Twenty years into the personal computer revolution, the field is still exploding with rapid growth, increased demand for capacity and speed, more complexity, endless multiplication of the roles computers are expected to play in our lives and new ways to tap technology for everyday tasks.

Growth and change create an ever-increasing demand for speed and capacity, yet the industry that feeds us seems to be ahead of the demand curve again and again. Consumers and business users demand more at the same time as they feel pushed by manufacturers and engineers who design much more than most users can handle. These same manufacturers, who build equipment and programs to engineers’ perfectionist standards,often operate informally, tapping into the excitement and wonder of computers rather than enforcing rules or following institutional structures. In fact, the high-tech field requires managers who are very adaptable. Enter Alan F. Shugart. Sixty-six years young, he’s the hard driver who built Seagate Technology into the world’s leading disc-drive manufacturer, now closing on $9 billion in annual revenue.

Everyone knows what a disc drive is today. But how many people had heard of them in the 1950s, when Shugart, just out of college, was plugging away for Big Blue? “My first engineering design assignment at IBM was on the RAMAC, the first system using a disc drive. I never had time to learn anything else,” Shugart says.

But Shugart did learn at least one other thing, the key to Seagate’s success. “By the time I started Seagate in 1979 I had been working around computers and disc drives for over 25 years and had discovered one fundamental that transcends computer systems of any size.” His discovery? “A computer system’s appetite for capacity is insatiable.”

Shugart bet on this fundamental. But it took much more than a shrewd bet to turn startup Seagate into a success. To find out how Seagate operates, Selling Power talked to Al Shugart and Bernie Carballo, Seagate’s executive vice president for sales, marketing and product line management. We also spoke with Donnie Causey, Seagate’s automation director, about the sales tools that tie more than 100 sales reps in 14 countries into the customers and engineers that keep Seagate driving.

Speed, size and accuracy

Shugart’s initial market judgment was right on the money. “In late September 1979 the desktop computer market was growing like mad,” he remembers. “I knew it would continue, and there’s still a lot more growth ahead of us.”

The pace of change has not slackened. In just the past five years, the capacity required to support a fully equipped personal computer has increased from 80 to 4,000 megabytes – a 5,000 percent increase!”The disc drive is a critically important component of a customer’s system,” Bernie Carballo says, particularly to original equipment manufacturers (OEMs). “OEMs are very conscious of the vital importance of selecting a reliable product to satisfy their needs.”

Shugart and his engineers work hard to make Seagate the choice. The CEO meets frequently with both OEMs and distribution customers. He wants each customer “to make us an integrated participant in the detailed, long-term business plans of his or her company.” For OEMs, Shugart goes even further. He wants Seagate “to operate as an extension of the customer’s sales force.”

“We have engineering groups assigned to each of our major OEM customers,” Carballo says. “The field application engineers reside in the sales organization and work very closely with the sales force.” The sales chief calls this field staff “the single greatest element of differentiation between the support we provide OEM customers and that of our competition.”

Seagate doesn’t stop there. Three years prior to new-product launches, meetings begin with major OEMs, focusing on joint development of desired products.

After a mutually satisfactory design is chosen, production standards are critical. OEM customers will be “selling” Seagate products in their own equipment, often with warranties of reliable performance. Seagate’s drives are warrantied for 3 to 5 years and are supposed to work for 300,000 to 1 million hours (34 to 114 years). Tolerable error rates are about one ‘bit’ per billion billion bits.

Shugart calls this exacting standard “an exciting challenge.” It simply means each new disc “must be produced with greater levels of reliability and performance.”

Further, as storage size and performance improve, unit prices drop and lead times get shorter. Meeting competitors’ prices is often a requirement, even for the industry leader. Beating competitors’ delivery pace is expected of Seagate. “Being a time-to-market leader is essential,” Carballo emphasizes.

Sales and communication

Seagate meets these challenges by a three-pronged business strategy. Everything the disc maker does flows from this strategy. The approach boils down to, “Control the hard assets, and be smart with people and decisions.”

