Complete Gateway 2000 Speech Transcript

Subject: Gateway 2000 speech transcript
From: (Jeroen T. Vermeulen)
Date: 7-23-97
Newsgroup: comp.sys.amiga.misc

For some reason, a lot of what was said by Gateway's Jim Taylor at the WOA still hasn't made it to all those who are interested. A real pity, since it explains and answers a lot that is being discussed here by the usual pessimists.

One of the most notable items is the fact that Gateway themselves had little notion of what was going on with the Amiga before they bought it, but it was the enthusiastic user community (and other assorted miracles) that made them think again.

All this can be heard on the MPEG audio samples published on Amiga Computing's Web site (, look under Stuff). However, downloading them takes ages and playing them eats a lot of CPU cycles. So for those of you who didn't get to hear the samples, here's a transcript of what is said in them.

DISCLAIMER - I don't speak for anyone. This transcript is not official, it has not been acknowledged or endorsed (or even read AFAIK) by any of the speakers, and punctuation is my own. Transcribing speeches necessarily involves some guesswork, so it's likely that the text will deviate in some points from what was really said. Typos are also unavoidable since I mostly wrote this at night. Since the samples don't always overlap, I also have no way of knowing whether anything else was said inbetween samples.

Don't use for medical purposes or on live animals. Do not inhale. Ingest after reading. Good luck, 007.

Whatever the weaknesses in my own transcription may be, I think that posting it would do more good at this point than keeping it to myself. I've tried to be conservative in my guesses, so some text is marked as doubtful [word ?], either inserted or deleted [word], annotated <like this, ed.>, or added to describe other sounds <mumbles: yeah right>. Where speakers correct themselves, I've not transcribed the mistake and correction literally but incorporated the correction in the original sentence directly. START OF TRANSCRIPT

Dr. James Taylor, Senior VP Global Marketing Gateway 2000 Incorporated:

Hello Amiga people!

<crowd: hello etc.>

In my country when you say hello they say "Hi Jim!"

<crowd: Hi Jim!>


I really am pleased to be here today, er, as you all know Gateway 2000 has agreed and has completed the transaction to acquire Amiga and it is a wonderful opportunity for Gateway 2000 and we hope that for the world of Amiga it turns out to be just as rewarding. I would like to say on rumours of this meeting today, the US share price of Gateway 2000 rose 7.50 dollars yesterday so...

I felt what I'd do though is spend a few minutes talking about Gateway, because I think that we can all become friends going forward and I think it's important for you to understand who we are as a company, and hopefully gain some confidence in the kind of organization that Petro and the Amiga people have chosen to associate themselves with, because in some ways we are as deeply embedded in the culture of computing as Amiga and its predecessors in Commodore all the way back into the seventies when these ideas were being founded and being built with little cassette tapes on desktops all over the world.

Gateway was founded by a man named Ted Waitt, his partner Mike Hammond, and his brother in 1985 in the American city of Sioux City, Iowa. Sioux City is a city of about 100,000 people, and at the time was the last vestment of the great American cattle industry. It was a deteriorating place of stockyards, you may remember those of you at least my age, the characterization of American industry in the late seventies and the early eighties as being in the tank, unable to compete, and filled with what they called "rust balls". Well, Sioux City was certainly one of the capitals of the rust ball. Ted borrowed 10,000 dollars--actually the truth is he borrowed 15,000 dollars from his grandmother in order to borrow 10,000 dollars from a bank; his grandmother put up a [time ?] 15,000 [cd ?] to guarantee a 10,000 dollar loan--and went into business supporting Texas Instruments' efforts to distribute PCs in the midwest.

Very shortly thereafter Texas Instruments decided to exit the PC business and Ted was offered an opportunity to convert a lot of Texas Instruments warranties to cash, and he used that money to buy some chips from a weak US chip manufacturer called Intel that was launching a new product called the 386, and assembled those computers in the early days--Ted, Mike, his sister, everybody--by hand, and offered them for sale through magazines.

I will tell you something; that according to the historical research we've done, in that year there were 700 direct-mail PC companies in the United States. All the value (with the exception of this one out of Austin, like, I can never think of the one out of Austin, it is er... Dulk, Dul, Del -- Dell company), all the value of all the other companies put together does not equal our revenues in the 1996 fiscal year.

