If you knew someone who spent half of their life savings on anson's career has taken some interesting turns. engagement ring, you would think they were mad. But that is exactly what Toshiba's Alan Thompson did, spending pounds 70 on his token of love. At the time, he worked as a missionary for a Christian organisation, receiving no wages for a year.
While his mother-in-law may have raised her eyebrows about her future son-in-law's prospects - especially as he later postponed the wedding while he fulfilled his ambition of being a missionary - this same man has been director of the PC division at Toshiba for the past four years, spending eight years in total at the hardware vendor. Presumably he's on a decent salary now.
Following his year as a missionary, Thompson joined Rank Xerox as district manager. He then tasted life as a reseller as a Toshiba dealer before spending seven years in purgatory at IBM.
Having spent a number of years in the business, one of the things that strikes Thompson most is the fact that the industry has lost its entrepreneurial spirit. After thinking long and hard he can only come up with two examples of entrepreneurs: Neville Davis, chief executive of Compel, and Peter Rigby, owner of Specialist Computer Holdings. But while Thompson admires these entrepreneurs, he does not describe himself as one.
'You have to be unusual to take risks nowadays in this market,' he says.
'The real entrepreneurs have gone. You either have to be independently wealthy or manage that risk well. You can't decide to be an entrepreneur, it is a characteristic. We are in a crazy business where time is accelerated.
In most industries you have 10 years in which to be successful - we only get one or two years.'
Thompson believes the key to success is not changing the leadership of companies too rapidly. He highlights Apple as an example of a company which appears to be doing well now despite being on the brink of failure for a long time. Thompson cites the reappearance of Steve Jobs, founder of Apple, as the reason for its recent success.
While Thompson's comments were made prior to the departure of Eckhard Pfeiffer, chief executive of Compaq (PC Dealer, 21 April), he was not surprised that Compaq - which had just announced a profit warning for its first quarter - was having problems. He attributes these to the difficulties the vendor was facing in merging two very different cultures together following its acquisition of Digital. While Compaq is seen as lean and mean, Digital was viewed as a more gentle organisation. Thompson sees Compaq's fortunes on a change curve, with the company slipping further down the slope before it manages to claw itself back up again to experience better fortunes. According to Thompson, this change curve could take up to two years to go through.
While a number of people from Toshiba left the company to take jobs at Digital and then rang up requesting their old jobs back when Compaq bought the company, Thompson is adamant he would not rehire any of them.
'We don't take people back as you can't pick up where you left off. The grass is rarely greener on the other side. While it may seem better, it is always the same set of problems wherever you are and you should accept what problems you have.'
On the subject of Compaq, Thompson is critical of the company's indirect policy. He claims: 'It is like wanting a child but not wanting to change its nappies. You have to be indirect or direct - you can't be both.'
He adds: 'Compaq is trying to out-Dell Dell, but in a way that changes the rules for its partners. People don't know where they stand. Compaq has to be clear on what part the channel plays in its plans. It makes up a huge chunk of the channel's business so if it destabilises, it will affect the entire industry.
'Compaq has a responsibility to the industry as a whole. There is an awful tendency to try something different by imitation. No one has ever been different by imitation.'
But Thompson is adamant that the channel is best equipped to fight off the threat of Dell. Toshiba's attempt at helping its partners was to set up a Skills Academy to bridge the skills gap. Resellers can use the consultancy skills of third parties if they don't have the skills or time to train staff.
'Dell is good at sales, marketing and supply management. It is good for desktops because they can be built like Lego. But this is not the case with notebooks, as the number of competitors is huge. Build-to-order is very difficult as there are too many components to account for.'
In the future, Toshiba will further equip its resellers by passing over the configuration of its desktops to the channel. It has spent the past two years putting a system in place that allows Toshiba to buy, procure, build and service its desktops.
Thompson claims the performance of Toshiba's desktop business in the UK has achieved its objective since it entered the market two years ago.
