Bits: AT&T Cambridge (UK) labs shuts down

Rodent of Unusual Size Ken.Coar@Golux.Com
Fri, 26 Apr 2002 10:20:07 -0400

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Subject: [interest] FWD: AT&T Cambridge (UK) labs shuts down
From: Donald Eastlake 3rd

Date: Wed, 24 Apr 2002 14:19:31 -0400
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From: Paul Saffo
Date: Wed, 24 Apr 2002 11:03:49 -0700
Subject: AT&T Cambridge labs shuts down


Wrangling money men shut down the future

John Naughton mourns the passing of AT&T's Cambridge telecommunications lab

Sunday April 21, 2002

The AT&T Laboratories in Cambridge [UK] closes next Wednesday. Some will
interpret their demise as just another consequence of the technophobia
that has supplanted the irrational exuberance of the dotcom era. Others
will see the axing of Europe's leading communications research
laboratory as an act of mindless corporate vandalism.

Both interpretations are wrong. The truth is that Intel wanted to buy
the lab and was on the brink of closing a deal. Although nobody in AT&T
will talk openly about it, the word on the street is that negotiations
foundered because the lawyers on both sides couldn't agree about
intellectual property issues.

This eleventh-hour failure is a disaster because it shatters something
magical. A great research laboratory is a very delicate organism -
rather like a great symphony orchestra. It takes years to create, and
very skilled management to keep it vibrant. Once broken up, it is
impossible to put it back together again.

Sometimes these strange social organisms run out of creative steam and
deserve to die. But the AT&T lab was not one of these. In fact, in the
last years of its life it invented what many of us thought would be one
of the defining communications devices of this century (and,
incidentally, the salvation of its telco owner) - the broadband phone.

This gizmo looks like a phone but is actually a simple networked
computer. You can dial numbers on the virtual keypad displayed on its
screen and make traditional voice calls on it. But you can also do a
visual check on whether there is a space in the office car park, or see
who rang your doorbell, or draw sketches that the other caller can
annotate in real time. You can play chess with callers, or browse the
net or read email or do a thousand other things - because it's really a
computer that happens to do telephony.

When AT&T first bought the lab, its senior executives were poleaxed by
the phone. Their chief executive even showed it off to Bill Gates. But
as the company started its long slide down the telco chute, AT&T execs
forgot about it. So instead of creating a new future for the humble
telephone, these amazing devices invented in Cambridge will probably
wind up in a skip.

The broadband phone was just the latest in a long line of innovative
technologies spewed out by the lab's 50-odd researchers over 15 years.
Others included: the active badge system, which enabled a building to
locate any of its occupants wherever they happened to be; the 'virtual
network computer' -- a wonderful software system now in daily use in
millions of locations across the world; low-power embedded-radio
technology; and some stunning systems for the automated indexing and
retrieval of multimedia content.

During its brief life, the lab also spun out a number of successful
companies - one of which, Virata, is now a global leader in
communications hardware and software for internet access equipment

At the last count, approaching 100 of the lab's alumni had become
millionaires as a result of participation in these spin-outs. Chancellor
Gordon Brown often laments the inability of British researchers to
capitalise on their ingenuity. Yet here in Cambridge was a living,
breathing refutation of his despairing pessimism. And it's closing this
Wednesday - because two groups of American corporate lawyers could not
reach an agreement about intellectual property.

The lab was founded in 1987 by Herman Hauser and Andy Hopper as the
Olivetti Research Laboratory. Both co-founders had taught at the
university's computing laboratory and had been involved in Acorn, the
company that made the BBC Microcomputer.

Olivetti had bought Acorn when it ran into difficulties. After a short
period, Hauser left to embark on a career as a successful venture
capitalist. Hopper - who remained an academic throughout and is now a
professor of communications engineering - became sole director.

From=20the outset, the lab was a limited company owned by Olivetti,
rather than a department of the Olivetti organisation. This turned
out to be an important distinction, because it gave Hopper a degree
of freedom that he would not have enjoyed as an executive of a

Over the years, ownership of the lab changed, but it retained its status
as a separate company. First Digital came in as co-owner, to be replaced
some years later by Oracle.

In the end, Hopper decided to look for a more stable proprietor and came
up with AT&T, which agreed to fund the lab's activities to the tune of
=A35 million a year for six years. Given that 'Ma Bell' was then an
enormous, stable enterprise - and the long-term owner of Bell Labs - it
seemed a shrewd choice. Hopper couldn't have foreseen the maelstrom that
eventually caused AT&T to slash its research budget - and axe its
Cambridge lab.

In the IT research world, Hopper's ability to preserve his researchers'
autonomy in the corporate jungle attracted widespread admiration.

'It is a very striking achievement by Andy to have kept the show on the
road as long as he did,' one of his peers said. 'None of the
owners/funders have been much good at exploiting the developments of
that lab, but Andy has done a number of successful spin-out companies,
which over the years have reduced the net cost to the sponsor to a very
low level. However, they don't generate the revenue quarter on quarter
that the bean-counters want to see.'

And that, of course, goes to the heart of it. To run a great research
lab, you have to be the antithesis of a bean counter. Your job is to
recruit the smartest people you can find, and then let them do their
stuff. Often these people have difficult, complex personalities - yet
you have to trust them. If you do, they will often repay that trust by
'dealing lightning with both hands' -- to use Alan Kay's memorable
phrase about his colleagues at Xerox PARC.

In Hopper's lab there was a rule that anyone could buy anything on his
own authority so long as it cost less than =A31,000. If you wanted
something more expensive, you had to get another signature, but that was
usually a breeze.

It was known colloquially as the 'toys budget' and it was, no doubt,
sometimes used for frivolous purchases. But in the main it was not. And
it meant that the lab's researchers always had the latest gizmos - and
the freedom to take them apart and see how they worked.

This kind of freedom is anathema to the bean-counters and lawyers of
this world. And it illustrates why the closure of the AT&T lab has a
wider significance. If society is to reap the full potential of
computing and information technology, we need hundreds of labs of this
calibre. Yet we are evolving a corporate ecology that is increasingly
hostile to the freewheeling ethos they need in order to thrive.

Labs like Hopper's create the future. Without them, will we have one?