Xerox failed to profit directly, because the Alto was designed as a hyped-up minicomputer to compete with systems from DEC and IBM - a reasonable choice, because that's what business computing looked like back then.
Xerox didn't lack the commercial understanding to sell Alto+spinoffs, it lacked the understanding to realise you could build a developer ecosystem to support your hardware and make it the de facto standard.
DEC and IBM didn't understand this either. Gates and Jobs totally understood it, which is why Windows became a business standard and the Mac became the only serious business/home alternative.
But Xerox still did okay, because the use of GUI software transformed office culture and made it much more visual - which meant very steady sales of copiers and printers.
Xerox's stock price climbed steadily through the 1990s while paper remained a thing.
After the dot com crash, GUIs and screens had evolved to the point where paper became non-essential, and Xerox never entirely recovered - although you can still find a few people who print out and file all their emails.
tl;dr Xerox did very nicely indeed from Alto etc in an indirect way, for at least a decade or so.
Xerox didn't lack the commercial understanding to sell Alto+spinoffs, it lacked the understanding to realise you could build a developer ecosystem to support your hardware and make it the de facto standard.
DEC and IBM didn't understand this either. Gates and Jobs totally understood it, which is why Windows became a business standard and the Mac became the only serious business/home alternative.
But Xerox still did okay, because the use of GUI software transformed office culture and made it much more visual - which meant very steady sales of copiers and printers.
Xerox's stock price climbed steadily through the 1990s while paper remained a thing.
After the dot com crash, GUIs and screens had evolved to the point where paper became non-essential, and Xerox never entirely recovered - although you can still find a few people who print out and file all their emails.
tl;dr Xerox did very nicely indeed from Alto etc in an indirect way, for at least a decade or so.