Because Ted did something from the very beginning that was a revolution in the PC business: He built a product from the customer in, rather [than] from the technology out. And from the very beginning we were founded on the idea that we wanted to be the leading marketer of personal computer products in the world. I mean, you can't imagine what it'd be like to be [in] a little John in the middle of nowhere and say, and Ted'd have a ponytail, he was 23, and he says "I'm going to be the leading manufacturer of personal computer products in the world". And this would be the sort of a laughable statement I would get if I was to say "I'm going to Hollywood and become a star".

It wasn't likely--and yet we believe it's actually taking place.

It's happening because of what we think about ourselves as an organization, how we run the business. We are perhaps the flattest large corporation in the world. There's about 10,000 people in the world of Gateway today and there's one chairman, Ted, there's a president, Rick Snyder, there's about 7 senior vice presidents, there's a dozen or so vice presidents and then there's everybody else. We run the business in such a way that everybody sharing a common set of values about the relationship we want to have with the customers and each other, prohibits the need, or limits the need, for a lot of supervisors, for a lot of people running around telling other people what to do. And as a result we remain very flat relative to our market size, and as a result we remain very profitable, and we remain able to move, in an organization as large as we are, against the speed of technology. When P2 <Intel's Pentium II processor, ed> was launched on tuesday of last week, by the time Intel finished the announcement we'd sold 1300 systems.

When MMX went on sale in January with a 9 o'clock press conference in [telannounce ?], we announced at 10 o'clock that we were shipping MMX. We are able to respond very very quickly to emerging market expectations, emerging technology, emerging human resources expectation, and emerging opportunities like the opportunity represented by the <searches for words> Amiga opportunity. We believe in respect, caring, teamwork; we believe in common sense, we believe in aggressiveness, we believe in honesty and we believe in efficiency, and we believe in having fun.

I've noticed that at least on the last count, we share something with the Amiga world right out of the box. This is a technology that is about not just working with computers but having fun with computers, making computers make a difference in people's lives. Our marketing position--we used to pray silicon prayers describing ourselves, because what we're interested in doing is making technologies more accessible to the ordinary needs of ordinary people. Sometimes I like to say that what our business really is, is taking extraordinary technologies and making them do very ordinary things, so that people can do more and more, and more better things with their lives.

Our mission as a company is to profitably grow our business faster than our competition by better understanding and serving the desires of our customers and marketing high-value products directly to our customers. And there is no company in the world that fits this mission better than Amiga. And quite frankly there is no company in the world that we are more happy to partner with, and to become next to, than Amiga. We are, as you may be aware, a global company now. We have manufacturing in the US in Sioux City; Sioux Falls; Hampton, Virginia, we have a large marketing center in Kansas City, we have a manufacturing facility (a very large manufacturing facility) in Ireland. We have manufacturing now in Malacca, Malaysia. We have a very large operation now in Tokyo, in fact [Asai Shibbo?] recently wrote that Gateway is the fastest corporate startup in the history of Japan. We grew 389% our first year, and from zero grossed 250 million dollars. In fact, last week on the launch of P2, I think our Japanese people were ecstatic: Sales in Japan on May the 8th exceeded the sales of Gateway throughout all of Europe.

We are a desktop and portable manufacturer. We [are] probably now lead the US in terms of desktop sales to various kinds of categories in the home market. Nielsen and IEC just announced that we are now the #1 brand in the US for brand loyalty (we just passed Apple), and we [have ?] now go back in the top [tier in ?] service and delivery.

We are also an innovator. We invented and launched the PCTV last year with our Destination line. This is a product that puts the tuner on the motherboard and converts very large VTAs into functional televisions while retaining all the capacities of computing. We are the time-to-market value leader in new technologies as well as product innovations that serve the customer's needs. We currently have just under 8% of the US desktop market, five billion dollars in revenue last year, 1.9 million units last year, a 43% increase on year-on-year, and I just saw the numbers for the first quarter 19--[]

<going on to next sample>

[]--We grew in the home market 55% and in the corporate and enterprise market 26%. Our profits last year were 251 million dollars (that's rounded), we have a little over 500 million dollars in the bank, and we have a total last year of about 800 million dollars in non-US sales and we expect to exceed that number by a very large percentage this year.

It wasn't hard for us to decide to talk to Amiga, and talk about Amiga, because one of the bedrocks of the Gateway customer relationship has always been being next to the people who are the most enthusiastic users in the world. Gateway's marketing strategy--and I can speak to this with some knowledge, I will have difficulty answering technology questions but I do understand what our consumers are looking for--is the first [] of a country we enter into, to be what we call the enthusiasts: People who are given to using computers as a part of their life on a daily basis. People for whom being involved in the computer world is a part of their self-esteem. People for whom computers have become a natural part of what it means to be alive today.

