Seagate Revisits Its History
Founders can leave an indelible mark on a companys business and technological direction. Just as important, they often shape the companys corporate culture.
When founders hang around the office, its easy to get a refresher course in the vision department; certainly, Bill Gates has had that effect at Microsoft.
Sometimes founders leave and then return, just as Steve Jobs did at Apple. He brought backto the dismay of manythe companys authentic but individualistic voice.
Most often, founders simply leave. Or get bought out. Then as the succeeding executive teams take charge, the company evolves, and the corporate memory can become selective. At times, they even rewrite the historical record.
I observed this latter happenstance in the storage industry last week, as Seagate returned to the ranks of publicly held companies with an $870 million initial public offering. The event brought the companythe largest manufacturer of hard drives$288 million before expenses, even while the $12 share price was discounted by a few bucks.
Of course, the big winners last week were the principals of the investment firms that bought Seagate a few years ago for reportedly about $2 a share. According to back-story reports, Seagate went private as a part of a convoluted deal during the spin-off of Veritas, Seagates former software wing.
Shortly before the sale, I perused the corporate fact sheet, which is chock-a-block with interesting factoids. For example, did you know that Seagate shipped 1.2 million 15K-rpm drives and 44.8 million "personal storage" drives last year?
And who wouldnt be impressed with a lengthy milestones page that includes some of Seagates many firsts to the market, such as a 15K-rpm spindle speed and drives sporting Fibre Channel interfaces?
Yet, as I scanned Seagates history and vision papers, I discovered a glaring omission. There was no mention of Al Shugart, Seagates co-founder and a major character of the computer industry.
For those few readers who arent familiar with his bona fides as a legend in the industry, Shugart helped produce the floppy drive as well as the first 5.25-inch hard drive used in personal computers. And he captained Seagate until his departure in 1998.
"The storage industry is full of characters, and it still is," said analyst Jim Porter, president of Disk/Trend.
Yet it took more than character to steer a company for almost two decades through the ups and downs of a cyclical business while keeping up the pace on the performance side of the market. In the mid-1980s, when hard disks became standard equipment on desktop computers, there were between 50 and 75 companies in the market.
Today, there are perhaps six or seven, depending on whos counting. Seagate survived, and much of the credit should be given to Shugarts leadership. (This is no knock to the current team, who have handled our current painful technology bubble and managed a downsizing while growing market share.)
According to Porter, the short product lifecycles of hard drives are brutal. "It takes a different kind of management to keep up with such a rate of change. Few companies can operate of such a time table," he said.
Shugart is such a character, often seen wearing an Hawaiian shirt to important events and speaking his mind about the industry and his other wide-ranging interests, usually to the dismay of the corporate handlers. So I discovered during my face-to-face meetings. You can catch some of the flavor of his intellect and outspoken nature from this Tech Museum interview.
The current Seagate management has steered a successful course since Shugarts departure, and during a market downturn. Maybe thats why they dont want to recognize "Uncle Al" at this time in the family album. Someone who runs his dog for a congressional seat still doesnt fit in with the new Seagate.
But we all know his imprint is still there.
David Morgenstern is a longtime watcher of the storage industry as well as a veteran of the dotcom boom in the storage-rich fields of professional content creation and digital video.