As mentioned on p. 27 in Chapter One, while Ray was winding down his involvement in System Industries his old colleague Jack Davis arranged a meeting with him. Jack tried and failed to interest Ray in the new business he was trying to start.
He came to me in the early ’80s with a business plan about putting together what ultimately became Novell. I looked at it. I thought it looked like too much too soon and, more important, the things he was planning on making—terminals, printers, and personal computers—were all rapidly becoming commodity items. These are the kinds of things that are sold mostly on cost and very little on features.
If these products were going to have to be sold on cost, then why was he manufacturing in Utah? By the early ’80s it was quite clear that electronic commodities should be made offshore.
Why didn’t he see this? Because of the early company personalities: He brought in George Canova and Joe Maroney. George was a technical guy; he wanted to build things. Joe was a production man; he wanted to build things even more than George did. None of these people were marketers; they didn’t look carefully at the market and the pricing they would need to compete. So in picking his early team Jack more or less locked in his company’s destiny as well.
If Jack and George had done their marketing homework they would have realized that the products they were planning to make would become commodities and therefore very price sensitive. They would then have realized that they couldn’t follow the inevitable price declines if they were using US labor and production facilities. They would have gone offshore for production and concentrated on other things needed that can’t be provided from offshore: Sales, service, and support.
Ray wished Jack luck but bowed out. Jack called George and NDSI was born.
In August 1980, Ray joined Boschert, Inc., as Chief Executive Officer. Boschert, like Systems Industries, was a Silicon Valley company based in Sunnyvale, California. Founded by an engineer named Robert Boschert, the company manufactured power supply systems for computers. When Ray joined, the company had about 400 employees.
Computer power supplies are critical to the operation of computers. There is a power supply in every piece of equipment that uses integrated circuits (ICs) and is powered by house current. They are the component that turns 110- or 220-volt AC power from the power plug into the 5- and 12-volt DC power that computer ICs require. (Power supplies aren’t needed when batteries are used because batteries provide steady DC power.)
Computer power supplies have a reputation among digital circuit engineers for being “black art”: The theory is well known, but the practice is subtle. They are part digital and part analog, and designing good ones isn’t a cookbook procedure. Power supplies can range from the bulky looking plug thing that fits into the wall socket and recharges your battery-powered electronics, to the shiny metal box inside your PC, to giants that supply power for big industrial equipment.
Computer power supply equipment is hardware. The manufacture of hardware is a relatively low-margin business in the computer industry and technologically advanced designs rapidly become commodity. Ray’s challenge at Boschert was to find a way to reduce manufacturing costs while continuing to develop technologically advanced products.
“I was in the process of moving Boschert’s power supply manufacturing offshore,” said Ray, “although, I have to admit, I had to do a lot of convincing at Boschert before I got the rest of the organization to see the light.”
Ray later described Boschert as “started by an inventor, an engineer—a wonderful man. Very capable in his own right. Skilled at doing what he does best. Not so skilled, as the company began to grow, in setting the right course and keeping it on track in accordance with the expectations of the investors. So I had an opportunity to go in there, as a finder really, and found that there was enough good strength there on which to build a growing company.”