Shugart emphasizes tight control where it matters, owning leading-edge technologies and the factories that can deliver his discs on-time, on-budget and “on-spec.” Ownership can be expensive, and some companies pay for asset control with heavy debt burdens. Not Seagate. It counts on turning expensive assets into cash revenue, promptly. In other words, it counts on sales.

Communication is especially critical to the sales effort. Carballo calls communication his “most unique challenge.” Seagate salespeople need product and other information fast, and they need to get it in great detail. “Product specifications, transition schedules and lead times as well as such customer information as purchase order status, pricing, credit stability and shipment status are critical,” Carballo says. Disc industry and competitive information also help Seagate salespeople position their products.

Seagate automation chief Donnie Causey knows the need for fast information. He spent eight years as a sales rep himself. “I had that quota – the numbers are huge,” he remembers. “There are no low quotas at Seagate.”

Causey led the development of an information system called Sales Rep 2000 to meet sales-information needs and is expanding it into a broader, customer-oriented Web system.

Managing the process

Seagate’s sales reps must have a full set of sales and business skills. Carballo puts such personal attributes as communication, teamwork and fairness to colleagues very high on his list of selection criteria.

The reason is the disc-drive market. “In this industry, the most salient skill is the ability to manage processes,” Carballo says. “There is no such thing as a quick sale.” Rather, major sales represent “a whole process that results in the customer’s qualifying a drive and then successfully putting it into production. Every aspect of that process must be carefully managed and controlled.”

And the rep is the focal point of Seagate’s control effort. “The sales representative tends to be the team leader for the account ,” Carballo says. The rep must digest and act upon “a continuous flow of information between Seagate functions.”

Flexible methods aimed at tight goals are the rule here. “Each team has the freedom to establish its own coordination techniques,” Carballo says. “All of them track the necessary actions to qualify one of our products.”

During qualification, Seagate keeps an “action log database” for each OEM customer. Any team member can add to or update the log. Customers can also access the log. Reps must ensure the log is used for “action.”

Seagate recruits entry-level salespeople from colleges and universities. Recruits go through an intensive six-month training program, including assignment of a senior sales representative as personal mentor. This “Seagate University Program” combines sales training with cross-training in marketing, product line management and account management.

Senior sales reps are promoted from within the sales force or brought in from other Seagate staffs such as account managers, product line managers, sales trainers, applications engineers or marketers. Many of Seagate’s reps have been with the company since its inception in 1979. Carballo says the turnover rate is “very, very low.”Seagate now has sales offices in nine U.S. states and 13 different countries. Carballo says “global selling issues are typically not language and cultural. They are communications.”

Closing issues and getting paid

The overall objective of the new sales tool was simple. “Sales is about closing issues and getting paid,” Donnie Causey says. Enter “Sales Rep 2000.”

Causey began to develop the new communications tool two years ago. “We said, let’s buy notebooks for our eastern sales force.” Six months later, the equipment went to the West Coast. Seven months after that, Sales Rep 2000 rolled out to Europe and the Pacific Rim. “By October of 1996, we had notebooks in the hands of all our reps and sales managers, about 135-140 worldwide,” Causey notes.

The system’s first objective is simple, to “flow information seamlessly from point a to b,” Causey says. Most important, “we want to put in real data that drives the sales process.” So, although Sales Rep 2000 has presentations that can be downloaded, Causey and his team avoided overloading it with “a lot of statistics, product updates and launch information.”

Causey emphasizes the practical improvements Sales Rep 2000 has already made.

“A sales rep can click for online pricing for a distributor,” he says. “The old way was to fax 50 pages around the world. Now there is uniform distribution of pricing, everybody gets same information.”That is especially important because of rapid changes in disc prices. Typically new prices are approved on Saturday or over the weekend, before shipping. “Now it’s all online in one shot. That saves people a lot of time and stress.”