'Our desktop business is breaking even. It doesn't make any money nor lose any. It is a healthy business to expand upon on,' he says.
While many corporates have stated that they will cut back to using just two or three suppliers - which was one of the big deciders for Toshiba to move over to desktops - the vendor has failed to capitalise on this market. Instead it has seen more sales from the SME market, as these businesses are less worried about brand names. Thompson sees more sales being generated through SMEs because the year 2000 situation will reduce demand for the larger brand companies towards the end of this year and the beginning of the millennium, as corporates stick with their existing models. Toshiba is also planning to make an assault on the server market later this year, again targeting the SME sector.
He does, however, think Compaq's recent criticism of how much business Dell actually does through the channel is applaudable. Thompson wishes he had thought of it himself, as his marketing department gave him a hard time about the campaign.
Thompson does not see the direct business getting any bigger. While, over the years, the industry has experienced a shift in business through mail - order companies, the channel and vendors have worked together to take account of this growth. There are now more shops and more salespeople on the roads as a consequence.
'People need to wake up to Dell. Fashion says we need to cut out the middleman but Dell's products are not that good and they are the same price as others on offer. No one knows what mail-order organisations do, so there is an opportunity there for the channel.'
Thompson highlights the example of a company that wanted to change its salesman at Dell because it didn't get on with him. However, because of the inflexibility of Dell's internal system, this was unable to happen.
Dell, therefore, lost any future sales from this customer.
'Dell doesn't listen to what people want. The bigger it becomes, the more monolithic it becomes. The diversity of the channel is a strength for Toshiba. We will be able to improve our service because of the skills of our resellers.
'The channel has got to show that its value-add is greater than Dell's.
This is possible. You still need people to show you how things work and either Dell has to employ these people or the channel does. We have to show customers what they want at a competitive price and with the service they want.'
As part of showing the customer want it wants, Toshiba has recently embarked on a restructure. As revealed in PC Dealer (17 March), the vendor's 15 business groups have been reduced to eight companies to give each more autonomy and full responsibility for development and financial performance.
Toshiba's PC and notebook business is now part of the Digital Media Equipment & Services Company, along with digital products such as TVs and DVD drives.
Thompson says the restructure means that the business will stand on its own and not be dragged down by other parts of Toshiba which are not doing so well, such as the semiconductor business. There is also a plan to eventually float the businesses on the Stock Exchange on their own merits.
Thompson does not view Toshiba as a typically Japanese-run company. He claims that because he has been at the manufacturer eight years, he has more say in the way decisions are made than his colleagues in the US.
Thompson goes to Japan two or three times a year, with his last visit taking more than 150 MPs there as part of the IT committee to show them around Toshiba's headquarters.
Not only has Thompson experienced changes at Toshiba, he has also seen changes in the Japanese way of life since his first visit in 1978. Then, no one understood much English, whereas nowadays everyone under 35 can give directions to tourists in perfect English. Thompson says there has been a subtle but massive change in Japan where the feudal system is being slowly wiped out. One drawback with the Japanese system is that businesses have to be careful about redundancies because losing your job is seen as personal failure and results in a loss of status within society.
Despite being Japanese owned, the UK arm of Toshiba stands on its own within the group, as well as being the only manufacturer in the UK not to use distributors. Throughout mainland Europe, Toshiba has a relationship with one of two distributors - either Ingram Micro or Computer 2000.
It is this aversion to distributors which has led observers to comment that Toshiba has one of the strongest and most loyal relationships with resellers, as the manufacturer has direct control over what happens to its product. As Thompson puts it, Toshiba has never needed to use distributors because the scenario did not offer any more value add.
But this may not be the case forever. While Thompson is adamant that there are no definite plans, he admits that the shape of the distribution market is changing and could become more attractive.
'Hybrid distribution grew because IBM gave an extra one per cent margin if resellers took on a minimum volume quota. In fact, I was responsible for giving away this extra margin. This meant that resellers set up hybrids.
