Story of

Xerox

Xerox was founded in 1906 in Rochester, New York, as The Haloid Photographic Company. It manufactured photographic paper and equipment.

In 1938, Chester Carlson, a physicist working independently, invented a process for printing images using an electrically charged photoconductor-coated metal plate and dry powder "toner". However, it would take more than 20 years of refinement before the first automated machine to make copies was commercialized, using a document feeder, scanning light, and a rotating drum.

Joseph C. Wilson, credited as the "founder of Xerox", took over Haloid from his father. He saw the promise of Carlson's invention and, in 1946, signed an agreement to develop it as a commercial product. Wilson remained as President/CEO of Xerox until 1967 and served as Chairman until his death in 1971.

In 1956, Haloid formed a joint venture in the UK with Rank Organisation whose Rank Precision Industries Ltd. subsidiary was charged with anglicizing the US products. Rank's Precision Industries went on to develop the Xeronic computer printer and Rank Data Systems Ltd was set up to bring the product to market. It used cathode ray tubes to generate the characters and forms could be overlaid from microfilm images. Initially, they planned for the Ferranti and AEI computer companies to sell the Xeronic as an on-line peripheral, but due to interface problems, Rank switched to a magnetic tape off-line technique. In 1962, Lyons Computers Ltd. placed an order for use with their LEO III computer, and the printer was delivered in 1964. It printed 2,888 lines per minute, slower than the target of 5,000 lpm.

Looking for a term to differentiate its new system, Haloid coined the term xerography from two Greek roots meaning "dry writing". Haloid changed its name to Haloid Xerox in 1958 and then Xerox Corporation in 1961.

The company came to prominence in 1959 with the introduction of the Xerox 914, "the most successful single product of all time". The 914, the first plain paper photocopier, was developed by Carlson and John H. Dessauer; it was so popular that by the end of 1961 Xerox had almost $60 million in revenue. The product was sold by an innovative ad campaign showing that even monkeys could make copies at the touch of a button - simplicity would become the foundation of Xerox products and user interfaces. Revenues leaped to over $500 million by 1965.

In 1960, a xerography research facility called the Wilson Center for Research and Technology was opened in Webster, New York.

In 1961, the company changed its name to Xerox Corporation.

Xerox common stock (XRX) was listed on the New York Stock Exchange in 1961.

Xerox embarked on a series of acquisitions. It purchased University Microfilms International in 1962.

In 1963, Xerox introduced the Xerox 813, the first desktop plain-paper copier, realizing Carlson's vision of a copier that could fit on anyone's office desk. Ten years later, in 1973, a basic, analog, color copier, based on the 914, followed. The 914 itself was gradually sped up to become the 420 and 720. The 813 was similarly developed into the 330 and 660 products and, eventually, also the 740 desktop microfiche printer.

Xerox purchased Electro-Optical Systems in 1963.

Xerox's first foray into duplicating, as distinct from copying, was with the Xerox 2400, introduced in 1966. The model number denoted the number of prints produced in an hour. Although not as fast as offset printing, this machine introduced the industry's first automatic document feeder, paper slitter and perforator, and collator (sorter). This product was soon sped up by fifty percent to become the Xerox 3600 Duplicator.

Xerox purchased R. R. Bowker in 1967.

In 1968, C. Peter McColough, a longtime executive of Haloid and Xerox, became Xerox's CEO.

The company consolidated its headquarters at Xerox Square in downtown Rochester, New York, with its 30-story Xerox Tower.

Xerox acquired Scientific Data Systems (SDS), which it renamed the Xerox Data Systems (XDS) division and which produced the Sigma line and its successor XDS 5xx series of mainframe computers in the 1960s and 1970s.

The laser printer was invented in 1969 by Xerox researcher Gary Starkweather by modifying a Xerox 7000 copier. Xerox management was afraid the product version of Starkweather's invention, which became the 9700, would negatively impact their copier business so the innovation sat in limbo until IBM launched the 3800 laser printer in 1976.

