it's not so much "not knowing", it's not being interested in taking over the computer industry and not wanting to understand it. They wanted a machine they could sell through their copier sales channel, period.
The part where Don Massaro says, "The desktop is OUR market. The 820 is just to hold our place on it until the Star is ready" (and yes, he really did say that) betrays a stunning blindness to what was going on:
"People are bringing their Apple II's to work so they can use VisiCalc? Well, we'll put an end to that stupidity!"
I think, it's complicated. As I see it, Xerox tried to follow through on the paperless office vision, but it was either too early from a technological/price/scale perspective, and/or the organizational challenges and requirements for any adopters of such a complex system were too great and it was too early for these to be tackled in all seriousness (even Steve Jobs got just half the message), and/or it was already too late, as alternatives that required much less adjustments and promised better scalability (in adoption/deployment as well as in production) were already on the market, and these had also far less development costs to cope with. From this perspective, the Star was doomed from the beginning, nevertheless it was still an important and remarkable project. — Maybe, Xerox could have tried more intensely, maybe they could have been more interested, but I'm not sure, if it would have made much of a difference. (However, people like Larry Tesler switching to Apple, illustrates that there may have been also a systemic problem. In contrast to you, I wasn't there, and I haven't witnessed the frustration.)
Having said that, I'm definitely ordering your book (probably today)! :-)
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Edit:
Regarding the appearance of the IBM's PC in the article, "IBM ignoring the personal computer revolution" is much a popular myth, as is the IBM PC coming out of nowhere. In actuality, IBM had several projects over the 1970s, like Yellow Bird, Aquarius (both home computers, also under the lead of Bill Lowe), the latter, which would have included an app-store-like ecosystem of software on bubble memory cards, evolved to fully functional production prototypes, but was canceled last-minute in the meeting where it should have been finally approved over concerns regarding the reliability of bubble memory. Various other PC prototypes were designed at Eliot Noyes Associates. None of these internal projects succeeded. By this, the frustration had apparently grown to the extent that there had been deliberations of acquiring Atari's computer devision instead (at least, there were design prototypes for this.) Project Chess (IBM 1550) was just the final step in this process, which must have come with its own frustrations.
Thanks for the kind offer! But this would be Europe/Austria — I guess, I'd rather spare ourselves the postage. (Let's see…) :-)
PS: Lowe is quoted in "Delete." with, "The Aquarius would have blown the socks off of everybody. I felt, and a lot of people felt this was going to be a big deal and make IBM believe in this whole business." Now imagine that frustration… They had invented, designed and developed iPhone-like home computing in 1977, and they believed in it and in its transformative potential, and then they came out of the meeting that should have approved it all with the project canceled.
(I understand that IBM didn't want to risk the reputation of their core business by deploying a potentially unreliable technology for what must have still been an experiment to them. [Well, that changed with the Jr. ;-)] But, I think, this also illustrates that personal/home computing ultimately had to come out of startups and not from industry leaders. As you rightly observed, IBM eventually managed to square the circle by implementing a startup-like process and putting their weight behind it. But they probably learned it the hard way.)
As far as "knowing what they had" -- Jerry and I did write about that:
https://www.albertcory.io/lets-do-have-hindsight
it's not so much "not knowing", it's not being interested in taking over the computer industry and not wanting to understand it. They wanted a machine they could sell through their copier sales channel, period.
The part where Don Massaro says, "The desktop is OUR market. The 820 is just to hold our place on it until the Star is ready" (and yes, he really did say that) betrays a stunning blindness to what was going on:
"People are bringing their Apple II's to work so they can use VisiCalc? Well, we'll put an end to that stupidity!"