Xerox first became interested in office automation through computers in 1969 and purchased Scientific Data Systems or SDS.

They then renamed the division Xerox Data Systems or XDS; they saw limited success, and the division was ultimately sold to Honeywell at a significant loss.

The Model 2 was able to process in multi-programmed batch, remote batch, conversational time-sharing, real-time, and transaction processing modes.

All models featured a CPU with at least a floating-point arithmetic unit, Memory map with access protection, Memory write protection, Two real-time clocks, a Power fail-safe, an External interface, Ten internal interrupt levels.

Also a Multiplexor input/output processor (MIOP) featuring Channel A with eight sub-channels.