Archie McCardell was named president of the company in 1971.

David T. Kearns, a Xerox executive since 1971, took over as CEO in 1982. The company was revived in the 1980s and 1990s, through improvement in quality design and realignment of its product line. Attempting to expand beyond copiers, in 1981 Xerox introduced a line of electronic memory typewriters, the Memorywriter, which gained 20% market share, mostly at the expense of IBM.

Xerox introduced the Xerox 6500, its first color copier. During McCardell's reign at Xerox, the company announced record revenues, earnings, and profits in 1973, 1974, and 1975.

The first commercial non-impact printer was the Xerox 1200, introduced in 1973, based on the 3600 copier. It had an optical character generator designed by optical engineer Phil Chen.

In the mid-1970s, Xerox introduced the "Xerox 9200 Duplicating System". Originally designed to be sold to print shops to increase their productivity, it was twice a fast as the 3600 duplicator at two impressions per second (7200 per hour). It was followed by the 9400, which did auto-duplexing, and then by the 9500, which was which added variable zoom reduction and electronic lightness/darkness control.

Xerox sold XDS to Honeywell in 1975.

In a 1975 Super Bowl commercial for the 9200, Xerox debuted an advertising campaign featuring "Brother Dominic", a monk who used the 9200 system to save decades of manual copying. Before it was aired, there was some concern that the commercial would be denounced as blasphemous. However, when the commercial was screened for the Archbishop of New York, he found it amusing and gave it his blessing. Dominic, portrayed by Jack Eagle, became the face of Xerox into the 1980s.

Following these years of record profits, in 1975, Xerox resolved an anti-trust suit with the United States Federal Trade Commission (FTC), which at the time was under the direction of Frederic M. Scherer. The Xerox consent decree resulted in the forced licensing of the company's entire patent portfolio, mainly to Japanese competitors. Within four years of the consent decree, Xerox's share of the U.S. copier market dropped from nearly 100% to less than 14%.

In 1977, following IBM's laser printer introduction, the Xerox 9700 was introduced. Laser printing eventually became a multibillion-dollar business for Xerox.

In 1979, Xerox purchased Western Union International (WUI) as the basis for its proposed Xerox Telecommunications Network (XTEN) for local-loop communications. However, after three years, in 1982, the company decided the idea was a mistake and sold its assets to MCI at a loss.

In 1979, Steve Jobs made a deal with Xerox's venture capital division: He would let them invest $1 million in exchange for a look at the technology they were working on. Jobs and the others saw the commercial potential of the WIMP (Window, Icon, Menu, and Pointing device) system and redirected development of the Apple Lisa to incorporate these technologies. Jobs is quoted as saying, "They just had no idea what they had". In 1980, Jobs invited several key PARC researchers to join his company so that they could fully develop and implement their ideas.

In 1980, Xerox announced the 5700 laser printing system, a much smaller version of their 9700, but with revolutionary touch screen capabilities and multiple media input (word processing disks, IBM magcards, etc.) and printer 'finishing' options. This product was allegedly never intended to make the commercial markets due to its development cost, but rather to show the innovation of Xerox. It took off with many customers but was soon replaced with its smaller and lower cost 2700 Distributed Electronic Printer offering in 1982.

In 1981, Xerox released a system similar to the Alto, the Xerox Star. It was the first commercial system to incorporate technologies that have subsequently become commonplace in personal computers, such as a bitmapped display, window-based GUI, mouse, Ethernet networking, file servers, print servers and e-mail. The Xerox Star and its successor the Xerox Daybreak, despite their technological breakthroughs, did not sell well due to its high price, costing $16,000 per unit. A typical Xerox Star-based office, complete with network and printers, would have cost $100,000.

In 1983, Xerox bought Crum & Forster, an insurance company, and formed Xerox Financial Services (XFS) in 1984.

In 1985, Xerox sold all of its publishing subsidiaries including University Microfilms and R. R. Bowker.

