Acorn User 4/AUCD4.iso/acorn/documents/corporate/restructqa

Text File | 1996-02-28 | 21KB | 402 lines

19/09/95
Questions and Answers for the re-structuring

Financial
~~~~~~~~~
Why has Acorn made such large losses?
This was the result of a number of factors:

The education market has been subject to unprecedented concerns about the
adequacy of their budgets. This has resulted in delayed and significantly
reduced purchases.

These figures also represent a number of exceptional charges to the accounts :
• redundancy provision
• closure of Acorn GmbH and the write-off of German product
• write-down of stock values
• additional warranty provisions for extended life warranties.

Is this the end for Acorn?
Absolutely not. The future role of Acorn is to focus more clearly on the
increase in the diverse requirements of our different markets and
technologies.  To this end we are making a fundamental restructuring with a
division 'Acorn Education' which focuses very strongly on the total product
and service requirements for UK education and 'Applied Risc Technologies', a
division that will use our RISC technology in a number of diverse areas
inside and outside of education.  Online Media will continue to operate as a
specific division focused on the major worldwide opportunity afforded by the
set-top box revolution.

The new management believes firmly that the opportunities for the Acorn
Computer Group are brighter now, given our new focus and orientation.  Given
the financial underwriting of our shareholders, the company believes that it
is more than capable of effecting this transformation and growing in
1996/97.

Will there be more cuts?
This radical restructuring and re-orientation is anticipated as being a
one-off exercise.  Clearly, if we are not as successful, then there could be
the possibility of more redundancies.  However we believe this fundamental
restructuring will give the new divisions an opportunity for maximum future
growth potential and consequently there is no anticipation of any further
job redundancies.

What is Acorn Education?
Acorn Education is the new division of Acorn Computer Group.  Its major
focus is to provide a complete range of products and services, both Acorn
proprietary and from other vendors, to satisfy the growing demand for a
broad range of products and services from UK education.   It is
predominantly a sales and service organisation that will acquire products
from other parts of the Acorn Computer Group and from other vendors.

Financial Relating to Education
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
What do the financial problems mean to education?
The education business has always been a core part for Acorn Computers and
therefore it is our intention to retain that position and enhance it by
offering a broader range of products with appropriate levels of service and
support.  In practice, we have significantly increased the number of people
serving education.

How is Acorn Education different from ACL?
Acorn Education is a sales and service organisation with the emphasis on
customer orientation. It is more closely associated with the
requirements of the education market, whilst recognising our historical
commitments and also our loyal customers who do value our technological
content. This is a subtle but significant move from our previous approach.

Does Acorn have the experience, intellectual skills and people?
Given our knowledge of the education market, our knowledge that we have
acquired in non-proprietary and other hardware and software, it is not
beyond the capabilities of Acorn Education to effect these changes and move
forward.  Issues like the PC Card, Power PC, the Psion products and
multi-vendor networking, have already led us to a fundamental understanding
of the technologies that our customers may wish to use. Therefore the
positioning of Acorn proprietary products and the products from other
vendors is clearly understood by Acorn.

Acorn Education will not have any products or enough products because
technical resource has gone.
Quite the contrary.  Because of a wider group of marketing people and a
larger group of technical support, Acorn Education will be able to offer a
broader range of products than previously.

However because of its relationship with ART, it will also be able to
acquire products from ART which it will be able to offer to the education
market. ART will be responsible for its business strategy but a key part
of that will be to furnish the relevant and appropriate products for Acorn
Education.

What is the relevance of Acorn on the world stage?  Should Acorn continue to
be supported?