Once we have established ourselves in responding to a country's needs in that category we then begin to look at opportunities in the generalized consumer market or the enterprise market, the corporate market, the institutional markets. But the cornerstone of the company has always been, and will remain, relationships with enthusiasts. And another point of similarity is--and I can tell you we've gotten thousands of letters now, thousands of letters, from Amiga enthusiasts that run the gamma from "Oh boy, are we glad you guys got it" to "Oh boy, you screwed us up, I will kill you".


[]! I wanna know who wrote that []!

<more laughter>

Now we've completed the transaction through the German bankruptcy court; it has now been approved by the German regulatory council. We are not disclosing the terms of the transaction but I would like you to know that the transaction is completed. The parent corporate name of Amiga will be Amiga International, which we enlisted as a wholly-owned subsidiary of Gateway. It will continue to run as an autonomous company providing services, products, and development to the Amiga community. We acquired all the aspects of Amiga and that included the inventory, the trademarks, the operating system, the hardware designs, the intellectual property. But what we really acquired, what we found we acquired, I think what we were surprised we acquired, was the World of Amiga.

And I spent of a lot of time studying this, so I want to take a minute just to say something. It is clear that without you people, we would have had nothing to acquire. So the first obligation of Gateway 2000 is to say thank you. It is the Amiga community that has kept this brand and this OS and this product line and this concept alive without the support of strong corporate financial backing, without the support of a wild and competitive advertising scheme, and without a lot of things. It is the belief in the OS and the belief in the value of these products in the world of computing that has kept this product alive. So Gateway 2000 would like to say: Thank you guys very much because without you, there'd be no Amiga.

Before I turn it over to Petro I'ld like to introduce my two colleagues here. They'll be here all the next couple of days. They'll be happy to talk to you. Steve Johns is our head of corporate development. Stand up Steve, so I can see you!

<STEVE: I'm going to receive all the thousands and thousands of letters, so if there's any [] you know I'm working on it>

<Jim laughs, then resumes:>

And Steve Braddocks, who is also part of the corporate development department and has been the lead guy in handling the details of the acquisition, so on behalf of Gateway 2000 again thank you very much, it's a pleasure to be here, and it's a special pleasure to introduce my new friend Petro.

<Petro: Thank you, Jim>

Petro Tyschtschenko, CEO of Amiga International:

<joking to Jim, barely audible:> [... I?] know already our new goals for Amiga, all the figures that you presented, and our next goal.

<Jim laughs, says something like "kept [?]">

Ladies and Gentlemen, distinguished guests: I'm looking around here, and I see a lot of people which I know. People who have long experience with the Amiga, and people which supported Amiga and supported today as well. It is nice to me to see that the Amiga platform is gifted by a community of competent people. These strengths are going to be of critical importance for the success of the plans of Amiga International, which I am going to explain [to] you later.

Anyway, I'm very happy to see you and I would like to welcome you to this press event. I believe there is a bright future for Amiga International, a bright future for all of us. Let me explain a few details of importance so that you can have a better understanding of what has happened to Amiga since the old Commodore days. Escom acquired Amiga in april 1995. During this time, an effort was made to revitalize the Amiga market. However, Escom went into financial difficulties and filed for bankruptcy on [the] 15th of July, 1996.

During this time, an effort was made to develop products. But due to financial difficulties, there has not been any signific[ant] amount of new product development by Amiga over the past couple of years. [Those] are facts. Since filing for bankruptcy we have been trying to keep the marketplace alive through inventory sales by the Trust. However, it has truly been the Amiga community that has kept Amiga alive through the development of products based on newer technology and software applications development.

Now that Amiga is owned by a successful company, Gateway 2000, there is a bright future. Gateway 2000, we just learned (and we know), is a solid and well-established in the computer industry. Gateway 2000 has consistently been honoured with awards for products and service. Gateway 2000 is a bright partner to give Amiga new life and energy for the future. Amiga International was formed as a US-based company in March 1997 to acquire the assets of Amiga Technology GmbH. Amiga International will operate, as Jim already mentioned, as a wholly-owned subsidiary of Gateway 2000.