In the mid-1980s, Apple considered buying Xerox; however, a deal was never reached. Apple instead bought rights to the Alto GUI and adapted it into a more affordable personal computer, aimed towards the business and education markets. The Apple Macintosh was released in 1984, and was the first personal computer to popularize the GUI and mouse among the public.

Xerox common stock (XRX) was listed on the Chicago Stock Exchange in 1990.

In 1990, Paul Allaire, a Xerox executive since 1966, succeeded David Kearns, who had reached mandatory retirement age. Allaire disentangled Xerox from the financial services industry.

Development of digital photocopiers in the 1990s and a revamp of the entire product range again gave Xerox a technical lead over its competitors. In 1990, Xerox released the DocuTech Production Publisher Model 135, ushering in print-on-demand. Digital photocopiers were essentially high-end laser printers with integrated scanners. Soon, additional features such as network printing and faxing were added to many models, known as Multi-Function Machines, or just MFMs, which were able to be attached to computer networks. Xerox worked to turn its product into a service, providing a complete document service to companies including supply, maintenance, configuration, and user support.

To reinforce this image, the company introduced a corporate signature in 1994, "The Document Company", above its main logo, and introduced a red digital X. The digital X symbolized the transition of documents between the paper and digital worlds.

In April 1999, Allaire was succeeded by Richard Thoman, who had been brought in from IBM in 1997 as president. The first "outsider" to head Xerox, Thoman resigned in 2000.

In 2000, Xerox acquired Tektronix color printing and imaging division in Wilsonville, Oregon, for US$925 million. This led to the current Xerox Phaser line of products as well as Xerox solid ink printing technology.

On May 31, 2001, Xerox Corporation announced that its auditors, KPMG LLP, had certified Xerox's financial statements for the three years ended December 31, 2000. And the financials included some restatements.

After Thoman's resignation, Allaire again resumed the position of CEO and served until the appointment of Anne M. Mulcahy, another long-term Xerox executive. Xerox's turnaround was largely led by Mulcahy, who was appointed president in May 2000, CEO in August 2001, and chairman in January 2002. She launched an aggressive turnaround plan that returned Xerox to full-year profitability by the end of 2002, along with decreasing debt, increasing cash, and continuing to invest in research and development.

On March 31, 2002, Xerox restated its financials which reflected the reallocation of equipment sales revenue of more than $2 billion.

On April 11, 2002, the U.S. Securities and Exchange Commission filed a complaint against Xerox. The complaint alleged Xerox deceived the public between 1997 and 2000 by employing several "accounting maneuvers," the most significant of which was a change in which Xerox recorded revenue from copy machine leases – recognizing a "sale" when a lease contract was signed, instead of recognizing revenue over the entire length of the contract. At issue was when the revenue was recognized, not the validity of the revenue. Xerox's restatement only changed what year the revenue was recognized.

In 2002, PARC was spun off into an independent wholly-owned subsidiary of Xerox.

On January 29, 2003, the SEC filed a complaint against Xerox's auditors, KPMG, alleging four partners in the "Big Five" accounting firm permitted Xerox to "cook the books" to fill a $3 billion "gap" in revenue and $1.4 billion "gap" in pre-tax earnings. In April 2005 KPMG settled with the SEC by paying a US$22.48 million fine. Meanwhile, Xerox paid a civil penalty of $10 million. As part of the settlement, KPMG neither admits nor denies wrongdoings.

In response to the SEC's complaint, Xerox Corporation neither admitted nor denied wrongdoing. It agreed to pay a $10 million penalty and to restate its financial results for the years 1997 through 2000. On June 5, 2003, six Xerox senior executives accused of securities fraud settled their issues with the SEC and neither admitted nor denied wrongdoing. They agreed to pay $22 million in penalties, disgorgement, and interest. The company received approval to settle the securities lawsuit in 2008.

In September 2004, Xerox celebrated the 45th anniversary of the Xerox 914. More than 200,000 units were made around the world between 1959 and 1976, the year production of the 914 was stopped. Today, the 914 is part of American history as an artifact in the Smithsonian Institution.