Sales Rep 2000 also makes sales forecast a breeze at Seagate. “You pick a customer on a screen and get a spreadsheet,” Causey explains. “Click on sales or unit requirements, then update with your latest estimates.” The immediate result? “You see the revenue change immediately. The old way was to punch in, request a report, run the numbers, put new ones in, then run again. The new way saves a couple of hours in forecasting.”

The system saves time back at headquarters as well. The reps’ entries become part of Seagate’s business plan. “These are the real numbers that go into our main database. It’s not play data, it’s real data,” Causey points out.

“Products change and are replaced every 6 to 12 months, no more than 18 months, in this business,” Causey says. So another very important 2000 feature is the ability of salespeople to monitor the transition of products through their life cycles. “You click on the product, you can see when it started, its production to date, and when it will go end-of-life and be replaced.” Sales reps can also see technical information on the product’s replacement and forecast production capacity. “We used to have eight to nine different spreadsheets to do all this,” Causey recalls.

Seagate trains reps on Sales Rep 2000 at three levels: beginning, intermediate and advanced. A total of 75 specific tasks were divided into these three categories. The tasks include working with e-mail, creating a word document, making a PowerPoint presentation and working with spreadsheets.

The training, like the system, is worldwide. Causey and two others did initial training with each rep in the local office. Then there was a further class, plus certification by local trainers.

On average, Causey and staff did about 12 hours of training per sales rep. Total initial training takes about 20 hours per sales rep. The local certifier/trainer does updates about two hours per week.

“We train to proficiency so they can get a handle on it, then make it easy by use,” Causey explains. “When we launch a new application, for example how to add forecast entries, we show mini movies that show the steps. They even have a voice recording of a training session.”

After that, there is what Causey calls “virtual training.” For example, “at 9 a.m. everybody in the Southeast region will be tied into our Web by their local network or modem so that we can show a new application on a conference server. It saves a lot of time, and reps can also tell us about problems with the system and what they want from it.”

Other methods of obtaining feedback include monthly meetings with certifiers to hear what reps are saying and having a 10-person task force on the system’s future drawn from distributor and OEM salespeople. “You can’t bring them in halfway through. They want to be a part of it,” Causey argues.

The future: customers and multimedia

The current version is just the “flagship” for further systems that will go way beyond sales reps, Causey predicts. Sales Support 2000 will facilitate account management, order management, working with factory liaisons and customer service. That will be hugely helpful because Seagate’s support staff is five times as big as the sales force.

But Customer Web 2000 is “where the system is really going to shine,” Causey believes. With passwords, customers will be able to query their own order and shipment status, obtaining serial numbers, warranties and marketing specifications direct from their Internet browsers.

Bringing customers inside the system meets two needs. “Customers are demanding it,” Causey says. “And it’s one more way to draw them closer to Seagate.” Instead of a sales rep making three calls over three days to resolve questions, “customers can just fire up their browsers. The data will come from Seagate. It will be the same data pool for us and our customers.” Causey expects to have Customer Web 2000 out well before the century’s turn.

Like Al Shugart, Causey sees computer capabilities continuing to explode. “By 2000 we hope to have full-blown data-sharing, customer and sales support,” he says. Customers will be able to go to a multimedia area on Seagate’s Web server, then “click, and they’re getting multimedia voice, animation, even a virtual tour of our factories.”

Keep on growing

Sophisticated communications systems are a necessity in Seagate’s business. Bernie Carballo says his biggest challenges as a manager are keeping up with technology changes and thinking “outside the box.”

Al Shugart sees a similar challenge – from the viewpoint of computer users – that Seagate must help to meet. “Our toughest hurdle is to make computers easier to use, removing the yoke of computer tyranny. Rather than requiring people to work like computers, the industry must make computers that work more like people.”

Of course, it does not hurt that people-friendly computers require much more memory and disc storage. Shugart thinks the future will see continued merger of communications and computers, “which should provide a basis for real growth in the home market.”

Shugart also predicts continued industry consolidation, with fewer computer and peripherals companies remaining. He thinks the surviving companies will be big and well financed, own their technology, have worldwide operations and sales, and be well managed. In short, “Seagate will be one of the survivors.”