Scientific Data Systems
Palevsky felt that ten percent of the market of small to medium size scientific and process control computers was being totally neglected. He started looking for venture capital to start a company to address this market, and through contacts from the University of Chicago was able to raise $1 million from Arthur Rock and the Rosenwald family of the Sears Roebuck fortune. He left Packard Bell with eleven associates from the computer division to found Scientific Data Systems of California in September 1961.
Within a year they introduced the SDS 910, which made the company profitable. Initially, it targeted scientific and medical computing markets. From 1962 to 1965, the company introduced seven computers, all of them commercial successes. On March 15, 1966, they introduced the Sigma 7, the first of a family of machines that marked the full-scale entry of the company into new areas of business data processing, time sharing, and multiprocessing. The Sigma 7 had business capabilities because the once-separate disciplines of business and scientific electronic data processing had developed to the point where one machine could handle both. SDS captured a little more than two per cent of the overall digital computer market in 1966 and continued to grow with the market.
Palevsky sold SDS to Xerox in May 1969 for $92 million, with Arthur Rock's assistance, at which time he became a director and Chairman of the Executive Committee of Xerox Corporation. Palevsky's initial investment of $60,000 in SDS became nearly $100 million at the sale. He retired as a director of Xerox in May 1972.
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