Over the past months we have been very busy finalizing the exhibition [/acquisition?] together with Steve, and Keith, performing due diligence, setting up operations in Germany and communicating with you, ladies and gentlemen, the Amiga community. We have a new office in Langen, next to the Frankfurt airport, and I'm happy to report to you that we are operational again. In Langen we have three people handling sales, marketing, and general administration. We will be running in the beginning of June. Since early April we have four employees in Braunschweig that are taking care of logistics and warehousing, order processing, and customer support, and, you maybe noticed this already, Internet support as well; and technical service. Finally, we are in the process [of] identifying an individual to manage new product development, which is so important, and R&D.

What are we going to concentrate on? We have to implement our strategy. First, supporting the existing Amiga community. Second, leveraging the existing Amiga technology through broad licensing. Third, assisting in developing new products based on open standards to the home computer and video graphic market.

Ladies and gentlemen, how will we support the community, that has kept Amiga alive? Through conventions, press conferences, via the Internet, meetings and all useful initiatives coming from the Amiga community (I've already been to conventions in Germany and in Sweden, and will entertain any suggestions); continuing, of course, to sell [through the distributor?] network which is existing and which has supported the Amiga; working together with developers through concepts such as the Open Amiga Initiative, that is being formed with the support of many [of] prominent names in the Amiga community.

The basic of success in this project is to work together with partners and to define a common path of development. The Amiga market cannot afford a split, ladies and gentlemen. We must go together in one direction. For us to keep the market alive is necessary to assist many companies in developing products through broad licensing. Our licensing policy will be very open, broad, and focused on licensing the standard OS, chipset, and trademarks.

Also, licensing will alllow the Amiga to be spread to many different embedded applications and fields such as medical solutions, military applications, fitness equipment, irrigation systems, and kiosk terminals. Of course we are looking for new partners through licensing and focused R&D managed by Amiga International. We plan to assist the marketplace in developing new products for the Amiga. We are currently exploring many of the possible new products that have been suggested including such things as operating system upgrade and new hardware platform. We would like to keep the procedure, not complicated, but as simple as possible. Simple as myself.

We need to talk with technology companies from the Amiga business and exchange knowhow. Very important. It is also important that we explore an open Amiga platform, use industry standard components to make it cheaper to produce, faster to develop, and easier to operate.

These things, ladies and gentlemen, need to happen very quickly--but in a very managed fashion. With this strategy and the support of the Amiga community and Gateway 2000, we are convinced there is a bright future for the Amiga.

That, ladies and gentlemen, concludes our presentation for today. Jim Taylor and myself are now ready for questions and answers, and we hope that tomorrow you will all enjoy the fair and visit our booth. Thank you very much.

Q1: [] We appreciate Gateway buying us, very much so, but we kind of wonder, what does Gateway get out of this? What did you achieve by buying this [elaborate?] kind of [electric?] gizmo?

Jim: We believe that Amiga can be one of the most important computer companies in the world, to the extent that if it succeeds, we succeed. I mean, this is an important investment for us from the point of view of the future of Gateway. We believe that this is a very, very important market. We believe in a multimedia computing future. We believe that we are very close to the day when every household will be its own broadcast center, its own Internet site, its own Web site, its own communicating entity; and certainly Amiga represents a very important technology in that venue.

Q2: So, were you trying to diversify Gateway's holdings, er, Gateway's credentials?

Jim: Gateway would avoid the use of words that would cause us to be characterized the ways that other corporations are characterized. We don't speak of ourselves as being "diverse". We speak of ourselves as being a company that is so close to the customer that we know what they want, and we know an awful lot of customers want Amiga.

Q3: Do you guys intend to benefit from the acquisition of this technology beyond simply the [acquisition?] of Amiga Technologies?

Jim: I would be a fool to say no. I can't believe that we won't benefit from this technology. How we will benefit still remains to be seen, it's not clear to us how that will work out--but, I mean, you guys know, this is some good stuff! So we...

Q4: So you think there's any possibility of Gateway products in the future benefiting from the technology you bought [through?] using parts of it?

Jim: Like I said, I can't imagine that we won't benefit from the technology.

[We guess?] it's very important for the Amiga community to recognize something, and I'll say it one more time because, those of you in the press: I would really like the word to get out. We... Petro has the opportunity to sit down and take a hard look at what it takes to make Amiga "go" in the real world. And we need to give him the room to do that. Gateway is prepared to be patient and let the company develop. As I said, we've owned it for (what? a little over...) a month or, a couple of days... <interjected suggestions> Ninety seconds... Twenty minutes, whatever. And we are here communicating with the Amiga community at the very first possible venue to do so, but we want you to be patient with Petro because the answer to these questions lies more with the Amiga people than it lies with the Gateway people, and I think that's a thing you've got to understand. We believe in Amiga. We believe in Gateway. But Amiga is Petro's destiny, [and] we're here to help.

