Conference hydra::amiga_v1

2385.0. "Max Toy Speaks in New Jersey" by LEVERS::PLOUFF (Semipro Semiologist) Tue Mar 21 1989 16:02

    Here's a report of Commodore CEO Max Toy's appearance before a users
    group in New Jersey.  Copied from Usenet with a few irrelevant lines
    edited out.
    
    Wes
    
>From: limonce@pilot.njin.net (Tom Limoncelli)
Newsgroups: comp.sys.amiga
Subject: Commodore CEO at JAUG meeting (LONG!)
Keywords: what happened... right from my notebook
Message-ID: <Mar.18.21.29.29.1989.5193@pilot.njin.net>
Date: 19 Mar 89 02:29:29 GMT
Organization: NJ InterCampus Network, New Brunswick, N.J.

Here's my account of what happened at the JAUG meeting last night. Someone
else posted about GVP's 68030 card.  I was really impressed; the price is
do-able.  Without 32-bit memory it was 4.5 TIMES faster than the Amiga
2000 (a 68020 card without 32-bit memory is usually SLOWER!), with 32-bit
memory it was 8 TIMES faster.  Pretty nice!  Yes, it has a hard drive
controller built in (special Quantum drive ONLY) but that makes the hard
drive controller a 32-bit controller!  (I want to get the reaction from my
IBM friends that love their 16-bit AT Controller :-).

[...]
What?  That wasn't the BIG news?  What are you talking about?  Oh!  You
must mean our *other* guest?  Yeah, ok.  Here it is:  ;-)

-----------------------cut here (ouch!)---------------------
I took a lot of notes at the JAUG meeting last night when Max Toy,
President of CBM USA spoke.  He was an excellent speaker.  He didn't
have any particular order to what he spoke about and I'm going to
basically re-count what I was able to write down in the order that he
mentioned it. Someone video taped the event.  Will that be available,
Eric?

(My comments are in []s.  Paraphrasing is done in ''s.  Real quotes are in
""s.  Everything is as complete and as accurate as my little fingers could
move my pen.  I disclaim any mistakes... Evil Elvis made me do it! This is
really long and there are bound to be many typos.)

He started out by giving us his private phone number (his direct line into
the company) and told us that he wants to hear from us.  He seems to be a
really hard working person and is really setting CBM on the right route. I
think that with his leadership Commodore (and the Amiga) will have a very
good future.

Max has been with CBM for 1.5 years (and had previously worked for
Compaq).

"Our greatest asset has always been the people that have supported the
Amiga... even when we didn't."

The problem with the Amiga started with it's introduction.  (which
happened a long time before he came to CBM).  Commodore had just lost 215
million dollars and wrote off a lot of warehouse junk.  In the middle of
all that, they tried to introduce a new line of computers.  They had
almost perfect plans but couldn't follow through on them because of the
stress they were under.

Most of their cash was coming in from the C-64 line, but that was
declining.  (BTW, now the C-64 line is on the *rise* and they plan on
selling 2-3 million of them this year.  Also, that makes them the "largest
microcomputer [vender] in the world."

The Amiga line is also on the rise (as we all know).  Commodore "will ship
our 1 millionth Amiga about Tuesday of next week".  This is significant
because many companies will not develop software until the 1 million mark
is reached.  He also noted that they are planning on a big press to-do in
about a month all about their millionth Amiga (not on Tuesday... they need
more time to plan and make it a "media event").  He also emphasised that
most computer companies can't say that they've sold one million
*anything*.

He noted that Apple sold their 1 millionth Macintosh last year.  [That
implies that Amiga accellerated faster]

He took some time to thank the third part people (software, hardware, etc)
that support the Amiga.  He noted that they count 2200 titles available
for the Amiga.

MS-DOS news:  The initial reaction to their MS-DOS line was unbelievably
good.  Therefore they are going to support a complete line of that BUT
they will continue the Amiga and & C-64 market.

Another successful change:  He noted that production of new third-party
and CBM periferals almost completely stopped at one time... he has made
that change.

