“I’m a farm boy,” says Ralph Hyatt, who grew up on a Southern Ontario spread herding purebred Charolais cattle.
But one might say computing was in his genes. His father was an IBM Canada engineer who after 20 years decided to make his hobby farm a full-time business.
He followed his father into computing after graduating from Wilfred Laurier University, first being hired by IBM Canada and working in sales and marketing for eight years before going to Compaq Canada, where he rose to VP of the access business group. When Compaq was swallowed by HP, he jumped to Toshiba of Canada to run its laptop and accessories division.
CDN: What’s the worst decision you made?
Ralph Hyatt: At Compaq, over the direction of the PC business. It burnt my bridges with the corporation and made me ineffective as a manager.
It was a battle over how aggressively Compaq Canada should pursue the direct business. Compaq was in some difficulty and the belief was it had to convert its business to direct to compete with Dell. The Canadian management team believed the channel model was worth protecting . . . At the end of the day I did what headquarters wanted.
CDN: Dell is the number one laptop. How do you fight them?
R.H.: Comes back to the value of the model we have. We are a product company, so at its core we believe we are delivering superior products. We have significant investments in service and support infrastructure through our authorized service providers . . . Beyond that I believe there’s a huge amount of strength in the channel model competing against Dell. We haven’t seen Dell grow by leaps and bounds. Their share of the notebook business is just north of 20 per cent. There’s still 80 per cent of the market that is dependent on channels of all types.
CDN: What do you see your resellers doing wrong?
R.H.: Our model works very well with resellers that are focused on the same opportunities we’re focused on – not in chasing the really large enterprise accounts but chasing the mid-market, public sector customer, because they’re the ones that typically need the most help, that don’t have a sophisticated IT department. They’re the ones that generally speaking are more profitable for the reseller community, because you can build more services and solutions to that customer set. Customers who are buying anywhere from 50 to 200 notebooks are absolutely the sweet spot for our model.
CDN: The U.S. has announced a Toshiba Preferred Channel Program. Will those changes come here?
R.H.: No. The U.S. organization is trying to move back to the business model the Canadian organization has, and there’s good reasons for that. Our (market) share in Canada is significantly higher than it is in the U.S., or other geographies, quite frankly. To some extent any Toshiba subsidiary who wants to benchmark themselves has to do it against the Canadian organization because we’re the one that has consistently delivered the best share, the best profitability and has the lowest fixed expenses.
CDN: You’re into LCD panels, but looking on your Web site you only have two. Do I describe that as a tentative step into that market?
R.H.: What we envision is it’s a complementary product to our customer base. We really don’t sell LCDs to a lot of net new customers, but its an additional product offering to customers who are predisposed to Toshiba products. We’ve probably penetrated 15 to 20 per cent of the install base. In a few cases it’s been a door-opener.
I think there’s opportunity for the corporation to bring a more complete LCD strategy to bear and I think that’s what’s going to happen, because the only geographies that actively market Toshiba LCDs are us and Japan.
CDN: What else is your division going to be expanding into? You’re in Pocket PC devices, although there’s only one model.
R.H.: The future for Pocket PCs will be in converged devices, and that is something we have not yet brought to market. The traditional PDA doesn’t really have any legs left. Our focus is on notebook computers and related devices and that’s unlikely to change significantly. We may see some different types of devices off that notebook base – we’re very strong in Tablet PCs, of course – but I don’t see us in things like traditional desktops, servers or printers.
CDN: What about a converged device?
R.H.: We have a mobile communications company within Toshiba. I mean, Toshiba’s a massive organization.
CDN: You’re not that massive – you don’t make refrigerators.
R.H.: Yes we do.