Acorn continues to be a company that achieves worldwide interest.  The
primary goal of both Online Media and ART is to achieve a world wide
position and value.   Acorn Education will operate predominately in the UK
market by offering a broader range of services and products. It will plan to
increase its revenues and wider the territories we have traditionally
supported.

How will customers be supported?
Support on a day-to-day basis will operate through the Acorn Education
support organisation.  Given the support infrastructure being put in place
by Acorn Education, it makes sense to use this to support our other
customers which in volume terms are much smaller than our education market.
They will of course be given their own telephone numbers and escalation
procedures and should see an enhancement of service as they are moved closer
to the main stream support groups.

Enthusiasts / International / Publishing
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Enthusiasts/Publishing needs are greater/different to education...
The requirements of our enthusiasts and VARs are different to a certain
extent from those of education.  Again for operational reasons, they will be
managed in the most appropriate way. Chris Cox, although resident within the
Acorn Education Division, will be responsible for handling enthusiasts
(this is because we know a large number of enthusiasts are also in
education).  The VARs organisation will be handled from within ART.
Enthusiast's market requirements will be fed back and used for future
product developments in just the same way as they are today.  It is not
anticipated that this will result in any dramatic changes in their input or
priorities.

Is this is Acorn moving out of these markets?
Not at all.   In fact the issue really is one that Acorn wishes to put
further effort into these markets, and with the establishment of ART, we can
devote proportionally more intellectual effort in meeting their
requirements, without necessarily having to compromise within the
educational environment.  The Value Added Resellers and enthusiast market
remain the major opportunity area and a successful, commercial relationship
with these customers remains a priority.

What will happen to the Clan?
We have no plans to stop the Clan.  It has been highly successful for us and
we have gained great feedback.  We hope to use the Clan to push the ART
message and to gain further sales, especially from some of our future high
performance platforms.

We see them as a major opportunity area, especially for future ART products
and they will become a valuable market and test bed for a number of the more
revolutionary ideas that ART plan to commercialise.   The Clan and
enthusiast marketing will simply operate out of Acorn Education since we do
not wish to duplicate the resources, sales and administration etc. brought
together by Acorn Education.

What will happen to Publishing?
Publishing will be serviced as part of our normal VAR market.  Within the
strategy for VARs, we are focussing in on the multimedia, high end graphics /
video type aspects which will be applicable to Publishing, as well as
broadcast industries and others in a similar domain.

How will International markets be supported?
International markets will be supported predominately through the Acorn
Education Division, since as we have already stated they have the majority
of the infrastructure necessary to achieve this with economy of scale.
International organisations will be given their own telephone points of
contact and will be handled by the support organisation as a recognisably
different group of customers.

Why this approach?
The whole strategy allows our respective divisions to focus on the things
they believe they need to do to achieve substantial revenue and growth and
they will be able to achieve some of the key business objectives needed to
be credible players in the twenty-first century.   By de-coupling our
relationship between Acorn Education and Acorn technologies, we can best
focus our strategies to address both these areas which are increasingly
becoming different.

General Technology
~~~~~~~~~~~~~~~~~~
Do Acorn's products still have relevance in today's world?
Acorn's products are highly relevant in today's world.  However because of
the position in the desktop world market, our sales and marketing capability
to convince people of their validity, is somewhat limited through sheer lack
of resources.   That is why ART is moving to a business model, that focuses
on selling our technology to other high technology and consumer companies
who will then offer the necessary sales and marketing support.

