Xref: utzoo comp.protocols.tcp-ip:14755 comp.unix.sysv386:4594 comp.unix.xenix.sco:1597 Path: utzoo!utgpu!news-server.csri.toronto.edu!bonnie.concordia.ca!uunet!wuarchive!sdd.hp.com!caen!news.cs.indiana.edu!msi.umn.edu!noc.MR.NET!ns!gumby!robp From: robp@gumby.network.com (Rob Peglar) Newsgroups: comp.protocols.tcp-ip,comp.unix.sysv386,comp.unix.xenix.sco Subject: Re: Comtrol Summary: sigh Message-ID: <1991Feb5.152919.7614@ns.network.com> Date: 5 Feb 91 15:29:19 GMT References: <9101272223.AA08327@desktalk.com> <6207@rsiatl.Dixie.Com> <1991Feb3.053341.5064@tcsc3b2.tcsc.com> Sender: news@ns.network.com Followup-To: poster Organization: Network Systems Corporation Lines: 243 Nntp-Posting-Host: gumby I am posting this as a warning to those of you who previously have or are considering purchasing products from Comtrol Corporation. This article is being cross-posted. The entire article represents the opinion of the author only and not any other person or organization. If you don't know about the multiport serial market and/or Comtrol, just hit "n" now. This is a very sad story. The year 1990 was a very tumultuous one for Comtrol. When I began 1990, taking the position of Manager, Software R&D, things weren't looking so good. I had four programmers and two tech support people working for me, and while their work was quite good, the overall perception of the company was, as our customers and competitors put it, "asleep at the wheel". And so it was; Comtrol's sales were far and away based on very old, non-intelligent (aka dumb) product; although Comtrol had one (the Smart Hostess line) intelligent product, the competition had, by far, the lion's share of the intelligent market. (note, the Ultra 186 was considered part of the Smart Hostess line, and was in the process of being phased out by the (then unavailable) Ultra 8/16) At that time, Comtrol was around 35 people. It was fairly profitable, since it tended to preserve 60% gross margins as a business priority. However, the competition was overwhelming Comtrol in terms of market share; while the pie was growing bigger, Comtrol was not growing as fast as the stockholders would like. So, the board decided to make two things happen (at once); grow the R&D staff, to design and deliver new products during 1990, and also concentrate on (hopefully) growing the international market by opening offices in Europe, using local (European) personnel. Comtrol had previously controlled all international operations from St. Paul. (in case you're confused by the terminology, Comtrol is privately held; the stockholders and the board are one and the same family) The first strategy, upgrade products/services, worked very well during 1990. In software, I added three programmers (net), and one tech support person. Thus, by August, Comtrol had seven programmers and two tech support people. The hardware R&D group added three engineers and one lab technician. Customers and competitors had noticed the new products (e.g. Ultra 8/16, Multivision, etc.etc.) hitting the market; and here's a testimonial from a real live UseNetter (John DeArmond) about Comtrol service. --cut-- From ns!noc.MR.NET!msi.umn.edu!umeecs!umich!ox.com!caen!sol.ctr.columbia.edu!emory!rsiatl!jgd Tue Jan 29 12:53:13 CST 1991 Article 7341 of comp.protocols.tcp-ip: Path: ns!noc.MR.NET!msi.umn.edu!umeecs!umich!ox.com!caen!sol.ctr.columbia.edu!emory!rsiatl!jgd >From: jgd@Dixie.Com (John G. DeArmond) Newsgroups: comp.protocols.tcp-ip Subject: Re: copy protection Message-ID: <6207@rsiatl.Dixie.Com> Date: 29 Jan 91 09:04:38 GMT References: <9101272223.AA08327@desktalk.com> Organization: Rapid Deployment Systems (making go-fast things and things that-go fast) Lines: 190 (lots of copy-protection argument stuff deleted) Customer Service will make or break your product. You'd damn well better plan for it as an integral feature of your product, fully as important as the software not crashing. Here's an example of how to and how not to do customer support. I have used 2 brands of intelligent async cards in Unix systems for my customers. One brand is Comtrol and the other is Stargate. I no longer use Stargate because of customer support. When I opened the first Comtrol box, the first thing I saw was a plastic gold card just like a credit card. On this card was printed the 800 toll free support number AND the names and direct dial numbers for the General Manager, the Engineering Manager, the Hardware Tech Support manager, the Software Tech Support manager, the Production manager, the Marketing manager and the Sales manager. Above this list of numbers is this statement: "Our committment to you doesn't stop with our products. We give you the support and the extra service you want. IT's because your satisfaction is our #1 