He spoke a little about the fact that more and more people are using
Amigas.  He mentioned a number of companies and included DEC, IBM and
Apple.  paraphrased: 'Of course Apple!  They use Amiga's in their
presentation area.'  (that got a lot of laughs) Stanford Linear
Accelerator only has 3 approved computers (I think he meant micros) and
the Amiga is one of them. I can't remember the other companies that he
mentioned, but he said that many airports with the fancy displays "that
tell you about the flight that you just missed" :-) are using Amigas (and
more will very soon)

60% of Commodore's revenue comes from Europe even though the USA has the
second largest market (I guess he's talking about population) BUT in
America people are more "upscale and sophisticated".  For example, the US
sells mostly Amiga 2000s and in Europe mostly Amiga 500s are sold.

Within the next year he predicted that there would be a sudden large
growth of business software.  Business graphics is one area to watch.  He
also suggested [as if he knows the programmers doing it or something :-)]
that there is going to be a growth in your basic business software (i.e.
you can't buy an Amiga for business right now because there isn't any good
accounting/spreadsheet/etc software... this will be changing).

They have started a new distribution system.  They have 1700 dealers and
CBM wants them all well trained.  Next week Computer Factory will start
carrying Commodore MS-DOS computers (and slowly introduce the Amiga line).

He started talking about financial things.  He said that as far as
"Business and General Business"... "the company is strong".  They are up
$1.5 per share this year.  Commodore is actually *investing* again!  They
also have *cash* now!

The ol' complaint department:  They get 5,000 phone calls per day.  They
have set up a better organized system for that but what he really wants to
do now is reduce the number of calls.  (I.e. if 90% of your calls are the
same 5 questions he wants to get those 5 problems solved).  He also will
be putting more people in support.

Repair support:  18 months ago there was a 9 month backlog on parts.  That
is now been fixed.  [Fixed?  I'd say "reduced".  I know there are still
some problems there... but it is getting better. -Tom] He made an
interesting point.  He also wants the repair centers to be strong.  Some
of the "The place doing my repair can't get parts" complaints were
actually about places that hadn't paid their bills.

Ooops.  Correction.  It was now that he gave us his direct phone number.
He stated that he has a habit of sitting at his office from 6-9 PM making
phone calls to customers and user groups and companies.  He told an
interesting story that on his first day he asked for one of every computer
they sell in its packaging just like they sell it.  He opened each one and
installed each one.  paraphrased: 'it was one of the biggest learning
experiences in my life'.  He also requested the complaints file and
started reading through them.

On his third day he called a person in Atlanta named "Eric" who had
written a letter to "President Max Toy".  He figured that this guy must be
a real big fan because he was only in office THREE days and this guy
addressed a letter to HIM.  Well, it turned out this person was a 10-year
old.  Eric was *very* nervous but eventually told Max all about about how
he loves his C-64, and how all his friends use them.  Max was amazed at
how much this little kid loved the computer and did so much with it.
(Awwwwww :-). Anyway, (paraphrased) 'Eric then proceeded to tell me
explicitly and exactly what he should do to make Commodore a better
company'  (pause) 'and you know what?  He was exactly right.'  Basically
Eric told him that what makes Commodore so great is the non-Commodore
people that stand behind them.  All the user groups, net.people, etc.

Max said that he likes talking to his customers and he *loves* to get
ideas from them.  He also encouraged people to call him at his direct line
when they felt they needed to.  [Personal comment: This guy knows his
st*ff and I'm *very* happy to have him in charge now]

Then he started to take questions.  If he couldn't answer it, he took the
people's names & phone numbers and promised to get back to them or have a
technician get back to him.  He also made sure that everyone understood
that he couldn't pre-announce things.  [I was happy to see that nobody
rudely asked him to make predictions about major things after that warning.]

Question:  Since the US is a smaller market than Europe, how does that
affect future R&D investments?"
 o  US is still the 2nd largest as far as sales but the 1st largest
market.  In the long term CBM will be looking forward to the Pacific Rim &
the People's Republic of China).  In the short term, CBM will be aggressive
as far as storage capabilities and connectivity.  (Expect high end *AND*
low end networking solutions in the next year).  Also, the US is richer in
business products than in Europe.

