NeXT UK Overview

NeXT UK is the runt of the NeXT Europe litter, trailing well behind France and Germany in sales volumes. That is the brutal truth; I'm going to try to explain, from my perspective, why that has happened, and give you a whirlwind tour of the NeXT scene in the UK while I'm doing it.

NeXT have installed around 50,000 systems worldwide, more than half of these in the United States. About 8,000 were 030 cubes, sold in the States. That means that we can estimate roughly 15,000 in Europe and Japan. 1991 sales were $127.5 million, and 50,000 machines (yes, they sold 8,000 030 to 040 upgrades!), up on $28 million in 1990. 43% of 1991 sales were in Europe and Asia. One source says that 3,000 maxhines went to Japan in 1991.

I would estimate UK NeXTs installed at about 700 machines, and selling at the rate of 50 plus each month. This is pretty low, especially compared with the rest of Europe.

This could be because NeXT UK and NeXT Europe is a very new entity. NeXT (UK) was set up in October 1990, but only really started when the majority of people started with NeXT, in January and February 1991. NeXT (UK) report to NeXT Europe in Nice, France, who in turn report to Redwood City. Control from NeXT Europe is very strict.

NeXT UK consists of eight people. Until recently, the operation was run by Richard Strong, Managing Director. Replacing Richard in February after a flying visit by Steve Jobs is Gregor Bailar, formerly European Technical Manager. Reporting to Gregor are two salesmen, Steve McCarthy and Sue Taylor; two support, Paul Burford and Martin Reed; Helen Stroud, Marcomms Manager; Cathy Steele, Admin Manager; and Alexia Monroe. AT the same time as Gregor, Ray Schaff was moved back from NeXT Europe as Sales Manager. NeXT UK are currently advertising for five and more new staff. A few of the roles are filled by temporary workers borrowed from NeXT Europe; all of the training, for instance, is done by NeXT Europe. Officially, NeXT UK isn't even responsible for technical support, although one of the jobs advertised was Technical Manager.

Swimming in the Channel

Sales before the end of 1990 were handled from either Europe of the USA. At that time, NeXT UK was established, and Businessland were appointed as their exclusive distributor, ready to handle all of the 'dirty hands' work in the UK. However, as we all know, the Businessland deal went sour. So NeXT appointed P&P (originally Pete & Pam, who were early distributors for Apple) in only April 1991. P&P set up a division called NeXTdimension to handle all things NeXT, from NeXT hardware, to add-ons, to third-party software. In August 1991, NeXT announced that P&P would no longer sell NeXTs. And now, in March 1992, NeXTDimension is finally running down all stocks, and finishing with NeXT specific items altogether.

These constant shifts in channel structure haven't gone down so well with the resellers. According to Shaun Thomson, Managing Director of Mosaic, " it is like walking on quicksand, NeXT keep changing their philosophy".

As part of the general market strategy, in January 1991, NeXT UK announced an architecture of large NeXTCentres (note the English spelling, and the similarity in name to AppleCentres), supporting several small, specialist NeXTPartners. NeXTCentres would commit to training and guaranteed sales (10 machines per month), and in return get higher commission rates (up to 50%) on sales. NeXTPartners would have some specialised expertise, such as publishing, or City of London experience. They would only get 25% commission, and would be assisted in NeXT know-how by their NeXTCentre.

At the moment, it seems that no one can meet the sales requirement to be a NeXTCentre, but equally no one wants to be a NeXTPartner with a NeXTCentre breathing down their neck and 'taking over' customers. NeXT don't seem to be pushing the point, to be fair.

In the same way as NeXTPartners, Campus Consultants are also associated with a NeXTCentre, who has to provide them with their loan machine and support. Since the program started in September, machines are only just now finding their way to the Campus Consultants.

Most of the resellers that are also Apple dealers. According to NeXT, that isn't actually a requirement; it just looks that way. NeXT also say that they look for resellers with some Unix expertise in house. In fact, not all have much Unix experience, although there is an element of Unix training in their backgrounds. When I asked resellers why they had chosen to sell NeXTs, there was little disagreement. Graham Brown, Sales Director of Sign Express, A NeXTCentre, said "development time is dramatically reduced with NextStep." Shaun Thomson said that "I initially saw them as high-end Macs", and Fay Smithson of Topazlane, an early Apple dealer, said that her husband and business partner Freddy Smithson "was as bowled over as when he first used an Apple".

