"And they showed me really three things, but I was so blinded by the first one that I didn't even really see the other two.
One of the things they showed me was Object Oriented Programming. They showed me that, but I didn't even see that.
The other one they showed me was really a networked computer system. They had over a hundred Alto computers, all networked, using email, et cetera, et cetera. I didn't even see that.
I was so blinded by the first thing they showed me, which was the Graphical User Interface. I thought it was the best thing I'd ever seen in my life. Now remember, it was very flawed; what we saw was incomplete, they'd done a bunch of things wrong, but we didn't know that at the time. Still though, the germ of the idea was there, and they'd done it very well.
And, within, you know, ten minutes, it was obvious to me that all computers would work like this. Basically, they were copier-heads that just had no clue about a computer or what it could do. And so they just grabbed defeat from the greatest victory in the computer industry. Xerox could have owned the entire computer industry today. Could have been a company ten times its size. Could have been IBM. Could have been the IBM of the 90s. Could have been the Microsoft of the 90s."
I find it amusing how Steve Jobs crams three negs into one sentence.
> Both the Macintosh and Lisa projects were underway before the 1979 visit. Documents in The Book of Macintosh (a collection of essays, technical specs, and brainstorms written by Jef Raskin on and others) dating from the fall of 1979-- months before the PARC visit-- show that the Macintosh was going to feature user-friendly interfaces; a screen that could handle multiple fonts (that is, bitmapped screens); graphics capabilities; and a graphical input device
It also comments that the myth "assumes that Xerox PARC's ideas weren't well-known before Apple engineers saw them, or had even been actively kept hidden from public view." I see echos of that in your own comment that Smalltalk was a secret. As that Stanford link points out "Bill Atkinson had read about Smalltalk as an undergraduate. Some had worked at PARC: Jef Raskin spent time there during a sabbatical year at Stanford, and had a number of friends who were researchers there."
I think you have misremembered the part about Smalltalk and overlapping windows being a secret? Ingalls wrote "The Smalltalk-76 programming system design and implementation" for POPL '78, in Proceedings of the 5th ACM SIGACT-SIGPLAN symposium on Principles of programming languages (doi:10.1145/512760.512762). It shows overlapping windows for figures 1-3, where figure 1 is "A typical Smalltalk display." It also has "if the stylus is depressed within the window, the content is redisplayed, thus showing it “in front of” the other windows", which is a description of how overlapping windows works.
As some additional background, you mentioned "forced by management to show Steve Jobs all the secret stuff". This is because, and quoting again from that Stanford link, "Xerox's venture capital arm had recently made an investment in Apple, and had agreed to show Apple what was going on in its lab."
A lab, by the way, which received thousands of visitors each year.
Apple likewise didn't produce a GUI for their contemporary computers.
The most that people seemed to really be shooting for was higher density text displays and colorful graphics, but nobody had really figured out the magical combination of manipulation device and interface metaphor and Jobs did just "get it" and understood why it would be a major differentiator - few people had more than one computer to network, and few people liked programming.
I recommend "Dealers of Lightning" for the best description of Steve Jobs' visits and their impact on him. The short summary is there were two visits to PARC in December 1979. Adele Goldberg tried to demonstrate just the publicly-announced technology (WYSIWYG browser, mouse, drawing program) but was forced by management to show Steve Jobs all the secret stuff (e.g. Smalltalk, overlapping windows). Steve Jobs considered the three mind-bending things he saw to be the user interface, object-oriented programming and networking, but he was "saturated" by the UI and missed the significance of the others. The book goes into detail on exactly what Apple was doing before the visit and how it changed their plans. The book has a whole chapter on this, way more than I can cover here, so please read the book if you're interested in this.