Question:  How will you penetrate the business sector?
 o  He admitted that CBM has done a bad job so far.
 o  The 1988 annual report stated that North America lost 23 million
dollars.  In the future they plan on spending money where leverage is the
best.  (more on that later).
 o  Before, Commodore had no direction in their marketing [Remember when
someone said that their marketing strategy was "Ready!  Shoot!  Aim!"?]
and had not identified any markets to target.  Now they have
identified markets that they will be aiming at.  First of all, they are aimed
at the video market and has seminars using huge (lavish?) Amiga systems to
show off things really being done.  In the seminar you learn how to do it
with the Amiga and why only the Amiga makes it possible.
 o  What he meant by leverage was that if the big people use the Amiga, word
will spread.  For example, all the preliminary work for "Roger Rabbit" was done
on Amigas.  The title work for "3 Men & A Baby" was done with an Amiga.
The people that did those projects will now want to use Amigas on their
future projects and word will spread.  If you consider that those people
also split up and do many, many projects word spreads faster.  "now
Hollywood is talking".  Pepsi is using Amigas to do 100% of their
prototyping.  They can't risk going into production of an advertisement
without knowing every detail FIRST.  Only the Amiga lets them do that.
 o  Commodore's advertising will be solution oriented from now on.  This
means you will see advertisements in (my example) a marketing trade
journal with specific solutions to marketing applications.
 o  Next week for the first time in years Commodore will start advertising in
The Wallstreet Journal again!
 o  Boeing Aircraft one year ago *wouldn't* talk to Commodore.  This year
they called Max!

Question:  Does Commodore plan on running a BBS?
 o  They considered it.  They feel that the support that they do on QLink,
Usenet, Bix and CompuServe, etc is enough and are still considering it but
it is not a priority.  [Actually, it was Eric that jumped in and mentioned
BIX and Usenet]

Question:  "How will connectivity be done?  Are you going to use AppleTalk?"
Answer:  [long pause followed by a grin] "That sounds like a nice idea!"

Question:  Student discount plans in the works?  What about the
educational market place?
 o  Back when CBM went through tough times they couldn't.  At that time
others stuck in and they aren't in business any more.  He was very glad to
say that as of Jan '88 they reentered it.  (They are still #2 in
education).  He said that it takes about 1.5 years to start seeing good
educational software.  In the future they will "make it easier for
students" to own Amigas.
 o  For higher education, expect connectivity (cheapo and high-end), Unix,
in-house and third party support.
 o The "Teacher of the year award"'s prize is a IBM PS/2 Model 25 [Ugh!
Completely useless! IBM could afford something a little nicer considering
all the hype they make about donating the prize!]  Of course, she
won a prize for the innovative things that she did on her... (you guessed
it) Amiga!
 o  Commodore has reinstated their "Teacher Councel" which includes all
levels of teachers (early learning to college).  ...and the "Teacher of
the year" is on that councel!

Question:  What opportunity's for CBM stock should we expect?  What does
it mean?
 o  Some info about the fact that CBM stock has been doing well recently
and something about what it did today (3/18/89)
 o  He came on the job 3 days after the crash!
 o  1 year ago -- 8x earnings [I'm not sure what that means]
 o         now -- 11x earnings
 o  Prediction -- "two ten or two twenty by the end of this year"  (I
assumed he meant $21.0 - $22.0 per share???)
 o  Now that their stock is doing so well, Computer Factory called THEM.
 o  "Music is going to be an important market" ... and they'll be taking
the Mac head-on.

Question:  Any possibility of an extended warrentee or dealer-extended?
 o  No plans.  They have examined it and should be doing a
dealer-extended plan.  They really want to get all their dealers up to
par first.

Question:  What about AT&T's new TARGA board for the Amiga?
 o  "You'll have to talk to AT&T"  [ Is there such a thing?  Was this guy
talking about a rumor?  I know someone is working on a TARGA board
*something* but was it AT&T?]

Question:  What do you do about pro-Mac salespeople that also carry the
Amiga and push customers away from the Amiga?
 o  He had a good idea:  He wants to make sure that every dealer has one
super-Amiga-salesperson.  The gist was that if one person can
go home with a nice commission check every week then the other salespeople
will want to do it too.  He also wants to make sure the technical support
of each site is really strong so that the salesperson can rely on them.

