The future of Alesis

After acquiring the Technology Pioneer, Numark CEO Jack O’Donnell outlines his plans for the company.

As vice-president of sales and marketing for Stanton Magnetics and Picketing, two of the leading phono cartridge brands, Jack O’Donnell was one of the first to recognize the potential of the DJ market. Cassette tape and later CDs sent turntable sales into a tailspin. However, O’Donnell managed to soften much of the blow by aggressively catering to a growing DJ market. In 1990, he simultaneously helped persuade Vestax of Japan to create a line of DJ mixers and established U.S. distribution for the product.

Numark Electronics, one of the pioneers of the DJ market, ran into acute financial problems in 1991. While most industry observers gave the company up for dead, O’Donnell saw great untapped potential. In 1991 he acquired the company. Last year, Numark posted sales of $37 million. When Alesis Corp. filed for Chapter 11 in May, O’Donnell stepped in, initially providing cash to keep the company going, and then acquiring the company’s assets outright.

Alesis burst onto the scene in 1985 with a line of high-value signal processing products that utilized RISC (Reduced Instruction Set Computing) technology. In 1991, the company virtually created the project studio market with the introduction of the ADAT digital multi-track recorder. Over the past few years, the ADAT lost market share to newer hard-disk-based recording products and Alesis was forced to dramatically cut prices. Declining sales ultimately coupled with operational ineffiencies pushed the company into Chapter 11. Alesis is in a turnaround situation, but O’Donnell is confident that the company can be restored to its former position as a cutting-edge industry innovator. “I was grateful for the opportunity to acquire Numark, and I’m equally grateful for the chance with Alesis,” he said. In the following interview, he elaborates on why he is optimistic about the future for Alesis.

What was it that attracted you to Alesis in the first place?

Jack O’Donnell: Alesis has great technology. Several months prior to the NAMM show, before I had any idea they were having any financial difficulties, I approached them about using some of their technology. I was very impressed with the AirFX unit and some of their chip technology, which I felt could be integrated into the Numark product line. We were in contact on a number of issues, and then the talks just went cold. After not hearing from them for a couple of weeks, they approached me about an infusion of cash to bring them forward. Looking at the core group of engineering talent and the products on the drawing board, I thought it was a great opportunity.

Are you planning to fold the Alesis organization into Numark Electronics, or will it continue as a stand-alone operation in Santa Monica, California?

JO: Alesis will definitely remain as a stand alone company. At some future point, we might consolidate financial, credit, and logistical operations, but I don’t want to dilute the Alesis engineering and sales and marketing effort. The best ideas come from sales and marketing people talking to end users. To get this kind of input, we need a core group focusing exclusively on Alesis. I have great confidence in the people at Alesis. They are one of the major assets that made the company successful in the past.

Will Aiesis founder Keith Barr continue to be involved with the company?

JO: We’re still talking, but at this point, his future with the company hasn’t been determined.

While the ADAT has been the highest profile Alesis product, the company has also been involved in the keyboard, mixer, and signal processing markets. Are you planning to continue addressing all these market segments?

JO: We are planning to remain in all the markets we are currently involved with: recording, keyboards, signal processing, and speakers. Actually, I would like to make the line even broader. The Alesis semi-conductor division has developed chips that haven’t been fully capitalized on. I look at some of these chips that are on the drawing board and I can envision all types of new product categories that we could tap into.

Could you elaborate on some of the new product categories that are under consideration?

JO: I wish I could, but right now it’s premature.

The Alesis ADAT HD, the hard-disk successor to the successful ADAT tape recorder was introduced at Winter NAMM. Do you plan to go forward with the product?

JO: The ADAT HD was certainly one of the strongest products that was introduced at the NAMM show. If it weren’t the financial difficulties at Alesis, it would probably have been in the market by now. We are very optimistic about the product and I fully expect to have it in the market very shortly.

Even though you plan to maintain Alesis as a stand-alone operation, do you envision any points of cooperation between Numark Electronics and Alesis?

JO: Alesis is dedicated to the recording musician with no particular interest in pursuing the DJ market. However, some of their core technology is applicable to Numark’s customer base. Just as we’ve partnered with Korg to include the KAOSS pad controller on some of our DJ mixers, I can seem incorporating certain Alesis products. The Alesis AirFX is a perfect example. It’s great technology, it’s value priced, and it has an interactive format that is a natural for DJs. On a less obvious level, the Alesis Semiconductor division is producing some outstanding chips that are waiting for broader applications. Some of the chips that have been designed for Alesis products are also applicable to some of the ideas we have for the Numark product line. So to answer your question, Numark and Alesis will be separate product lines with distinct identities, yet there will definitely be some technology cross over.

Are there any OEM opportunities for the Alesis semi-conductor division?

JO: People are just waking up to how versatile and inexpensive Alesis chips are. Right now, almost all the chips are going into Alesis products. However, we have some very well-known OEM customers within the industry. We haven’t fully exploited this business yet, but I think there is tremendous potential.

Introduced in january , the Alesis ADAT HD is a hard-disk based replacement for the ADAT. “We are very optimistic about the product and I fully expect to have it in the market very shortly,” says Jack O’Donnell.