Now I know everybody in the room has heard about [] corporate [] help, but we hope that we are benign in our processes.

Q5: [] Amiga [] in Brussel <Flemish name of Brussels, ed>. Petro, you said that Amiga could not afford to go in more than one direction, I mean on a hardware point of view. [] But [] Phase 5 has already announced that they are launching next month their PowerPC product. PIOS has a working prototype (without software for the moment). There are already quite some products. MacroSystem has a DraCo running for quite a time now. What are you going to choose? Is it Phase 5 is going to be the standard or...

Petro: Both we'll choose! Because the one direction we would like to go, is our operating system. This is the line, this is the streamline. We will license them whatever they need, because there is a brilliant technology there, what they develop. Phase 5 is great. I visited them 3 weeks ago, Wolfgang, Gehr[], so we had a perfect meeting and we know exactly in which direction we go. This is one direction. What I don't like to have is that we have a war in our community. Everybody's going in another direction, and doing his own... cooks his own cup of tea or whatever. But there is only one Amiga. And we are the roof, and you can develop, and we will support it, and we will license it. Whatever you need--but under one roof, in one direction.

Q5: ...And always keep a very consistent compatibility, [] applications compatibility?

Petro: Yes, we will maintenance our operating system. We have a lot of things to do of course. We know this, right. We have to put out the dust a little bit, right, so we know this. We will do this, and we will license this.

Q5: ...There are things--I'm sorry, one more question,

Petro: One more, er...

Q5: There is something that has always amazed me, is to know why do we have so much.. Why are we so arrayed on the PowerPC platform, because there are already quite a few...

<petro laughs>

Q5: ...No, no no, let me... There are already quite a few 68000 emulator box running, the ones from Apple, from other competitors, and it is not so difficult to cross-compile, as we have seen in the PowerPC MacIntosh during the first years.

Petro: <joking> Yeah, but please don't forget--two bankruptcies!

Q5: Yeah, I know, I know, I know.

Petro: <plaintive> I'm getting crazy! They said I'm already [doing up?] the third one!

Q5: <laughs> I just cross my fingers you never go to the third one!


Jim: He sent me an Amiga... I got a guy in my office who's from Corporate Design. He stole my Amiga.

<laughter> <interjection (Petro?): I'll send you another one>

So, I guess it's No.

Q5: How do you know that this platform is so fantastic if you never had one of them?

Jim: I'll tell you what happened. It was kind of interesting. I went out to Wired Magazine to see Lou [Zeno?], who is both an important publisher in our... Well he's a friend of mine. And in the last year, Wired had become a Gateway shop. And Zeno took me to the back room where they're doing the development for HotWired, and it was all Amiga. And he said he wanted me to know that since he'd heard a rumour we were in the process of acquiring Amiga, that we had bought the finest multimedia platform for the development of the Web long-term, and that his black box, er, I've forgotten the word for it, but his people were great Amiga lovers, and I asked the people and they said so, and then I wandered around the [Southland?] market Web site manufacturing area with a lot of consultancies in the US and Amiga is one of the dominant companies.

Then I talked to a friend of mine, his name's Chase Carey, who is on the board with Fox TV and I found out that Amiga is widely used now in the American television industry in deference to [Cairon?] and other kinds of on-screen graphic application packages, and then I found out that 50% of the cartooning in America is done on Amiga platforms. And then we cut a deal with George Lucas to put Destinations in the National Aeronautics and Space Administration Museum in Washington, for Lucas' Star Wars exhibit and in doing so, I found out that they are important to their 3D special effects people.

So I took the word of people whose judgment I trust. I would never take my own word about what's good technology because I am a marketer. I'm not a technologist--I couldn't spell Computer if you [spotted me the Comp?]. But I am compelled to believe that this is a great platform.

Q6: Some questions first for Petro: Are we likely to see any updates on the present Workbench or do we wait for 4 to come along?

Petro: We are working on this. I will not make any promises because this would be out of style. If we say something, we will stick to this. I hope that we can launch an OS upgrade in November.

;  Jeroen T. Vermeulen   \\"How are we doing?"//   Yes, we use Amigas    ;
;---    ---\\"Same as always."//--         ...          --;
; \\"That bad huh?"//  Got a problem with that? ;
Contradiction in terms:  "I don't believe that anybody/feels the way I do/..."

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