Bell Micro Celebrates 20 Years of Storage, Jelly Beans And Race Cars

Don Bell, president, chairman and CEO of Bell Microproducts, founded the distributor in 1988. This year, the company, now $4 billion in annual revenue, celebrates its 20th anniversary.

Here's an early group shot at the company's San Jose, Calif., headquarters.

"Judging by the open collar and frizzy hair of the guy sitting down, that had to be in the first couple years of our founding," Bell said. Early vendors included Wyse, NEC and UMC, a Taiwanese semiconductor foundry.

"Back in those days, we were really doing semiconductor business with few computer products," Bell said.

Here's the cover of a Bell Microproducts prospectus for the company's IPO in June 1993. After opening at $7.50, the stock has reached a high of $45 and split 3 for 2. Today, it's down around $2 and the company was recently delisted by Nasdaq for not meeting deadlines on past-due financial reports. Don Bell said the company is making progress towards reinstatement.

"It's terribly upsetting. We think we're worth a lot more money," Bell said.

From left, Phil roussey, Bob Sturgeon, George Smith, Don Bell, Bill Smith and Jack Holman, circa 1998.

"At that point, we had a contract manufacturing business. It seemed like a great idea at the time. It was a great idea at the time," Bell said. "But somewhere around that time, Solectron started scaling and margins went from 25 percent to 5 percent. We made the decision to divest. It was the smartest thing we ever did to get out of it and stick to what we do best. We're much better at the distribution segment of the business."

Bell Micro passed the 50 million mark for disk drives shipped in 2006 and added another 18 million last year. It expects to reach the 75 million mark by the middle of 2008.

A Bell Micro associate handles a disk drive. In addition to shipping drives, Bell Micro "touches" more than one million drives in the United States each year, Bell said.

"Storage and disk drives are one of our key strengths. We do a very good job adding value to disk drives. From changing firmware to downloading software to physical modifications, it's all done on a custom basis. We do testing and screening too. That's a very good business for us," Bell said.

Bob Sturgeon, executive vice president of operations and IT, in an older photo.

"Bob's the anchor in the company. He makes the operations run, the IT work. He's a one-man fix it guy. He's done so much to enable the tools and operations of this company that it's hard to describe. He turns the crank and makes us what we are," Bell said.

Bell Micro created a comic-book character, Purchase Agents Man, for an early advertising portfolio.

"We tried to portray that we give you more technical support, that we are the specialists that know the lines. It was a parody on James Bond, who was big at the time. Our point was we work with you behind the lines," Bell said. "We even came up with a song. It's so hokey, it's kind of fun. We bought the rights to use the "Secret Agent Man" song. We did a song and distributed around to people. At the time, we couldn't recruit people because we were new. We found out our competitors were playing our song in their sales meetings. Recruiting got a lot easier after that."

A jar of jellybeans is familiar to many Bell Micro customers. Since the beginning, the company has given out jars of Jelly Belly jellybeans, Bell said.

"When our sales people come in, they fill the jar. Our slogan was 'We give you more than jelly beans,'" he said. The company still gives away jelly beans today.

The cover of a late 1990s Annual Report shows the "maturing" of both the company as well as its executives. From left: George Smith, Bob Sturgeon, Don Bell, Bill Smith and Phil Roussey.

Jerry Kagele, president of North America distribution.

"Jerry joined the company four or five years ago and has worked his way up. He's done a great job," Bell said. "He's gone further to solidify our leadership in storage."

Jim Illson, COO and president of the Americas.

"Jim joined us about 5 years ago as CFO and worked his way to COO of the company. I tried to recruit Jim when he was at Merisel. Then he went to Wareforce, which was later bought by PCMall. He's contributed greatly to the growth of Bell Micro," Bell said.

Phil Roussey, one of the founders of the company previously worked with Don Bell at Kierulff Electronics. Bell left the company and it was later sold to Arrow Electronics.

"When Bell Microproducts opened its doors on Jan. 25, 1988, Phil joined us immediately. It was fun and games," Bell said.

Pictured is Alex Job Racing, sponsored by Bell Micro.

Bell Microproducts has been an active sponsor of auto racing for many years.

"We bring our customers in. We've made it a fun thing within Bell Micro," Bell said. Last month, the distributor invited 144 guests to a race in Florida.

In addition to customers, Bell Micro is involved with Racing For Our Heroes, an organization that brings wounded veterans and guests to races.

"We take them right out of Walter Reed [Army Medical Center] and Brooke [Army Medical Center] in San Antonio for a weekend away. They're part of our event, part of our team for the weekend," Bell said.

Bell Micro also is sponsoring an LPGA event in Mobile, Ala., in September. "We do sports and other events to say thanks to customers," Bell said.

Bell himself has been racing for 35 years.

Graeme Watt, president of Bell Micro Europe, joined the company about four years ago. Bell Micro has had profit issues in the region, but Bell said Watt had worked hard to remedy the situation there.

"Graeme has done an amazing job to get the area performing much better, even if it's a tough market. He's one of the best guys in this business," Bell said.

Pictured is Leo Leonardo, president of Bell Micro Latin America.

"We bought Lou's company, Futuretech, to be able to grow the company in Brazil, Chile, Mexico. We tried to recruit Lou for a long time before we just bought the company," Bell said.

Pictured is Frank Law, president of TotalTec Systems Inc., a solution provider that Bell Micro purchased in 2001.

"It's been highly compatible with Bell Micro. There is a wall between the two. It's added great, strategic vision and synergy. We've been able to leverage them to help our other customers. It's not been a conflict for us," Bell said.

Pictured is Joe Swanson, recently promoted to president of Rorke Data.

"We've grown Rorke from less than $30 million to exceed $60 million this year in storage systems. They're heavily integrated storage solutions for the medical and video editing and surveillance markets," Bell said. "Joe was the sales VP at that time. Herb Rorke was the CEO. He retired three years ago and we made Joe VP and GM. He's done a great job and we appointed him president about a month ago."

Pictured is Prosys Information Systems, led by Michelle Clery and Bruce Keenan.

Bell Micro talked with Prosys for about five years before finalizing a deal to buy the solution provider about a year and a half ago, Bell said.

Like all the groups, Bell Micro has retained the companies' names and let them run autonomously.

"Rorke Data has a particular niche that it serves well. They also sell a lot of our Galaxy line of storage systems. We wanted to make sure we kept the distance between the distributor and reseller businesses," he said.

WHAT LIES AHEAD

"It's been a great amount of fun. We've built $4 billion company. We've done it 50 percent through acquisitions, 50 percent through internal growth," Bell said. "On one hand, it seems like yesterday, and easy. On the other hand, it's a tougher biz today than ever before and it requires people to do far more and be far better than 20 years ago. I can only assume that will continue in the future. Consolidation is the name of the game. In this business, you need to be a buyer or a seller. We've been a buyer. We're optimistic that as competition gets fewer in number, that the survivors will be healthier. We know it will continue to be competitive.

"We once had the term 'Purchase Agents Man,' and I was telling somebody the other day, there are no more purchase agents now, just buyers. Customers have torn down the infrastructure they had. Everybody is under cost pressure. That will continue as we go forward to work on efficiencies. The key to survival is to be a specialist, to continue to add value and differentiate. That's really what makes Bell Micro successful."