There’s little sweet about Mr Sugar

Press, 20 October 1987, Page 28

There’s little sweet about Mr Sugar

Alan Michael Sugar, the head of Amstrad, talked to the press, the people he actively loathes. Gareth Powell was there among the loathees.

Sugar has spice, but he is not quite nice. At least this is the attitude of the computer journalists in Britain who have a fear and loathing of the immensely successful Alan Michael Sugar and his Amstrad computer which amounts, almost, to paranoia. In return, Sugar has much the same attitude tp the reptiles of the press. He says: ‘‘lt’s time to make an example of one of the computer industry rags. To make them grovel in print on the front page and apologise unreservedly to Amstrad for all the rumours in the past.” For example, in July a British major circulation newspaper, the “Mail on Sunday,” published an article to the effect that the PC 1512 was unreliable, could not handle leading software well and was selling at half Amstrad’s target level. Two weeks later a grovelling apology appeared. The part regarding the machine’s unreliability centred on a trade rumour that' the computer was prone to overheating because it had no fan. The fact that the Amstrad has its power supply — by far the greatest heat generator — built into the screen casing and not in the computer meant that, in fact, it could never overheat. Yet the story persisted and was later tracked down to sales persons for opposition machines who were stirring the pot like mad. Sugar retaliated by putting a totally unnecessary and superfluous fan into his machines and the rumours stopped. At the time, he said: "I’m realistic and we are a marketing organisation, so if it’s the difference between people buying the machine or not, I’ll stick a bloody fan in it. And if they say they want bright pink spots on it, I’ll do that too. What is the use of me banging my head against a brick wall and saying ‘You don’t need the dam fan, Sunshine’?” About the same time, a house magazine published a report that Amstrad computers had been found "electrically unsafe.” There was not a smidgen of truth in the rumour and, again, there were embarrassed apologies all round. But it is significant that such a story should ever appear. It gave rise to the suspicion that it had been planted by the opposition, although, in truth, this was not the case. Perhaps it is no wonder Alan Sugar is paranoid about the press. Everyone is, indeed, out there to get him. In the last few weeks, I have been told by journalists that Sugar is a “business thug,” whatever that may mean, and that he is never seen in public without two bodyguards. At the Computer Show in London this month, he appeared to launch his latest computer and give a reluctant press conference. No bodyguards were visible to the naked eye. Assiduous inquiries failed to reveal their identity. Perhaps they were having a smoko. There is not just a hate/hate relationship between Sugar and journalists. Professional share analysts working in the City of London are also not high on his list of favourite people. And in return, they love him not. About them he said: “There should be some professional exam for these analysts. Most of the time they talk through their backsides.” In response, they review each new financial year’s raised profits with faint praise and constantly wonder whether the shares are over-priced. Yet the same journalists, the same analysts, practically fawn over Sir Clive Sinclair who has exhibited the reverse Midas touch with products over the years. The same journalist who warned about Alan Sugar’s bodyguards positively simpered at the mention of Uncle Clive’s name.

“He’s just lovely” is not the sort of critical comment that you expect from an experienced journalist discussing a controversial figure. Why is this most successful of entrepreneurs so hated? Why do his cheap, cheerful and more-than-adequate machines create so much controversy? • One must take into account the tallpoppy syndrome which exists in Britain. In England, they say of Alan Sugar that “he’s -very clever.” Only in England can that remark be taken as an insult His success is oft referred to as “one of the genuine unsolved mysteries of the stockmarket.” He is successful and, therefore, suspect. • His looks do not help. With his scrubby beard and wrinkled face and desperate expression, he looks like the man who has come to repossess the television. • He has a habit of calling a spade a "bloody shovel.” He boasts, “PanAm takes good care of you. Marks and Spencer loves you. Securicor cares ... At Amstrad: We want your money.” • He is not of the ruling class. He is not your basic working-class yobbo either. But he is definitely not of the Establishment. People who come from Hackney in the East End of London are rarely considered natural members of the English aristocracy. • He hides not his light under a bushel. “While I’m alive and working, this company will never make a loss — and that’s a guarantee.” His company totally dominates the computer market in Britain and controls a substantial slice in Europe. True, in the United States it has not yet started to fly, and in Australia and New Zealand it is far from being the major player it is in the Old Dart. But each year its turnover continues to rocket, its profit climbs, its financial strength appears unassailable, it remains firmly at the top of the profitability league and is always in the top 10 growth companies. Amstrad has 1000 employees, and a market value of a billion pounds. This gives a market value/employee ratio of one million pounds with a small amount of loose change. Which is at least 30 times what would normally be expected of such a manufactur-ing-based company. Last year, there were 750,000 PCWB2S6/ 8512 models sold and 450,000 PCISI2S were sold between September of last year and June of this. Top, as they say, that. One of the reasons for Sugar’s success is that he reads the markets as others read a form guide; And his company is set up to take advantage of any change that the market suggests. If one aproach is not working, then Amstrad will change within weeks, sometimes within a day, to another

approach more in tune with market feeling. At the same time, it keeps its costs hammered to rock bottom by shopping for manufacturing facilities overseas with all the diligence of a purse-proud pensioner. The company is now working on a three-pronged market attack. The first Is to get the home computer buyer to take the IBM compatible Amstrad 1512 as the model of choice. Mr Sugar says: “The potential purchaser thinks to himself, ‘Well I remember the Sinclair I bought four or five years ago, which is now tucked under the bed somewhere. I bought it with a little bit of interest thinking that, maybe, I will use it myself.’ Well, they found out very quickly that it was totally useless, but by buying the 1512 is not really useless for the chap if he desires to take home some of his own work. So there’s another angle why the 1512 is poised in the home computer market.” It’s ‘worth noting that that is precisely the way that he speaks. No silver-tongued diplomat he. The second part of the marketing approach is to destroy, finally and utterly, the electric typewriter by providing a word processing system complete with a daisy wheel printer at a price which is an offer you cannot refuse. He describes this as “the final nail in the coffin of the typewriter.” He has his new markets clear in his mind. “The lawyers and the accountants who really love the idea of the PCW, but Who really couldn’t send their clients letters printed with the dot-matrix format.” Interesting that he is dealing again with what the market perceives it needs — and supplying it. The fact that it is easy to show that a high-quality dot matrix can produce the same quality as a daisy wheel worries him not. The market wants a daisy wheel printer. And that is what it shall have. At the right price. Third, he is providing a series of machines — he insists on calling them “boxes” — aimed specifically at the business market. He says they will be accepted in large corporations "by the sheer fact that the price of the product enables the user not to have to go to a board meeting to get permission to buy one.” In which surmise he is probably correct. He has cut back the price of the original PCWB2S6, the home machine of choice of most journalists on this newspaper, to a touch under $7OO (“We are now looking for the stingy”) and launched the new PCW 9512 which is designed primarily as an office machine but, again, at a startlingly low price. He has already declared the directions that Amstrad will follow. The directions established by IBM with its PS/2 and the Microsoft operating system OS/2. "They (IBM) have done us a great favour because we were wondering how and where to move in future,” Mr Sugar said. “Now we know what is likely to be the industry standard in 18 months.” And still, he is disliked by the press. In return he loathes them. This is not a love/ hate relationship in any way. The bile bubbles freely on both sides.