Xerox Inxight Parc Spin off

Introduction

Mohan Trikha had a vision to maximize the value of two of Xerox PARC technologies: visualization and linguistics, both which were 20 years in the making. Trikha attempted to embed these technologies in as many applications as possible through the creation of a Xerox New Enterprise (XNE), Inxight. His objective was to demonstrate to the Xerox management team through a business plan, the feasibility and profitability of such a spin-out, as well as the validity in its creation to support Xerox’s long-term strategic goals. Trikha needed to assess the impact of recent developments that may blemish his business plan and, at the same time, come up with alternatives for damage control. Trikha attained his product-line management experience from his early days with IBM and management experience as the vice president of one of Xerox’s software businesses. Because the visualization market in 1996 was in its infancy with no clear competitors, the opportunity to commercialize Xerox’s visualization and linguists technologies remained significant. However, there could be competition from companies as large as Microsoft in the near future

In this case study, we will address Inxight’s upcoming challenges, specifically,

Coast to Coast will recommend crisis management strategies against the possible negative effects stemming from Stu Card’s decision to remain with PARC, defensive tactics to protect Inxight from Microsoft’s marginal penetration, the possible infiltration of the company’s technologies, as well as other recommendations. This need is critical as Microsoft’s intentions were evident through the company’s employment offer to key visualization research team member, Robertson and their acquisition of NetCarta.

Considering the aforementioned challenges, our recommendations focus on a comprehensive assessment of Trikha’s business proposal along with attempts that could be implemented to strengthen Inxight within the startup’s current assets and competitive advantages.

There will be nine sections to this study. Some of which may contain subsections. We will begin with generic case materials and a series of recommendations.

Background

Inxight, Trikha’s start-up, is a creation of a new Xerox business within the XNE group. XNE startups are managed by the XNE board with its manager, Colin O’Brien reporting to the CFO of Xerox, Barry Romeril. XNE was established to manage promising technology and business projects that did not fit well inside Xerox’s corporate structure but could eventually complement Xerox’s long-term strategies in the future. XNE enjoys the benefits of both worlds: the power of the Xerox Corporation and the intensive entrepreneurial environment of a startup. XNE’s are quasi-independent entities, differing in benefits and cost structures, half owned by Xerox. Business Development Executive, Andy Garman and six other HR and Finance professionals collectively manage XNE. Although entrepreneurial thinking and the clean slate of XNE employees contributed to the intensive entrepreneurial environment of these quasi-independent entities, the complex internal cost allocations to businesses within Xerox made it difficult to assess XNE employees’ profit contribution to the overall efforts.

To materialize his vision, Trikha needed to justify the creation of an Inxight, a XNE vehicle through which he capitalized Xerox’s leading edge research into viable commercial grade software products. Inxight’s target was to attain profitability within three years, recruit and retain outside customers who have not already engaged with Xerox, prove credibility and demonstrate profitability. Besides value creation and revenue generation, Xerox management must be convinced that Inxight has successfully exploited the synergies of Xerox’s core businesses to support the technology behind developing visualization and linguistic commercialized packages.

XNE manages both hardware and software businesses. The visualization and linguistic commercialized packages fall into the category of software business alongside packages associated with workflow management and data repository management. Research on visualization and linguistic technology were both conducted at Xerox’s PARC for a period of 20 years. The visualization technology team was led by one of the top 1% Xerox researchers, Stu Card. His recent decision to stay in the more academic environment of PARC, instead of joining Inxight, opened a large gap in Inxight’s technical expertise front. PARC’s visualization technology has gone through many phases, from point-and-click graphical