are Xerox Litigation Services (XLS) and Xerox Mortgage Services, which help law firms and mortgage industry companies bring offline information online and manage information that's already in electronic form.

These services are without a doubt innovative -- XLS for example features a conceptual search technology that will "actually help you decide what to search for," as Chris O'Brien, COO of XLS, put it -- but they also are the result of acquisitions. XLS grew out of the 2006 acquisition of Amici, and Xerox Mortgage Services emerged from the 2007 acquisition of Advectis. Thus, these two services, while they may drive revenue for Xerox, aren't the best examples of what innovation means at Xerox.

Innovation isn't only a matter of corporate profits. It's valuable to society at large because advances in one field often lead to unexpected advances in another. So it is that Xerox's printing advances over the years may end up improving health care.

The Scripps-PARC Institute for Advanced Biomedical Sciences, a partnership between Scripts Research Institute and PARC formed in 2002, has combined laser printing technology with fiber optics to create a way to identify rare cells, such as cancer cells, in the bloodstream about 1,000 times faster than digital microscopy. The technique could lead to more effective cancer treatment. It could also help reduce miscarriages by providing a noninvasive substitute for amniocentesis, a diagnostic procedure employed during some pregnancies.

Such partnerships serve to underscore that PARC is an independent organization, one that is helping organizations other than Xerox innovate. That has some tangential value to Xerox, as PARC's owner: Good publicity may rub off. But PARC isn't just serving Xerox by inventing technologies for outside organizations. It's also investing technologies that could drive revenue at Xerox.

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