The analogy to the early days of Apple was commented on by several people. Chandra K Shah, Managing Director of Nexthaven, who are part of the Callhaven group, possibly the UK's largest Apple dealer, "NeXT are where Apple was when all they had was the Mac Plus with no SCSI drive and an expensive laser; they knew there was a demand, but couldn't put a finger on it". Like the early days of the Macintosh, image and ease of use are important for sales. Chandra K Shah said "Next is easier to use, a really powerful machine. Everyone who sat down and saw the machine wanted to buy one". Peter Palmer, Marketing Director for PPA, another NeXTCentre (who have just gone into liquidation), thought that "NeXT is the Bang & Olufsen of the computer industry".

How do we get NeXT computers?

When you buy a NeXT, it is ordered from the amazing automated NeXT factory in Redwood City, in California, via NeXTlogistics in Amsterdam. From Redwood it is dispatched to Amsterdam, from where it will be shipped to your door. Amsterdam seem to batch orders for shipping mid-week to the UK, although I have heard reports of urgent orders being filled faster than this. This means that the absolute minimum time for an order to be delivered is one week, and most orders will take two weeks or more. The resellers say that they expect a six week lead time for any orders. I have heard stories of one customer calling round all the resellers before ordering a machine. He placed his order with the one that promised the fastest delivery (they lied, they were all chasing one machine in stock in Amsterdam).

No reseller has any stock of NeXTs, they all seem to have no more than one or two machines for their own use; and Amsterdam seems to have only a small stock of small configuration NeXTstations.

The automated factory may be capable of manufacturing to order and shipping in record time in the USA; but it doesn't give a good impression to overseas customers. In fact, the picture of manufacturing efficiency becomes one of inflexibility. The good news is that if you ask for an unusual configuration, you will get in made to order for you in good time; the bad news is that it takes just as long for standard configurations to arrive. The original plan was for one large distributor (first Businessland, then P&P) to hold stocks, and order custom machines. Now that the channel structure has changed to a mob of small resellers, all ordering via NeXT UK from NEXTLogisitics, this plan has fallen apart. NeXTLogistics are supposed to hold stocks, but I haven't heard of any orders being filled in a short enough time for this to be likely.

All of the resellers are worried about this. As far as they are concerned, it is the responsibility of NeXT UK to arrange for adequate supplies to meet sales demand. I keep on hearing disappointed tales of dealers being offered cash if they can deliver a machine the same week, and having to pass it up. If anyone from NeXT can remember the old Apple "test drive a Mac" campaign, that broke down sales resistance to Macs by making it easy for a potential buyer to relax with a Mac. At the time, in 1985, a standard Mac configuration was £2,500, surely more in real terms than a NeXTstation is today?


Depending upon the exchange rate, a NeXT will cost you 13% more before tax than in the US. This is pretty good compared to other workstation vendors, like Sun and Apple, who stick with the traditional "£1 equals $1" exchange rate, making their prices 50% or more higher in the UK. However, Value Added Tax (VAT) is charged at 17.5% on top of this. So however you look at it, a NeXT isn't such a bargain (compared to disposable income) as it is in the US; at least it is cheaper than other workstations.

One of the biggest worries has been educational pricing, but I hope that Nigel has covered that in his article. From what I have heard, our educationalists are much happier now that there is an official discount structure for education purchasers. This is a recent introduction.

Who are the buyers?

A couple of the resellers focus on higher education. They see, like Mosaic and Topazlane, that the higher education market in the UK will buy new and better technology. According to Fay Smithson, Topazlane sell to people who have "done everything that you can do with a Mac; want to go on to something bigger, better and faster. NeXT goes on where the Mac leaves off." Both Topazlane and Mosaic have set up Campus Consultants in three of the Universities each.

Nexthaven have only one market in mind: "we are based in the City [of London], targeting London office of companies who have taken on NeXT in Wall Street", according to Chandra K Shah. Document imaging and multimedia applications to legal offices and publishing is a common target. Most resellers were interested in publishing and graphics, as that was a strong area for their Apple sales. However, the lack of a full-scale DTP package for NeXT was holding them back.

