Foulds brothers make Christchurch hub of N.Z. micro group

Press, 2 September 1986, Page 31

Foulds brothers make Christchurch hub of N.Z. micro group

By

NEILL BIRSS

The new Businessworld headquarters at the hospital end of Oxford Terrace are another sign of the growth of the computer business in Christchurch. This contrasts with the decline of many of the city’s traditional industries. The Foulds brother — Bruce, Maurice, and Lester — have in a few years built a tiny, largely parttime, firm into a national group in microcomputers. Businessworld, Ltd, is an IBM dealer, and stocks Apple Macintoshes for the niche market of desktop publishing. It is also now in the minicomputer market, marketing the IBM System 36. Businessworld tends to cater more for small business than for the corporate market, where competition swarms. The new 2800 sq. m. (30,000 sq. ft) Businessworld building at the corner of Montreal street and Oxford Terrace is the centre for a group with outlets in Auckland, Hamilton, Hastings, Palmerston North, Masterton, Wellington, and Dunedin. More than 100 people work for the various Businessworlds.

This has sprung from a company set up in January, 1981, Small Business Software, by the Foulds brothers, at first with only one of them in it full time.

Two of the three Foulds have a strong marketing and business background, and the third, Lester, is a software specialist. (There are two other brothers: one is the head of the Christ’s College computer centre, the other is in the Inland Revenue Department.) Bruce Foulds spent almost nine years in Australia and Britain in computer marketing with Zerox. Earlier, he Had graduated from the University of Canterbury as a B. Com. In 1980, he decided to bring up his young family in New Zealand, bought a small property near Christchurch, and came home. Maurice, who had worked in mechanical engineering

and for five years distributed jetboat products in New South Wales, was back in Canterbury and owned a sawmill. Lester had just finished a degree in computer science at Canterbury. The brothers set up Small Business Software to take advantage of Lester’s skills. The idea was to provide business software for the Apple 11. At first it needed to support only him. Maurice had his sawmill, and Bruce with a relative had set up a legal services business, performing tasks such as search and registration for law firms, finance companies, and other clients.

“We perceived a need at that time for good applications software,”

Bruce said in an interview. “The only business software you could pick up for the Apple II was Visicalc, a marvellous product in those times.” But people wanted to do more than just use the spreadsheet of Visicalc, revolutionary though it was. In New Zealand, with its 40 per cent sales tax, microcomputers to pay their way had to be used for a wider range of purposes than in America. The Foulds produced a business system for the Apple II with debtors, creditors, general ledger, and payroll. They launched their software label, Context, with this product.

Bruce Foulds, fresh from the British computer

world, was keen to have the firm sell hardware.

.“We got the feeling we were doing all the hard work, the people riding on our back would sell the hardware and walk away with the biggest margain.”

The IBM PC had emerged as the industry standard in the United States, and was seeking distributor channels.

In October, 1982, Bruce Foulds had a note in his diary to telephone the Christchurch branch of IBM. The PC had not yet been released. He phoned Mr Brian Heald,* and found he had just returned from the airport with Mr Noel Cohen, of IBM in Wellington, who had come to Christchurch to discuss a dealer. From this chance call, the Foulds company, now of four (it had one nonfamily employee by now) became an IBM dealer. Maurice Foulds came into the firm full time, to use his engineering background to build up a service and support arm. But Bruce and Maurice still had to rely on thir outside interests for income. “If we had to live off the returns off this first business we would have been pretty hungry,” said Bruce Foulds. But it was building the foundations for subsequent rapid growth. “We went out and became the top IBM PC dealer in the country in 1983,” said Bruce Foulds. That year, at a meeting of PC dealers in Wellington, the idea of a national chain was promoted by IBM.

One emerged, the accounting firm, Peat, Marwick, Mitchell, providing the framework. The Businessworld chain was set up, Peat, Marwick, Mitchell taking 50 per cent in each instance with the local dealer owning the other half. The Foulds set up an Auckland branch to be the local partner there and in Christchurch. The other branches were at Wellington, Hamilton, and Dunedin.

The arrangement did

not succeed. Peat, Marwick, Mitchell, withdrew. Its place in Auckland and Christchurch was taken by Computer Consultants, Ltd (CCL). Bruce Foulds joined CCL as Christchurch manager. CCL wanted to forge a national dealer chain, but it, too, failed, and it was out of Businessworld by March this year. The Foulds, with Brian Heald, who is now group marketing manager, took full ownership of the Businessworld branches in Auckland and Christchurch.

The ownership structure is that the three Foulds and Brian Heald own Businessworld Computers, Ltd. This owns the regional Businessworld companies in Christchurch and Auckland. It is a shareholding partner with Businessworld outlets in Wellington, Palmerston North, and Masterton. Bu-

sinessworld Computers, Ltd, has a joint venture with the local IBM dealer in Hastings. It has formalised distributorship adn dealer agreements with the Businessworld outlets in Hamilton and Dunedin.

In all, the central company has distribution agreements with eight local Businessworld companies.

The benefits of having local equity is emphasised by Bruce Foulds. In at least one other attempt to set up a national companies computer chain, the central firm paid heavily for goodwill when it took over local shops, and this “walked out the door,” as former owners lost interest as employees, and left.

The organisation has been designed to ensure that control is not topdown only. There are executive committees that will have dealers flying in for regular meetings. The Foulds seek national success on the scale they have had with their Canterbury and Auckland companies. The Businessworld in Christchurch, for example, has more than 600 customers, and has had 100 per cent turnover growth a year. It has a staff of about 25. The firm sees Auckland as a good growth area, feeling that most of its rivals are aimed at the corporate market. Software development continues. The Context legal system has now been installed at more than 35 sites.

At the new headquarter it is still settling in time, with electricians completing their work, and some of the work still at the old building in Manchester Street, where there has been a sale of equipment and software from Businessworld branches. But already the growth plans are being mapped out.

8 local firms linked