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From strength to strength

From strength to strength

David Strong has been in the IT industry since the late 60s, started Apple Computer in Australia and was referred to as "Grandpa" by the Financial Review when he was only 40. Speaking to Strong, one can't help get the feeling there's a lot to this man they call "the grey whale", who still patrols Sydney's Whale Beach in summer. He's been doing it since Pontius was a pilot and with the same mates for over 40-something years.

Strong started out studying electrical engineering in Sydney, specialising in computer science. It was the 1960s and he soon discovered a passion for micro computing and a head for business. After completing an MBA at the Pennsylvania State University in the US, he returned to Australia to join Hewlett-Packard.

He finds it interesting now that HP is breaking off its services business as a separate company, because when he was there computers were just an adjunct to its instrument sales and accounted for less than 1 per cent of total business.

Strong always liked getting involved with computers and had a fascination for their uses. This proved extremely helpful at HP as he had to configure, install, write software and manage the computers he sold.

By the mid 70s, Strong was working for a company called Measurex, which built computers designed to improve the efficiency of large manufacturing machines.

"It was a novel way of doing business because [Measurex] gave the customer an unconditional guarantee," Strong says. In other words, it either worked to spec, provided the efficiency claims and ROI promised, or Measurex ripped out the kit and refunded the customer's money.

With so many failed ERP implementations, unsatisfied voice over IP customers and SAN stuff ups surfacing in the market, the unconditional guarantee was a big call, a forerunner to the sort of service-level agreements we're seeing today and something that appealed to Strong.

"We'd lose money if the up-time wasn't there. If it wasn't achieving around 96 point-something per cent, we started losing money. By 93 per cent we lost all our services revenue and if it dropped below that amount we started paying the customer," reflects Strong.

With such emphasis on up-time, spare parts became of paramount importance to Strong. As such, Measurex used Apple computers in around 20 sites linked by the old-style coupling analog modems to keep track of parts and delivery.

"I relied on [Apple PCs] so much that when I couldn't get any service for them I complained bitterly to the US. Apple then said, in effect, ‘can you do a better job?' and that's how it all started," recalls Strong.

The year was 1982. Brisbane was hosting the Commonwealth Games, Mal had less than a year left as PM and Strong opened the first Apple Computer office in Australia. The 80s then proved to be very strong years for the PC. "We used to say that if you weren't growing at 100 per cent you were a wimp," jokes Strong.

But when a glut of PCs hit the market circa 1986, Strong remembered an IDC statistic that he's used ever since to warn distributors about buying loads of stock at a "special price". IDC said at the time that losses due to stock write-offs during this period surpassed the total profits the industry had made since its inception. "It was a sobering thought," Strong says.

Although he would be the first to admit that his reign as Apple's Australian chief was not without its mistakes, he stands by his belief that mistakes are important. Nowadays, he claims too many young people are afraid of making mistakes and their companies are worse off for failing to utilise them by learning from them. "You've got to get out of your comfort zone," he says.

Strong left Apple in 1994 and by then margins on PCs had been falling for some time. But Strong is of the opinion that this was tonic for an industry that heeded no delineation when it came to services. In the early 90s, margins existed on products regardless of whether it took a technician hours to integrate it or a salesperson five minutes to sell it. The margin squeeze actually forced people to find revenues for defined activities, he adds.

Looking at the PC industry as it now stands, Strong can't help but feel a little disappointed that a lot of the functionality and feature sets promised in the 80s and 90s still haven't eventuated. This, he feels, is especially so in regards to genuinely useful voice recognition applications.

After finally moving on from Apple, Strong spent time sitting on the boards of various publicly listed companies, a role he still undertakes from time to time. Traditionally a real hands-on person, taking a step back and looking at how market forces can affect a company's performance as much as their own devices proved a valuable experience for him.

"When you get into something new it seems like a black art," says Strong. "But some of the things I've learnt at board level have been a real eye opener."

Despite the learning curve, Strong is left a little cold by the draft of the boardroom air-conditioning and believes that if a company loses sight of its products in action they can end up as little more than perishable goods.

"When the product becomes the end, you've lost touch with the end user. It becomes, to an extent, very similar to a frozen chicken with a bar code," suggests Strong.

"I wasn't nearly close enough to the action. You had to wait a month, or until the next board meeting for any feedback. It was hard to feel connected to the company."

Strong currently works as a channel strategist for a number of companies, with a leaning towards distributors, which are increasingly dependent on moving up the value chain due to a tough market.

But there is definitely one thing that Strong's years of experience have taught him: what goes around comes around. In other words, IT trends keep occurring and reoccurring time and time again. It's a cycle that gives guys like Strong a pretty rounded view of what works and what doesn't when it comes to the channel.


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