Acorn is moving to become a "me too" player
It is true that in the education market,  Acorn will offer products similar
to the ones available through other organisations.  This is an inevitable
consequence of the changes in the education market and the pressures brought
to bear by global players.   In the technology world, Acorn is anything but
a "me too" player and offers a number of unique services and facilities that
are only available in the Acorn community.

Won't developers start to jump ship?
The worldwide market for non RISC OS products is already large and
developers have started to produce products which are cross-platform.
People who are utterly convinced that the only route for them  is to develop
uniquely ARM based products on desktops for education, will find that their
market over time will be restricted.

However software developers who want to produce products on a broader range
of platforms, will see their opportunities expand, especially through the
sales and marketing capabilities of Acorn Education.  There will be a whole
group of developers who will be able to work with ART to produce new types
of products aimed at some of the new opportunities afforded by ART.

Will Acorn stop making or designing computers?
ART has a committed development plan to produce both the current and future
versions of the Risc PC and A7000s for Acorn Education and its VAR markets
and will probably be producing a new range of high performance desktop
computers.

ART will also be designing computers for a variety of other people, largely
in a custom or vertical market application area.  There is no intention that
the Acorn Computer Group will get out of designing or making computers,
although they may well be focused in different areas to the ones that we
have traditionally made.

Acorn Education specific
~~~~~~~~~~~~~~~~~~~~~~~~
What does Acorn Education offer?
Acorn Education offers a broad range of computer hardware, computer
software, services and support, predominately orientated around the
requirements of UK education.

Does Acorn Education still sell consumer orientated products?
Yes.  Especially where they are based either on the concerned parent market
or on our enthusiast market.

Does Acorn still have dealers for consumer sales/overseas?
Acorn Education will be responsible for controlling both the UK dealer sales
organisation and managing the co-ordination of our overseas activities.
There is no plan to shut these down.

What about Acorn World?
Acorn World carries on as originally planned.  We do not plan to make any
significant changes, apart from communicating the organisational changes and
the future business strategies of ART and Acorn Education.

How do we buy?
People will buy products as they do already through either the direct route
if they are an educational institution or via our dealer organisations.

Who do we talk to?
Communications will typically take place through the normal sales and
account management, through normal dealers, AEC and agent channels.   The
external presentation for Acorn will remain largely the same.

How will we see new products?
New products will be released to the market through our conventional
channels, that is our agents and dealers and will be supported by the
appropriate exhibitions.   Future products from ART will also appear through
ART's customers' channels, who will be bringing their sales and marketing
influences to bear.

When will we know what products and services Acorn is offering?
Acorn Education is producing new and regularly updated product catalogues
that will cover the range of products which they offer.  Additionally there
will be enthusiast specific information that will be made available through
our enthusiast dealers and all these will be communicated through the normal
press and communication channels.

Who sells software and peripherals, Acorn or the developers?
Software and peripherals can be made available through both Acorn and the
developers.  It will be decided on a case-by-case basis how these are
offered and where the most logical route is to be.  The key proposition that
Acorn Education offers to developers is that it has a highly structured,
efficient communication channel to pass products through.   Our research
shows that most developers spend proportionately very little effort on sales
and marketing and therefore the Acorn Education sales and marketing
logistical machine will be able to furnish them with an excellent route to
market.   This is not an exclusive operation.

Will Acorn Education's range of products and services encroach on AECs and
LEAs operations?
It is anticipated that most of the services offered by Acorn Education will
be largely complementary to that of the LEAs and AECs.  Again detailed
knowledge locally will favour AECs and LEAs in certain areas and the scale
of operation and detailed technical knowledge will favour Acorn.  We see
these as co-existing and to a large extent, complementary.

What about repair issues?
Repair and service and support will be handled very much as before, apart
from the fact they will all be clustered through the Acorn Education
Division and will therefore achieve, greater economies of scale and more
efficient utilisation of knowledge and people.

What about network installation or site surveys?
These will be offered through Acorn Education and its agents and their
subcontractors and again, we do not anticipate any fundamental changes in
the procedures that we have already put in place as part of our move towards
agents.

How does a developer get his product on Acorn's product list?
Developers who wish to have the active support and marketing of Acorn should
contact the Third Party Product Manager within Acorn Education, who will see
how it fits in with the overall strategic objectives of the catalogue and
discuss its appropriateness. This is largely driven by commercial issues.

ART and Technologies
~~~~~~~~~~~~~~~~~~~~
What is ART.  How will it impact on me?
ART is a brand new division of Acorn Computer Group.  Its job is to develop
high technology products and services and components which can be sold
directly through Acorn Education, ART or its Value Added Resellers.  We
anticipate in the future ART partners who have substantial sales and
marketing organisations will take ART products, technologies and services
and use them in more sophisticated products, typically revolving around ARM
technology.

