Misspelling Doesn’t Slow Amperif Bid for Exposure
Back in 1971, Keith S. Tattersall and his partners wanted to name a company they were starting American Peripherals, or some shortened variation.
The only problem was that the company’s lawyer spelled it with an “f” instead of a “ph” when he registered it. The result was Amperif Corp.
Despite the goof, Tattersall and his partners kept the name. Since then, they’ve made it the only name of note in the relatively small market of supplying disk-drive data storage systems used in the 1100 model mainframe computer formerly made by Sperry Corp. and now made by its successor, Unisys Corp. (Unisys was formed in 1986 when Sperry was bought by Burroughs Corp.)
Amperif’s hold on the Unisys market seems fairly secure. Last year, Tattersall said, the privately held Chatsworth company rang up $35 million in sales. This year, thanks to an exclusive supply contract with Unisys, the company expects revenue to soar 63% to $57 million and net income to be about $4 million, he said.
But to keep growing, Amperif expects by year’s end to enter the high-stakes International Business Machines market and try to supply its disk-drive systems to IBM customers. Tattersall, who is chairman and chief executive, estimates that the potential IBM market for the company is from $50 million to $100 million in revenue a year.
Formidable Competition
But, here, its chances for success are less certain. Amperif would compete against such formidable companies as National Advanced Systems, Amdahl, Memorex, a recently revitalized Storage Technology and IBM itself.
Besides facing tough competition, Amperif also must set up a major distribution network for its product, either by making an agreement with a computer equipment distributor or setting up its own system.
“Growth like this is always hazardous. As you grow, you become more exposed to other competitors going after the same IBM business. It’s a whole new marketplace,” said James N. Porter, publisher of the trade publication Disk/Trend Report in Mountain View, Calif.
Amperif’s disk-drive data storage systems typically sell for $250,000 to $300,000 each and look something like large kitchen refrigerators when assembled.
Stacked inside are as many as 16 hard-disk drives, mostly bought from Control Data Corp. in Minneapolis, that are each the size of large shoe boxes and use magnetic heads to read and write information on rigid platters. The collection of disk drives can store some 16 billion characters of information.
Amperif’s system attaches to mainframe computers, which are the big, powerful machines that operate hundreds of times faster than smaller computers and are used for such large tasks as processing the payroll for major corporations or storing records for large banks. The Unisys mainframe computer for which Amperif sells its data storage products can range in price from $1 million to $10 million, Tattersall said.
Amperif owes much of its success, to date, to carrying out something akin to a high-tech guerrilla war. In 1976, it started competing against giant Sperry for the data-storage system business. Eventually, it came up with a version that used smaller, 8-inch disks rather than the larger, 14-inch ones Sperry was using.
The smaller disks made the whole data storage system smaller, which customers preferred because it took up less space in their offices and required less air conditioning to cool the room housing such powerful machines. Sperry realized the advantages as well and signed Amperif in 1986 to an exclusive contract as a supplier, which Unisys, based in Blue Bell, Pa., has decided to retain.
More important, the Unisys deal gave Amperif national credibility as a supplier. Now, it is trying to get a similar contract with Control Data.
Although Control Data is a struggling computer giant, Tattersall believes that there is a good opportunity to supply data storage equipment for the company’s large computers. Last year, Amperif introduced a data storage system for Control Data computers, hoping to pressure the company into the same kind of contract it has with Unisys.
Tattersall confidently predicts that Control Data will come around.
“We have to demonstrate to them we have a good product by taking business away from them,” he said.
But it’s clear the IBM market is what appeals to Tattersall most, although he concedes that it also will require extensive planning. When mainframe computers break down, it’s a major crisis for many customers. As a result, Amperif will have to establish an elaborate service system that can respond instantly to any failures.
“If you can’t respond in less than two hours, nobody wants to even talk to you,” Tattersall said.
Tattersall and two other men started Amperif as a consulting firm in 1971. In 1976, the men, along with another executive, decided to turn Amperif into a manufacturer.
Tattersall and his other three partners, who all worked at one time for a data storage firm in Van Nuys called Intranet, were Alexander Beickovsky, who now is an Amperif senior vice president; Neil Lynch, who remains a director, and Marvin Schulhof, who sold his stake years ago and is no longer with the company.
The four invested $125,000 in all and set up shop in a building behind a paint store in Van Nuys. The company has moved three times since as it has grown, most recently last year to a complex in Chatsworth that once housed Computer Memories, a once-flourishing maker of disk drives for IBM personal computers. A native of Utah, Tattersall, 52, owns about 25% of Amperif. Other employees own close to another 25%.
Amperif has nearly gone public twice. In 1985, the company needed money to finance expansion and had filed a preliminary prospectus and other documents with the U.S. Securities and Exchange Commission.
Amperif pulled the offering when it received an $8-million infusion from a group of British and Australian investors.
Other large investors in the past seven years include a unit of Continental Illinois in Chicago, which has invested $1 million. Another $1 million combined investment has been made by John Hancock Venture Capital Management and Centennial Fund, a Denver venture capital group.
Last year, Tattersall had begun discussions with investment bankers to try again to take Amperif public. Then came the October stock market crash, crippling the market for initial public offerings.
Tattersall said there’s no pressure to go public, but added that he is eager to let the company’s private investors realize something on their investments. He says he may try to take Amperif public again late this year.
Whenever it happens, the misspelled name that Tattersall has tried to make well-known in the mainframe industry will finally get some public exposure.