Question:  What are you doing to encourage software support?
 o  There are three things you can do.
 o  1--The most important thing that can be done is to sell one million
Amigas.  He implied that after this is reached (next Tuesday) we should
expect some major announcements from some big places.  [The last time
anyone said that WordPerfect introduced WP!]
 o  2--Make sure that the software support is there.  He mentioned that a
lot of people won't do development if there isn't anything like CATS.
 o  3--Just ask them.  Simple as that.  Some companies just haven't heard
of the Amiga and he said that sometimes you have to just get on a plane,
go to them, and ask them.
 o  He told "The Perfect Story" [WordPerfect] about how some real
Amiga-fan at WordPerfect did a prototype and management liked it and
*then* decided to look into the Amiga!  From the release of
AmigaWordPerfect it only took SEVEN DAYS to break even!
 o  He also mentioned that they have re-started the developers
meetings (DevCon).

Question:  When I show someone my Amiga I often talk them into buying one.
How could you encourage that?
 o  The Partner's Program was successful but next time they will implement
it MUCH better.

Question:  When will Commodore offer more serial and parrallel ports?
 o  "That's a good idea [grin] [pause...] Next question?"

Question:  What about "popular advertising"?  (meaning network TV and
national TV)
 o  No.  Print has longer life, you can put more information in it, you can
attack a specific market effectively.  Things will be primarily print.

Question:  What about CDI and DVI?
 o  'Yes.  Next question?'

Question:  BridgeBoard is too expensive to expect a business to buy it
just to justify the purchase of an Amiga.  Any other plans?
 o  He said how he things that MS-DOS has to be a hardware solution.  The
Transformer isn't too great.  (Though, they keep looking into other
software solutions)
 o  Their research shows that MS-DOS use on Amigas is *incidental* use.
But if they try to compete by offering MS-DOS in the Amiga, people ignore
the Amiga. So... the solution is to have the Amiga do the same things with
similar (equally good) software running under AmigaDOS.

Question:  What to do about recognition?  Nobody knows who CBM is.
 o  Agreed.  He wants to influence the people that influence the industry.
 o  (Example) When he worked for Compaq, they made sure that when
big companies like Ashton-Tate gave huge mega-presentations they did it on
Compaq equipment.  They also made sure that big accounting firms who were
telling their clients "this is the software we require you to use" they
were showing it on Compaqs.
 o  Now he wants to make sure the the big leverage people use Amigas.
 o  Example:  Pepsi previews all advertisements (video & print) on Amigas.
A lot of people look at how Pepsi does things for solutions.

Question:  Most of the effort is in the A2000!  What about the A500?
 o  It was designed with cost in mind [And almost nothing else :^) -Tom]
 o  It will be supported.  [Software can't help but be compatible, eh? -Tom]
 o  The A590 (2meg ram and 20 meg HD) is shipping NOW.

Question:  What about advertisements on radio?
 o  No.  The Amiga is so visual words can't describe it.  Their tests have
not shown good results.

Question:  What about High Definition TV (HDTV)?
 o  I like it... "maybe we'll even be part of it as a country!" :-) :-)
 o  We are "not actively involved in the standardization" but we are
following it.

Question:  Will Commodore try to compete with Sun?
 o  "I believe that Commodore has tremendous opportunity to be *the* low
end workstation"

Question:  Name the vertical markets that you plan to attack.
 o  No.  We are hitting vertical *applications* and affect *many* markets.
 o  Concentration is on revenue-side solutions.  In tough times companies
spend on revenue generators so we want to supply revenue generating
solutions.
 o  Women are a big potential market.

Question:  Will Commodore make their own color printer?
 o  "That's a good idea."
 o  More likely, other companies have great printer technology and we want
to make solutions that include their printers.
 o  (Small tangent about the current and near-future printer technology
that he thinks should really make the US Treasury *very* worried)

Closing:  He wants us all to know that dealer training has been improved
and repair center training is improving.  He wants us to keep up the good
work.  "You measure us not by what we *plan* to do, but by what we *have*
done!"  'Watch us.'

-----------------------------cut here------------------
Well, I feel like I should make some grand unifying statement about the
whole event but I'm too tired from typing this all in.  Over all, I'd say
that this was the best JAUG meeting in the last 12 months.  Thanks should
go to all the guests, Eric, and all the other people that put it together.
Great job!

-Tom

P.S.  So, what do you plan for next month?
-- 
 Tom Limoncelli -- tlimonce@drunivac.Bitnet -- limonce@pilot.njin.net
            Drew University -- Madison, NJ -- 201-408-5389
Standard
Disclaim
er.