What does ART offer?
ART offers a one stop service involving design, consultancy and production
of a number of high technology components, ranging from discreet software
entities, through to complete microprocessor based solutions.

Will ART sell computers to the public?
ART will be selling its products through either the Acorn Education
distribution organisation, or through its Value Added Resellers which again
will then pass their products across to the public.   It does not expect to
sell to the public.

Who do I talk to,  Acorn Education or ART?
Most customers will be handled in the first place by Acorn Education, apart
from high technology companies wishing to embed ART software or hardware in
their designs. Acorn Education has the sales support and tracking
infrastructure to ensure management of large numbers of people. The
relationship between ART and Acorn Education should ensure a higher level of
service between both organisations.

Why should I keep on developing for Acorn platforms?
With the installed base of RISC OS computers in education and in other areas
and with the committed development plans that ART has, there is a
substantial business for developments, upgrades and sales of new products to
both new and future customers.   ART's product strategy will allow
developers in future to take advantage of some of the new technologies that
are now appearing and are under the control of major vendors, such as IBM,
Apple and others.   ART will be able to guide software developers in the
best way to maximise these benefits and Acorn Education will offer an
excellent channel to market for their existing and future products.

There is no future in Acorn products?
Again, due to the installed base, the future business plan and use of new
technologies in the future, users and software developers' perception of
Acorn products should be that of a smooth continuum.  We anticipate a
development programme based on Risc PC and its successors that will give
customers a forward visibility for at least 5 years.

How will ART help my business?
ART, because of its strategic mission to produce licensable products for use
by other manufacturers as well as developing its own products, requires a
constant source of good ideas and technologies to incorporate, so any
software or hardware organisations that have ideas relating to ART's
business strategy are encouraged to approach ART with collaboration,
co-development or licensing agreements.

Who will support the products I bought?
First line support for all products will be provided through Acorn
Education.  They have a direct link with the technical specialist in ART to
provide back-to-back support.

Do I have to meet style guide or quality guidelines?
ART expects software houses to adhere to standards broadly supportive of the
ISO 9000 approval process and would expect software houses to comply with
whatever engineering or style guide documents are relevant at the time.   A
level of commercial practicality has to apply but with the caveat that we
expect people to follow style guide and quality guidelines.

What core skills does Acorn Education have?
Acorn Education is predominately a sales service and support organisation
focused around the education market, therefore its skills are a deep and
thorough understanding of education, an organisation committed to service
and support and the necessary business management and sales and marketing to
assure it of its commercial viability.

What core skills does ART have?
ART is a new organisation.  It has a detailed and thorough understanding of
a number of ARM, RISC OS and Acorn based technologies, along with the
necessary commercial and administrative support functions to allow them to
deliver products and service customers.

What Intellectual Property Rights (IPR) does Acorn have?
Acorn's intellectual property is contained in both its historical
developments and some of the new research and development programmes.  This
covers a number of areas ranging from video image and sound renderers and
Codecs, through a small, robust operating system, "microprocessor type"
interfaces and a variety of products derived from our historical,
developments.

Will Acorn still offer developer support or is this only for educational
developers?
There will be a dedicated service and support organisation for all
developers within Acorn Education.  This will be a sub-group of the wider
service and support organisation and this group will have back-to-back
access to ART for resolving operational queries or issues.

What about situations where Acorn has intellectual property that it has
acquired from third parties?
ART will obviously acknowledge all its legal obligations.  ART will use
third parties with their intellectual property wherever appropriate and seek
some active and open environments for this to happen.

Will there be an official launch of ART?
ART is already in business, today.  We will be spending some time in the
next few months explaining ART, its roles and its relationships, to all
interested and relevant parties.

How will ART and Acorn Education interface?
ART and Acorn Education will interface via a set of formal agreements,
outlining product strategy and product requirements.  In return ART will
deliver the specified products and projects.