Al Shugart Essay, Research Paper

Al Shugart

Overview

Al

Shugart is a co-founder of Seagate Technology, Inc., and is now Chairman

of the Board, President, and CEO of the company, which is the largest

independent hard-drive manufacturer in the world.

Born in Los Angeles, California in 1930, Alan F. Shugart received his

Bachelor of Science degree in Engineering and Physics from the University

of Redlands in 1951.

He immediately went to work for IBM as a field engineer, and over the

next 18 years managed development programs for IBM, including the development

of the first rigid disc drive. In 1969 he moved to Memorex, where he served

as Vice-president of Product Development until 1973.

In 1973, he formed Shugart Associates, Inc., a floppy-disk drive manufacturing

company. "We didn’t have a clue about starting our own business,"

he later said after being fired by the venture capitalists who had put

up the money to start the business. Over the next six years, Shugart was

unemployed, worked as a consultant, bought a bar, and became a commercial

fisherman.

In 1978, Apple Computers had become the first PC manufacturer to include

a floppy-disc drive in their PCs, and in 1979 VisisCalc would prove that

the PC could be a serious business tool. In 1979, at a time when personal

computers were about to become more than toys, Shugart and Finis Conner

opened the doors of Shugart Technology. In 1980, Shugart Technology became

the first manufacturer to introduce a hard drive that could fit into the

5.25-inch space used by the state-of-the-art floppy drives.

Shugart Technology counted IBM among its early customers, but in 1985,

IBM stopped buying disk drives from the company, which had changed its

name to Seagate Technology, Inc. With the loss of IBM, the fledgling company

lost almost half of its business and nearly folded.

Also in 1985, Finis Conner and Al Shugart had a difference of opinion

that caused Conner to leave Seagate. In 1986, Conner Peripherals opened

its doors and became Seagate’s number one competitor, a fiery rivalry

that would continue until 1996.

Over the next few years, Seagate and Conner Peripherals leap-frogged

each other as they developed advanced hard-disk drives and fought off

a decreasing number of competitors.

In 1991, David T. Mitchell, one of the co-founders of Seagate with Shugart

and Conner, resigned as President and CEO of Seagate. Rather than replace

Mitchell, Al Shugart assumed the vacant positions and temporarily dropped

out as Chairman of the Board. Shugart changed the company’s focus from

market share and cost to making Seagate the first to bring leading-edge

technology to the marketplace, a direction that took advantage of Seagate’s

vertical integration. Seagate manufactures its own recording heads, discs,

substrates, motors, and custom integrated circuits, unlike many of its

competitors, which purchase components from other manufacturers.

As part of his effort to diversify the company, Shugart began searching

out other hardware and software companies that would complement Seagate.

With purchases of software development companies such as Crystal of Canada,

Palindrome, Dragon Systems, Frye Computer Systems, and Holistic Systems,

Ltd., Seagate moved into businesses that could allow it to bundle data

management software with its disk drives.

In 1996, however, Seagate surprized everyone by purchasing its most formidable

competitor, Conner Peripherals, for $1.1 billion in stock. That move alone

made Seagate the single largest independent disk-drive manufacturer in

the world. Within a month of buying Conner, Seagate sold off the Conner

Storage Systems Group to nStor Corporation, a producer of disk array products

used in data networks.

With the purchase of Conner Peripherals, Seagate became a $7 billion

company with control of more than 30 percent of the independent disk-drive

market, which provides drives to companies like Compaq, Dell, and others

who do not manufacture their own drives. Independent drive manufacturers

also sell directly to the retail market as people upgrade their PC’s storage

capacity to meet the new demands of graphics, Internet downloads, and

expanded software capabilities.

But in addition to being the captain of the largest disk-drive company

in the world, Al Shugart has another side; a side that may reveal more

about him personally than his success in the volatile world of computers.

In 1996, Shugart got actively involved in politics as a way of fighting

politicians. "We have the only legal system in the world where lawyers

dominate the legislature, judiciary, and executive branch. We have to

throw the bums out," he said. Shugart’s methods, however, seem a

bit odd. He is funding a campaign for the Congressional seat in California’s

17th District. His candidate is a Bernese Mountain dog named Ernest whose

campaign treasurer is a Basset Hound named Calvin.

"This is my way of protesting how politicians and lawyers have really

screwed up our government, which is stifling productivity, economic growth,

and employment," said Shugart. In addition to backing his protest

political candidate, Shugart has thrown his support behind a series of

measures in California to reduce litigation. That has caused opponents

to compare him to Charles Keating, the man convicted in the Lincoln Savings

and Loan case of swindling people out of their life savings.

Al Shugart and Seagate have been able to survive, while hundreds of other

innovative executives and companies have collapsed under the pressure

to stay on top of the industry and maintain their balance in the shifting

sands of computer technology. A true pioneer of the industry, Al Shugart

continues to press forward.

Sources

Biography

and Genealogy Index

Brooks,

Nancy Rivera; "Rival Disk Drive Makers Seagate, Conner Agree

to $1 Billion Merger"; Los Angeles Times; Times Mirror

Company; September 21, 1995

Business

Wire; June 19, 1996

Deagon,

Brian; "Seagate’s Al Shugart – Top Dog in Disk Drives now takes

on the Litigators"; Investors Business Daily; May 3, 1996

England,

Robert Stowe; "Contempt of Facts"; Investors Business

Daily; March 25, 1996

England,

Robert Stowe; "Fake Consumer Advocates?"; Investors Business

Daily; March 3, 1996

Management

Profiles; Seagate Corporate Information

"Overview

of Seagate Technology"; Seagate Technology, Inc.

Schmitt,

Richard B.; "Seagate Technology’s Mitchell Resigns as Board Decides

to Shift Management"; Wall Street Journal; September 23,

1991

Shaw,

Russell; "Get Out the Checkbook, Al"; Financial World;

November 21, 1995

"Software

giant in the making"; http://gpg.com

Spiegelman,

Lisa L.; "What’s Behind Seagate’s Drive Into New Lines?";

Investors Business Daily; June 29, 1996

McCoy,

Charles; "Seagate to Acquire Conner in $1.04 Billion Stock Swap";

Wall Street Journal; September 21, 1995