priority. COMTROL is only a phone call away. You have full access to all COMTROL personnel. For your convenience, primary department contacts are listed below:" I've had one occasion to use the support number. A board arrived one evening DOA. I called just at closing time. COMTROL had someone drive a board down to Delta DASH and I got it in a few hours. They told me to return the DOA one when convenient and not to worry about shipping back the (very good) documentation. My Stargate experience was a bit different. I inherited my first card in some surplus stock I bought. The card uses address decode PALs that are specific for each OS. My card was equipped for Xenix and I needed a PAL for ISC Unix. I called up Stargate and reached a rather sullen tech support technician. I was told that a new PAL cost $150!!! I passed on the PAL and obtained one from a friend but ordered a driver disk for ISC. When it got here, it was accompanied by some Nth-generation xeroxed dot-matrix printed documentation that was practically unreadable and it would not install. It did not meet the specifications of ISC's installpkg facility. I copied the disk onto the system and installed it manually. Later, I needed to get an upgraded driver for a new version of the OS. I called Stargate for the upgrade, somewhat expecting to pay for it. I was told that I would either have to write (!) to the sales department who would investigate me as a customer and if I passed, would give me the secret password to their BBS where I could download the upgrade. Or I could write and include some money and get a disk. Write a letter in order to access a BBS indeed! Could they have been afraid that I had wirewrapped a board in my basement and wanted to steal the driver to make it work? Who knows. Now both boards work pretty well equally. But I'll never fool with Stargate again while I recommend COMTROL whenever the opportunity arises. The difference is service. I perceived a better value from COMTROL even though it cost more. (more deletions) -- John De Armond, WD4OQC | "Purveyors of speed to the Trade" (tm) Rapid Deployment System, Inc. | Home of the Nidgets (tm) Marietta, Ga | {emory,uunet}!rsiatl!jgd |"Politically InCorrect.. And damn proud of it --cut-- Well. As I said, the first strategy was working out. However - the second was not, and between it and one heckuva bad decision by the GM of Comtrol during the spring of 1990 led Comtrol on an ugly downward balance sheet spiral. The Europe strategy was a complete fiasco. In terms of sales, the sales numbers were almost dead flat from the international sector, while the expenses increased by two orders of magnitude. Despite the board's insistent cry that "it's good, don't worry, it will be just peachy in long run" the balance sheet was overwhelmed by the cash flowing out of the company. The board turned a blind eye toward this, prefering to think that somehow, a miracle would turn it around. In fact, things just got worse. The GM was replaced in July, but that was too late. It's hard to perform major surgery when you cannot stop the flow of blood from the patient. As the European office took more and more cash out - in fact, the office space alone for the eight employees there was larger than the space for the entire US operation ! - and the marketing expenses went through the roof - and the vendors got stretched out to 90, 100, 120, >120 days - and the credit holds started appearing - and the line of bank credit was maxed out - and on and on. It was the classic snowball effect. Are you getting the picture? Comtrol was going through the classic small business phenomenon of having increased sales (around 10 percent overall CY 1990) and going nearly bankrupt at the same time. The bad decision in spring 1990 was to order and build up a huge (2 times more than Comtrol had ever spent in one month) product inventory, hoping that sales would magically take off in 2H90. The former GM failed to realize that the summer is just the wrong time to rely on increased sales, especially when you've only got three salesmen. (US) Well, the cash out was heavy. The products built in the spring did not sell (as fast as wanted). Inventory carrying costs became a burden. Most US and international distributors took a "wait-and-see" attitude, preferring to take normal quantities of dumb and/or Smart Hostess product. Cash flew out the door as marketing bonanzas (like exhibition at Comdex) and $150/night Las Vegas hotel rooms took their toll. All the while, R&D costs were held steady as a percentage of net sales, +- <5 percent. Even though the company was running in the red - bigtime - since July, the board continued taking cash out of the company in the form of "contributions" at the same pace that they always