In November 2006, Xerox completed the acquisition of XMPie. XMPie, a provider of software for cross-media, variable data one-to-one marketing, was the first acquisition of Xerox to remain an independent entity, as a Xerox company and not a division, and to this day is led by its original founder Jacob Aizikowitz.

In October 2008, Xerox Canada Ltd. was named one of Greater Toronto's Top Employers by Mediacorp Canada Inc., which was announced by the Toronto Star newspaper.

On May 21, 2009, it was announced that Ursula Burns would succeed Anne Mulcahy as CEO of Xerox. On July 1, 2009, Burns became the first African American woman to head a company the size of Xerox.

On September 28, 2009, Xerox announced the intended acquisition of Affiliated Computer Services, a services and outsourcing company, for $6.4 Billion. The acquisition was completed in February 2010. Xerox said it paid 4.935 Xerox shares and $18.60 cash for each share of ACS, totaling $6.4 billion, or $63.11 a share for the company.

In May 2011, Xerox acquired NewField IT for an undisclosed sum. NewField IT developed the Asset DB toolset which is widely used across the managed print services (MPS) market along with MPS market-leading consulting and software services delivering a large impact for this relatively small acquisition.

In December 2013, Xerox sold their Wilsonville, Oregon solid ink product design, engineering and chemistry group and related assets previously acquired from Tektronix to 3D Systems for $32.5 million in cash.

In January 2016, Xerox—reportedly under pressure from activist shareholder Carl Icahn—announced that by the end of the year it would spin off its business services unit, largely made up of Affiliated Computer Services, into its own publicly-traded company. The name and management of the new company had not been determined at the time of the announcement. Icahn will appoint three members of the new company's board of directors, and he will choose a person to advise its search for a CEO.

In June, the company announced that the document management business would retain the name Xerox and the new business services company would be named Conduent. It also announced that Ashok Vemuri will serve as Conduent's CEO and that Icahn will control three seats on the new company's board. It continues to seek a CEO for Xerox; in May, Burns announced her intention to step down as CEO but continue as chairman of the document management business.

In June 2016, the company announced that Jeff Jacobson will become the new CEO following the completion of the company's planned separation. This became effective in January 2017.

On January 31, 2018, Xerox announced that Fujifilm had agreed to acquire a 50.1% controlling stake in the company for US$6.1 billion, which was to be combined into their existing joint venture Fuji Xerox (having a value of $18 billion post-acquisition).

On May 1, 2018, it was announced that Chairman Robert Keegan and CEO Jeff Jacobson and four other directors would resign as part of a deal with investors Carl Icahn and Darwin Deason, who had mounted a proxy fight to oppose the Fujifilm deal. On May 4, Xerox backed away from the deal after stipulations about ceasing litigation were not met.

Icahn and Deason responded with an open letter to shareholders blaming the board and management. On May 13 a new deal was reached that additionally canceled the Fujifilm transaction.

In November 2019, Xerox began to pursue a hostile takeover of PC and printer manufacturer HP Inc., declaring its intent to "engage directly" with shareholders after HP rejected two unsolicited bids for the company.

In February 2020, Xerox announced the hiring of Tali Rosman as VP of Xerox's 3D business. She joins Xerox from NICE, where she was vice president and head of business operations for the Americas. She will report to CTO Naresh Shanker.

On March 5, HP revealed that its board of directors has unanimously declined Xerox's $24 a share cash-and-stock offer.

On March 13, Xerox revealed that they are putting their campaign to acquire HP on hold by postponing additional presentations, interviews with the press, and meetings with HP shareholders. Xerox Vice Chairman and Chief Executive John Visentin cited the COVID-19 pandemic as the main reason and said, "In light of the escalating Covid-19 pandemic, Xerox needs to prioritize health and safety of its employees, customers, partners and affiliates over and above all considerations, including its proposal to acquire HP".

On March 31, 2020, Xerox abolished its $24 a share offer.