The Graphic User Interface Revolution and Innovation

I would like to come back to one of the most extraordinary innovation that happened in the Silicon Valley and revolutionized the computer industry: the story of Apple and Xerox, or how publishing needs paved the way for the graphic user interface revolution.

Everything started in PARC (Palo Alto Research Center) in the late seventies. PARC was founded in 1970 as a division of Xerox. The main research field of PARC was electronic document and PARC developed notably the laser printer, Ethernet, the Graphical User Interface (GUI) and Interpress, a graphical page description language.

PARC researchers indeed developed a station called “Xerox Alto” in 1973. The Xerox Alto was the first computer to include a graphical user interface (GUI), a mouse and a Ethernet connection. Thanks to the GUI, Xerox Alto was able to display a desktop metaphor including documents and folders. Xerox Alto has never been commercialized, but it has been produced at 2000 units over the next 10 years and was mainly used by PARC and universities.

In the same years, after the success of the Apple II, Steve Jobs was working on a new project called Lisa (his daughter’s first name born in 1978). In December 1979, Steve Jobs and Apple Engineers were granted the permission to visit PARC in exchange of Apple pre-IPO stocks. During the visit, Steve Jobs saw the Xerox Alto and was impressed by the GUI and the mouse capabilities, and decided to implement these functionalities in the Lisa project and after in the Macintosh project. There still exist controversies on how much the Macintosh has been influenced by the Xerox Alto, but undoubtedly the PARC visit gave at least the idea to develop a graphical user interface for Apple’s future projects. It also has to be noted that some engineers working on the Xerox Alto projects moved to Apple to work on the Lisa and Macintosh projects.

Lisa was first introduced in the market on January 1983, but was not a commercial success and was discontinued in 1986. It is said the reason of this failure was the price. Also, the system was too slow because it included lots of advanced features, that were implemented only years after in the Macintosh. And at the same time, the IBM PC just started to hit the market. On the contrary, the release of the Macintosh in January 1984 benefited from a greater ad campaign (“1984” by Ridley Scott during the Superbowl) and a better price positioning. Macintosh sales were not as strong as expected at the beginning and it was the partnership with Aldus Pagemaker and Adobe PostScript that really made the product take off and become the first GUI-based computer to be a commercial success.

PostScript is a page description language, derived from Xerox Interpress. As Interpress was not commercialized immediately after its development, its creators, Chuck Geschke and John Warnock, left Xerox in 1982 to create Adobe where they developed the PostScript language. In 1984, while the Macintosh encountered commercial difficulties, Steve Jobs urged Chuck Geschke and John Warnock to implement PostScript in the Apple LaserWriter. The LaserWriter was a Canon OEM printer and was the first printer to include a PostScript interpreter. It was released in March 1985, and millions of units were sold. The LaserWriter is said to have allowed Apple to survive and the Macintosh to become a commercial success. The third piece of the solution is PageMaker, released in July 1985, a PostScript-based software. With the association between Apple, Adobe and Aldus, Desktop Publishing was born. Afterwards, Adobe released two other PostScript applications: Illustrator in 1987, and PhotoShop in 1990, to complete the suite of graphic design software (Aldus eventually merged with Adobe in 1994).

Meanwhile, Xerox Star, derived from Xerox Alto was released in 1981. It included a GUI, Ethernet and InterPress. Even though the product was very similar to the Apple solution, it was a commercial failure. Many suggested that the failure was mainly due to the price of the solution, which had no comparison with the Apple solution. Also, the Xerox sales force received better commissions when selling a photocopier than Xerox Star and therefore they only had a small interest in selling the solution. In my opinion, Xerox was in the B to B market (dictating the distribution structure) while Apple was in the consumer business. The Apple solution, quickly spread in the consumer segment, became the de facto standard, i.e. every freelance designer was able to afford a Macintosh and print their creations on professional postscript devices.

May be, Xerox lacked of strategic vision and missed a huge opportunity, but I am persuaded that many other big companies are in the same situation. Apple itself lacked of innovation after Steve Jobs left the company in 1985. Between 1985 and 1997, the company did not really innovate and exploited the desktop publishing application idea to the end while its market share in the consumer segment shrank little by little to the benefit of the PC. It is only when Steve Jobs came back in 1997 that the company regained profitability thanks to continuous innovation (imac, ipod, iphone). This story really illustrates that business success in only a matter of seizing opportunities. In the 80’s, Steve Jobs envisioned that typewriting and calculating will be the main applications of the personal computer, leading the way to desktop publishing and electronic spreadsheets. In the late 90’s, it was all about video and music. Apple brought to an end its focus on desktop publishing and developed a consistent solution for the consumer market segment with the ipod and the imac. Today, it is mobility and web 2.0 and the iphone is the right answer.

What really strikes me, it is the ability of Apple (i.e. Steve Jobs) to find new markets and new opportunities that were previously not in the company’s core business. On the contrary, big companies hardly manage to innovate or to change strategic directions, as they are always stuck with internal problems and their existing business model. The best way for them to innovate could be through company acquisition, but it requires to make the right strategic decisions, which involve leadership. Leadership is key when it is about innovation as it requires vision and strategic decision. Unfortunately, lack of leadership in companies is not so uncommon, and many companies fail because their leaders only see short-term opportunities, i.e. they only care about next quarter’s sales forecasts. The dilemma between investing and harvesting has always existed in companies, but in my opinion companies are more and more preoccupied by sales, especially in the recent years. I personally find shocking the compensation levels of some sales people compared to the ones who actually invest and prepare company’s future (I mean R&D people). With the financial crisis, I hope the trend will invert and companies will come back to reasonable compensation schemes which put more emphasis on innovation and investment.

Coming back to Apple, Steve Jobs has made the right strategic choices for the last twelve years and today only few people remember that desktop publishing actually made Apple’s initial success, as Apple is now so well established in consumer electronics…