Bernstein’s Retirement Brings Changing of the Guard at PARC; Q&A with Incoming CEO Steve Hoover

The storied Palo Alto Research Center, birthplace of such fundamental information-technology advances as the personal computer, Ethernet, and the laser printer, has a new leader. The Xerox (NYSE: XRX) subsidiary announced today that Steve Hoover, formerly vice president of Xerox’s software and electronics development group, will take the place of current CEO Mark Bernstein, who is retiring effective February 1.

Hoover, pictured above right, will be only the second person to lead PARC since its transformation from Xerox’s flagship research laboratory into a contract R&D organization earlier this decade. Bernstein took the reins in 2001, and was one of the architects of a planned 2002 spinoff that would have made PARC into a fully independent company. That spinoff was never completed—Xerox couldn’t find a buyer—and today PARC remains a wholly owned subsidiary of the Norwalk, CT-based document management company.

But the 170-member lab does serve numerous outside customers, from big tech companies like Fujitsu, Motorola, NEC, and Samsung to government agencies such as the Department of Energy and the National Institutes of Health. In 2009, about 40 percent of PARC’s $60 million in revenues came from customers other than Xerox, and the organization also incubates its own spinoffs, such as Powerset, a semantic search company bought by Microsoft in 2008 for more than $100 million.

Bernstein’s retirement comes just a few months after the symbolic milestone of PARC’s 40th anniversary, celebrated in September at a half-day symposium on the PARC campus in pastoral west Palo Alto. Bernstein told Los Angeles Times writer Michael Hiltzik at the time that the lab has grown since 2002 by marrying engineering skill with business development expertise. “The left brain is now complemented by right-brain thinking about what our technology is really useful for,” Bernstein told Hiltzik.

A Carnegie Mellon-trained mechanical engineering PhD and a 17-year Xerox veteran, Hoover is no stranger to the product development mentality. As vice president of Xerox’s software and electronics development group since October 2009, he controlled a $175 million R&D effort aimed at improving technologies found in more than 30 Xerox products. Before that, he spent three years managing Xerox’s research center in Webster, NY, the oldest of the company’s global research centers and the seat of its pioneering work in electrophotography.

Hoover says there won’t be any big shakeups at PARC on his watch, at least not at first. Xerox benefits from the mix of internal and external R&D that goes on at the facility, and the company doesn’t want to mess with a winning formula, he says. “This idea that you can create a research center that does work for other clients, for other businesses as well as government, and also initiates startups, but where Xerox is the largest client—that is something that Xerox really likes,” he says.

In a brief phone conversation yesterday I asked Hoover to talk about his experiences at Xerox, and about the significance of the company’s decision to appoint an insider to lead the lab. Here’s an edited transcript of our conversation.

Xconomy: Tell me a bit about yourself and your history at Xerox.

Steve Hoover: I joined the research group in Rochester, New York [in 1994], and since that time have basically gone back and forth between research and engineering….I’ve done a lot of work on automated designs in computer engineering, and that evolved into what PARC calls “Smart Matter”—the idea of intelligent systems. I moved from that into … Next Page »

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Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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