'We have managed to achieve our marketing objectives without using broadline distributors. We have kept a close relationship with distributors over the years, but we didn't need them. However, I have a feeling that hybrids are losing their grip on the CPU market. Our figures have shown that market share for broadliners went up from 20 per cent to 23 per cent last year.
This is what interests us, as vendors are leveraging themselves off the distributors. You have to decide what value you are adding to the whole picture and then make sure you make money.'
Whether Toshiba takes on distributors or not, the manufacturer faces two challenges - building up its desktop presence and making a successful debut in the server market. This, however, could prove to be even more of a challenge than Thompson's other burning ambition - to qualify for the Rally of Great Britain in 2000 by completing eight rallies this year.
In his first four races, he has crashed twice and finished twice. If only it was all as simple as selling notebooks ...
Recovering from a bad dose of Asian flu
May 1998 - Toshiba celebrates its first year in the desktop market, but industry observers question whether the manufacturer has been successful.
August - The Japanese crisis hits Toshiba hard.
It barely breaks even in the financial year ended March 1998, making a dollars 5 million profit and sales of dollars 40.4 billion. Profit in 1997 was only dollars 540 million and sales were nearly dollars 44 billion.
February 1999 - Toshiba revises forecasts for its 1998 fiscal year, which will see the manufacturer making a loss for the first time since 1976.
For the year ended 31 March, Toshiba expects to report a net loss of Y20 billion, compared with the Y12 million net profit it predicted in October last year. Turnover has been revised from Y3.5 trillion to Y3.4 trillion, and operating profit is predicted to be Y5 billion compared with an expected Y40 billion. Toshiba enters the consumer market for the first time, using AMD's processors in its notebooks instead of Intel's. It launches a dedicated retail notebook which will be supplied by Dixons subsidiary, PC World.
March - Toshiba reveals a massive reorganisation of its worldwide operations in the face of falling profit and the continuing Asian economic crisis.
The vendor's 15 business groups are reduced to eight companies boasting more autonomy and full responsibility for development and financial performance.
Toshiba's PC and notebook business is now part of the Digital Media Equipment & Services Company. In addition to the structural changes, Toshiba's board of directors is slashed from 33 to 12, and the headcount at its corporate headquarters will be reduced from 700 to 300. No UK job cuts are expected.
Director of the PC division at Toshiba
Who was your first crush on?
Dusty Springfield - because of her mascara.
What did you want to be when you grew up?
A welder in a ship building yard, just like my dad.
What was the first record that you bought?
A Hard Day's Night by the Beatles.
Why did you join the IT industry?
I saw it as an exciting opportunity, though I initially took a pay cut after leaving my job as a metallurgist.
Do you have any regrets about that decision?
None at all - I love the high speed of it all. Other industries have many problems, but without some of the compensations.
Who do you admire most in the channel, except Bill Gates?
I don't admire Bill Gates. Probably the person I admire the most is Phillip Hulme, founder of Computacenter, for retaining his sense of normality as a family man in spite of his success.
If you weren't at Toshiba, what would you most like to do?
Be a full-time rally driver.
What is your biggest personal achievement to date?
A working marriage which is 25 years old next year, although my other half has contributed more.
And what do you hope to achieve?
Business success with integrity and to get a sense of fulfilment in what I have done.
What was the last CD you bought?
What is your favourite movie?
Return of the Pink Panther, starring Peter Sellers.
What is your favourite drink?
Calledonian 80 Shilling - real ale from Scotland.
What are you planning to do for the millennium celebrations?
Stay away from anything that can go wrong.
Where are you planning to go on holiday this year?
What do you hope to achieve with your motor racing?
Complete the Rally of GB in October/November 2000. This is the UK leg of the round-the-world rally championship and is the equivalent of the Silverstone Grand Prix in Formula One.
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