had. So, in late November 1990, in a classic, uncreative, knee-jerk, Control Data-type reaction, the board forced the GM to "eliminate positions" (the phrase that was used on me), a.k.a. chop heads. Of course, the R&D groups were hit hardest; no marketing heads rolled. Although never stated, the board clearly took the tactic of eliminating senior (read: decently paid) people. Three hardware people were gone. One SW person (the most senior in terms of career) was axed; three more (SW) were transferred to different divisions; the entire production group, whose only flaw was obeying orders, was dismissed; one (of the two) tech support people was booted. In all, around 15 people (out of 55) were chopped. Ironically, these changes leave Comtrol almost exactly where it was to start 1990, as we start 1991. Thus, a whole years' work was discarded. Sure, the new products are "there" - but there is hardly anyone left to continue. In no way can the current staff maintain the 1990 pace. Comtrol is certain to revert back to its "sleepy" posture in the market. The R&D engine was gutted. To continue the automobile analogy, the car is now coasting. 1990's rapid acceleration is now lost; the car will slow down. It may take a few months, but it is inevitable. Comtrol is still in the red, according to internal sources. The board lacks either the foresight, gumption, or ability to raise the necessary working capital from either themselves, a public equity or debt offering, or third-party financing. Without these sources of working capital - the banks are now quite wary (side story - the bankers were in the building on November 26, 1990 "Black Monday". anytime you see the bankers in on such a day, it is not a good thing) - Comtrol cannot continue to provide the level of products and services that Mr. DeArmond came to know and enjoy. To use a well-worn cliche, "the party's over" for Comtrol. From a customer point of view, I would heartily recommend products and services from either DigiBoard, Equinox, or (esp. internationally) Specialix Ltd. All have proven themselves to have directors that realize the value of employees and know how to run a business. In fact, Digi stock has recently soared; they are splitting 2 for 1 (in the form of a dividend); their revenues are up 71 % for the most recent FY quarter relative to last years' same quarter. There is talk of Digi buying Arnet. This is not an accident. People like Gene Olson at Digi, John Pettit at Specialix, and Craig "Wolf" Kozel at Equinox are fine people. They won't steer you wrong. In contrast, hear a (paraphrased) quote from a current Comtrol employee about the Comtrol GM: "every time I talk to (him/her), I feel like I'm getting the big run- around". If this happens with employees, what about you, the customer? Don't get me wrong, now. The people that are left, for the most part, at Comtrol are wonderful. I especially want to tribute the remaining engineering people - both HW and SW - as their work is top shelf. There just isn't enough of them now to maintain what was, what is, and what should be. The tech support is one person. The people that Mr. DeArmond mentioned in his testimonial - the "gold card" people - are for the most part now gone. Five out of the seven. A HW engineer is trying to manage the SW group. The entire production load has been transferred to Artist Graphics, where one can only assume that Comtrol product will get not just second, but Nth banana. All in all, it is a true shame. Now, if you are lucky enough to enjoy the tradition of superior Comtrol service, now and in the future, terrific. I am quite happy for you. I am only saying that the probability of such service is rapidly diminishing. Moral? When business turns south - and expenses rise - act immediately. Use your people creatively. People are not one-dimensional. Engineers can be great salesmen. If what you need is increased sales, make everyone a salesman. Flexible organizations can always survive business downturns - if the board has the fortitude and foresight to let change occur. Chopping 30% of your payroll does not solve the problem when the payroll is only 30% of the problem. Go after the 70% first - like high inventory, slow sales, super- fluous plant, offices, and equipment, unnecessary marketing campaigns. Find the necessary working capital to finance growth, People will almost always accept pay cuts rather than layoffs. An across-the-board 30% pay cut would have been much more effective than a 30% reduction in staff. The customer ends up suffering. Absolute truth - don't expand faster than your cash flow allows. QED. -- Rob Peglar Network Systems Corporation Internetwork Group 7600 Boone Avenue North robp@anubis.network.com Minneapolis MN 55428 (612)424-4888 x1028