Al Shugart, 76; Was Silicon Valley Pioneer

By Patricia Sullivan
Washington Post Staff Writer
Friday, December 15, 2006

Al Shugart, 76, who pioneered the multibillion-dollar computer hard drive industry and was one of the more colorful characters of Silicon Valley, died Dec. 12 at California's Community Hospital of the Monterey Peninsula of complications from heart surgery he had six weeks earlier.

Mr. Shugart, a former bar owner and commercial fisherman who favored Hawaiian shirts over traditional business attire, co-founded Seagate Technology in 1980. The company built the industry's first 5 1/4 -inch hard drive for personal computers and is credited with turning the original IBM personal computer into a business tool.

His business became the biggest independent disk maker in the world before he was fired by his board in 1998 during a downturn in the industry. But the reputation of Mr. Shugart, who continued to work as a technology consultant and served on a number of corporate boards, survived intact.

Although he nurtured an image as an iconoclast who tried to run his Bernese mountain dog for Congress and who attempted to put an option for "none of the above" on the California ballot, Mr. Shugart was actually a savvy and sometimes bare-knuckled businessman.

"[E]ven in this industry of tough taskmasters, Seagate is known as a bully of sorts, a reputation earned with its history of sudden layoffs, harried hiring binges and an erratic bottom line," said a Washington Post article in 1990.

Mr. Shugart, who sported what the San Jose Mercury News called "a corner barbershop haircut," was one of the first Silicon Valley entrepreneurs to cut costs by taking production to Southeast Asia in 1982.

Dogged by shareholder lawsuits over his stock trades in the 1990s, Mr. Shugart launched an industry-wide campaign against class-action suits. It was a nasty fight that culminated in the Private Securities Litigation Reform Act of 1995, which limited securities fraud class actions against corporate executives. President Bill Clinton vetoed it, but Congress overrode the veto.

Mr. Shugart had come a long way from his impoverished childhood in Los Angeles. He graduated from the University of Redlands with a degree in engineering physics in 1950 and joined IBM the next day. He was married, and the first of his five children had just been born. Survivors also include seven grandchildren.

Within 10 years, he was in charge of the IBM team that is commonly credited with the invention of the first floppy diskette, an 8-inch square that saved data at a time when computers did not have much built-in memory.

By 1969, weary of the strait-laced culture at IBM, he left for Memorex Corp., taking along about 200 engineers. He left there within a year or two and started Shugart Associates. The firm fell behind in development of its floppy disks, and his financial backers booted him.

Nearly broke, he moved to the laid-back surfing town of Santa Cruz, opened a bar and bought a salmon-fishing boat. But he wasn't through with the boom-and-bust tech world, and in 1978, he and two colleagues revived his company as Seagate Technologies and produced a 5 1/4 -inch disk drive.

Seagate made everything that goes into disk drives, including heads, media and motors. The industry is now worth $28 billion, with worldwide sales predicted to rise to $41.5 billion in the next three years, market research firm IDC predicts.

Mr. Shugart invested in restaurants and took twice-yearly vacations to Las Vegas, where a colleague once saw him drop $70,000 at one blackjack table, only to win $100,000 at the next. His motto, "keep it simple," his chain-smoking habit and his dismissal of trendy employee perks made him an anomaly in the go-go 1990s of Silicon Valley but also the object of fascination.

"I'm a street guy," he told the Mercury News, "not a corporate executive."

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