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Executive interview: Tolga Kurtoglu, CEO, Parc

Palo Alto Research Center – formerly Xerox Parc – is the home of the modern computer. We speak to its new CEO about innovation

Inventions that came from Parc include the laser printer; the Smalltalk programming language; Alto, the world’s first computer with a graphical user interface; and local area networking protocol Ethernet.

Steve Jobs and Steve Wozniak were inspired by the Alto’s design, leading them on a path that eventually led to the Apple Macintosh. Then Bill Gates and Paul Allen from Microsoft joined the party, kicking off the development of Windows.

Ethernet was co-developed by Robert Metcalfe and David Boggs in the early 1970s. Metcalfe left Xerox, formed 3Com and convinced some of the leading computer firms of the time to adopt Ethernet technologies, making it a de facto standard.

Metcalfe’s Law, the aptly titled network effect, defines how the value of a network is proportional to the number of connected users in it. This concept is being applied over and over again to take innovative breakthroughs in technology and make them mainstream.

Tolga Kurtoglu was appointed CEO at Parc in January 2017, having previously headed up its System Sciences Lab (SSL), where he was responsible for a research portfolio in artificial intelligence (AI), machine learning, analytics, geometric reasoning, modelling and simulation, and cyber-physical security.

Speaking of how the organisation has changed, he says: “In 2002, Parc was spun off and we changed our business model from being a captive R&D centre for Xerox to being an innovation centre. We practice an open innovation business model.”

However, the business is still a wholly owned subsidy of Xerox, which means it still does a significant amount of work for its parent company.

“Today, the business model is to provide R&D services and work as an innovation partner for companies ranging from startups to global market leaders, as well as government clients in the US,” says Kurtoglu.

“The whole innovation journey is about probing the market and validating and confirming that a given idea solves a real problem”
Tolga Kurtoglu, Parc

Among Parc’s largest research programmes is its work on energy. Kurtoglu says: “We have a set of technologies ranging from next-generation batteries. We are looking at battery production, battery lifecycle management and battery health systems. We also have a number of technologies at the intersection of internet opf things (IoT) and energy management.”

He says Parc is also looking at advanced digital manufacturing, such as additive manufacturing (3D printing) technologies, as well as software to support the digitisation of manufacturing, such as tools for product development, design and manufacturing automation, and supply chain management.

“We are seeing the intersection of computing and sensing in real time,” says Kurtoglu. “We are working on intelligent machines heavily influenced by AI to make smarter, more intelligent machines.

“These include transportation systems, automotive, aerospace and building systems that can sense their environment in real time and are becoming more self-aware. With low-cost sensing, you can collect and look at a vast quantity of data, from which you can make inferences to improve the operations of these complex systems.”

Asked about the challenges facing IoT, Kurtoglu says: “When I think about IoT and observe the types of applications, I do not think the challenges are technological. I think the challenges are to make sensors more customised and low cost, so they can be ubiquitous.”

With the explosion in sensors, there is then the question of processing all the data that is being generated, he says. “Computing is being done both in the cloud and also at local level on IoT devices.” The third challenge is interconnectivity, he adds.

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A number of high-profile projects have showcased municipal uses for IoT devices, but there is always the question of cost and whether the budget holders have the appetite to invest in technology, especially as there are often pressures to spend the budget on issues that may be of more immediate concern to citizens, such as healthcare, social services and education.

“The technological advances that I have seen suggest it is feasible to deploy sensors and network them,” says Kurtoglu. He believes sensors will fall in price from a few dollars to a few cents per sensor, giving an order of magnitude reduction in price, making a huge difference in deployment costs.

As the IoT expands from the industrial space, where sensors are deployed to solve very specific business problems, into the home user market, Kurtoglu believes the use cases are less well thought-out. “I think that a factor often overlooked in the consumer IoT market is how  to solve real problems in a way that creates real value for people,” he says. “If it doesn’t address a real pain-point, there is no reason to deploy sensors everywhere and make everything smart.”

Spirit of innovation

The success rate of startups is one in 10, says Kurtoglu, but Parc’s government and commercial clients have a different risk profile. “We do 30% of our work with government, which is high-risk, high-reward, where we explore radical ways to solve hard technical and scientific problems, so experimentation is more biased towards our government projects and often we will fail,” he says. “But the successful solutions ultimately prevail.”

On the other hand, Parc’s commercial clients are interested in projects that are quite mature, which have a shorter return on investment (ROI) and lower risk. In practice, the commercial clients benefit from the up-front risk that Parc’s government clients have already taken.

This approach may well work in a pure R&D organisation, but there are some lessons Kurtoglu says can be applied in areas such as business IT.

“Lots of ideas fail,” he says. “Looking at this holistically, it is part of the learning curve, which takes the next set of technologies forward.”

Funding ideas

R&D is about funding ideas, he says. “The whole innovation journey is about probing the market and validating and confirming that a given idea solves a real problem. This feedback comes from end-users and customers. The ideas that can demonstrate that they solve a real business problem and can gain market traction will grow and continue to exist.”

Building a team for innovation is not easy, Kurtoglu adds. A rich mix of talent from diverse backgrounds is essential to building an innovation team, he says

“You need to hire the best people. If you need creative solutions to tough problems, you need creative people who can think differently and foster an entrepreneurial culture where you are not afraid to fail, given that only one in 20 ideas you explore for a technical problem will be successful. Failing is part of the learning process. Going forward, lots of things will fail. The key is to be market-focused and listen to feedback.”

Failing is quite an emotive word, and in organisations where people are measured on their success, it must be difficult to motivate people to take risks. Drawing on the analogy of the battle and the war, Kurtoglu says: “Of course, ultimately you want to be successful, but getting there is a journey. Clearly, along that journey there will be moments where you will try things and they won’t work.”

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