Selling NeXT to large organisations specifically for developing a single application was seen as a viable market. A trained developer can build an application on the NeXT in less time; the total cost of a solution running on a NeXT will be an order of magnitude less than on a Sun, a Mac, or on a PC with Windows. The application learning time will be less, and once several NeXTs are installed, they can start to multiply.

What are NeXT doing to reach buyers?

When NeXT (UK) opened operations in February 1991 (when they had people, rather than when they were officially opened), there were over 30 outstanding requests for press loan machines. According to NeXT, that demand has now been satisfied, and there is a constant flow of positive editorial comments made in the UK computer press. The Unix columnist for Personal Computer World, the only one in any of the UK's specialist computer press, first laid his hands on NeXT this February, so the flow of press support isn't as good as NeXT would like to claim. As in the USA, there have been very few advertisements, all in the computer press. These only started in September 1991. NeXT only attend exhibitions when invited to share a stand with Sequent, who want to show NeXT off as a powerful front-end to their systems.

Some mailshots have been used, for instance an October mailing was sent to software companies in an attempt to attract more developers. Unfortunately, this very tightly focused marketing approach, directed only at potential buyers, avoids improving NeXT's image in the UK. Many of the earlier purchasers of NeXTs need to hear more from NeXT (UK), and need to be told that they made the right decision. According to one developer, NeXT's approach to marketing in the UK is "stealth marketing".

In light of this, I found a quote from Richard Strong on his departure from NeXT rather disturbing: "There's less and less room for the kind of marketing based management I'm responsible for. It's time for NeXT UK to switch to more technical leadership."

How successful are NeXT (UK)?

It is no surprise that the UK economy has been harder hit than most by the recession. This has undoubtedly held back growth of NeXT in the UK. According to Shaun Thomson, "Germany has an economy and we (the UK) don't at the moment". Although NeXT are reluctant to give out sales figures, it would seem that sales in the UK are trailing behind those of both Germany and France. It is generally understood that there are about 50 machines sold each month in the UK, in a good month, although there are signs that this is starting to rise.

NeXT see the dealer channel as one of their biggest problems. Almost all of the dealers are AppleCentres, with limited development experience, and limited Unix exposure. I couldn't find out why this was, but it could possibly be a NeXT Europe policy that just doesn't fit the UK market. Potential customers are contacting NeXT directly when dealers can't answer their questions.

The fact that NeXT(UK) has only eight people is a concern. This just isn't enough to cover the demands of this market, and a larger staff, with a larger marketing budget, would allow NeXT to be taken seriously. For a company that isn't losing money, very close attention is being paid to cash-flows.

For Shaun Thomson, this affects support: "because NeXT UK are so small in numbers of people, they may just not be there". But when they are, the support available is excellent. Fay Smithson said that support "is good to excellent; but NeXT need to get their act together on running day to day." Even Chandra K Shah had to say that "NeXT UK are chronically understaffed for what they are trying to do, but they don't have responsibility for distribution."

Another developer said "Individually, NeXT are some of the most knowledgeable and helpful people in the industry; but get them all together and nothing happens".

Kill or Cure?

Reading between the lines, NeXT UK could be doing a lot better, but they are held back somewhere in the chain of command. Everyone seems to "know" what the problems are, and even recognise that there are problems; but no one seems to want to own the problem. There are symptoms of cash shortages, and a lot of finger pointing at dealers' lack of expertise. To me (the MBA talking), I wonder why there is nobody prepared to stand up and solve the problems; perhaps there isn't enough flexibility in the reporting structure to allow NeXT to take action. The management changes could be the best thing to happen to NeXT UK, and strike at the heart of the real problem.

Making sure that informed people are in front of the customers is NeXT's burden, not the resellers. If the dealers aren't up to scratch, train them or get new dealers. Trying to run a sales organisation in the UK, when a bunch of strangers in the South of France are in charge of training and support, is curious at best.

It is very early days for NeXT in the UK. The channel structure is still not established, and there is effectively no visibility of NeXT. That is improving, but only very slowly. The biggest hold-ups are due to lack of people, and lack of marketing budget. Sometimes you have to invest a little to get more money back.