Originally published in Business Digest, November 1995

Bertil Agell Beats the Five-Year Bell

When the business began in 1989, an Intel-based 386 computer was top-of-the-line, and went for upwards of $4,000.

by Craig C. Bailey

In many ways it's appropriate that Bertil Agell would end up co-owning Applied Micro Technologies Inc., a computer sales and service business in Barre (Vermont, USA). The computer industry, where change seems to be the only constant, could be a metaphor for his life.

Agell came to Vermont from his native Stockholm, Sweden, by way of New York, the Virgin Islands, Florida and Long Island -- changing his address nearly as often as he changed his job. He first set foot on U.S. soil at the age of 25 in 1957. A recent gradate of the Högre Teckniska Läroverketthe (Higher Technical Institute) of Stockholm, he began to put his science degree to work as an application engineer in Stockholm at Ab Sevenska Fläktfabrikenan, an international air conditioning, heating and ventilating firm. A few months into his new job, the company offered to send Agell to its New York City branch at the corner of 42nd Street and Lexington Avenue. He jumped at the chance to learn a new language and the intricacies of the American market, and move to the Big Apple with his first wife, Gun.

What was supposed to be a one-year educational stint has turned into a lifetime adventure.

Nearly 40 years later, Agell has been comfortably assimilated into his surroundings. If not for his accent -- imagine a gentler Arnold Schwarzenegger, and the Saab parked out front, perhaps a bit of Swedish brand loyalty -- you'd barely guess he was an out of towner.

Warm and occasionally whimsical with a genuine, hearty laugh, he's happy to show off his small shop consisting of a handful of rooms, and delights in revealing his secret: Applied Micro Technologies is located in the former office space of badboy lawyer Joseph C. Palmisano. "Some of the very dealings took place right here," he says, conspiratorially. Hooks still jut out from the walls where the lawyer hung his wild game trophies. An empty, nondescript video surveillance turret still hangs from the ceiling -- an icon of a different line of work that apparently required a higher level of security.

Agell speaks of his decision to relocate to America as a simple one, though his father was against it. "In fact, I happened to run across an old letter from him, saying that I should reconsider staying in this country because the opportunities in Sweden are excellent," Agell says, quietly. "I didn't agree." He explains that his choice was peppered by "a sense of more freedom to gamble on things -- to do more venture type of stuff," without the financial restrictions he sees as inherent in the Swedish system. While social services in his native country are extensive, they are also expensive. "In this country, companies pay roughly 7.5 percent (for Social Security). In Sweden, they pay 40 percent," he explains. "The total price for an item includes 20 percent sales tax. Then you have income tax ... This country, certainly in the '50s and '60s, didn't have anything close to that."

Not long after moving to America, Agell and his wife began their first entrepreneurial venture: owning Harbor View, an inn and restaurant located on St. Thomas in the Virgin Islands. "We thought it'd be a way to save our marriage ... to work together," he offers. By 1961, just two years later, his innkeeping career ended, along with his first marriage. Agell moved back to New York.

There he began his association with shipping, a field he would remain involved with for some years. As a project manager for a small, American engineering firm in Queens, he worked on a project sizing cargo lines for tankers, and installing ventilating systems. But soon, the urge to start a business called again, and by 1962 he found himself returning to the Virgin Islands to create Carib Gas, a propane gas company serving St. Croix and St. Thomas.

In 1965 he sold the company to National Propane, which employed Agell for nearly 10 years, first in St. Thomas, then Florida and later Long Island, where he met and married Gladys Nemeroff, who is now director of the art therapy master degree program at Vermont College in Montpelier. Agell completed his master's degree in business at Adelphi University, while working on Long Island. At the same time, the couple bought a second home in Topsham, in which they still live.

By this point, a pattern becomes apparent. "Five years happens to be my limit," Agell jokes of his reluctance to grow roots in his earlier years. Shortly after completing his master's degree, he made another move. "We moved up to Vermont lock, stock and barrel -- without a job," says Agell.

Though he planned to renovate an old farmhouse he purchased close to his Topsham home, he quickly discovered the difficulties of working without pay. He chose a job at the now-defunct Jones Brothers granite company, followed by a position as treasurer of the Quechee Land Owners' Association, a short tenure in state government, then work as the first executive director of the Central Vermont Economic Development Corp., where he was instrumental in attracting Karl Suss into Waterbury and Bombardier to Barre. After time back in New York working for a former associate's propane business -- "The five-year bell rang," Agell quips -- and a period as general manager at Waterbury record distributor, Silo, he began negotiations with his future Applied Micro Technologies partner, Tom Stark.

Stark, a California transplant, had been living in Vermont for some 25 years. He came to know Agell through his involvement with the Small Business Network, a peer discussion group of local business people, and his work as a manager with Bombardier. Stark had been operating Barre Data Systems for about five years, when Agell approached him with a proposal to become partners.

"I wasn't really looking for a partner," explains Stark, who's held tenures with General Electric and NASA. But "it was nice to have somebody who could handle the business end while I handle the technical end ... I get very bored with the mundane paperwork." Stark spends a typical day up to his elbows in computers, and is more than happy to let Agell handle the business side. "I enjoy the hardware end of it," Stark explains.

In early 1989 the two formalized the deal, changed the company's name to Applied Micro Technologies and moved into Palmisano's former office on Washington Street, Barre, where they still operate, along with technician Mike Petrochko and assistant Lisa Crowningshield.

But how things have changed.

When the business began, an Intel-based 386 computer was top-of-the-line and went for upwards of $4,000. Today, a Pentium chip system -- several times more advanced than the 386 -- is top dog, and runs in the neighborhood of a comparatively inexpensive 2,000. What's a local computer vendor to do? Increase sales to counter the shrinking prices and margins. "Just to stay even, we have to triple our volume," Agell says. It's a challenge he claims the company has met.

Sales of custom-made computers and assorted peripherals make up about two-thirds of Applied Micro Technologies' business, with the rest consisting of service work. The company services many makes of computers, including those from large mail-order firms the names of which (Gateway-2000, Dell, Compaq) seem to leave Agell uncomfortable.

In an age of toll-free phone calls and overnight shipping, competing with the big boys is crucial to a local firm's survival. Agell emphasizes the local support his company offers, which those mail-order firms can't. "We deliver, we install and we do onsite service ... If you order from a mail-order company, you get a box and if it doesn't work you can spend a lot of time on the phone with tech support," he says. "Compaq comes out with a box, and it's equipped as a unit and that's it. To add anything, it is very difficult ... Our product's more flexible." Though Agell says that for the simpler computer requests, it's difficult to match the mail order firms' prices. "If you're going to buy a standard item, and don't care much what's going to happen to that thing in the future, we cannot compete," he concedes.

One topic Agell is somewhat cool on is the Internet, the world-wide network of computer networks. In the summer of 1994 he looked into becoming an Internet service provider (ISP) for the Barre-area -- providing individual and business subscribers with access to the Net. It was a venture he rejected. "I couldn't see any money being made in it," he explains. "The numbers didn't come out right." Agell feels an ISP would need many more individual subscribers to such a service than the area could support, and that any real money to be made in such a venture would be in providing full-time, dedicated access to business clients, a market he also sees as lacking in the central Vermont area.

Agell's casual about the future of his company. An unsuccessful expansion with a Montpelier branch on State Street a few years ago has left him leery of the prospect of opening another store. "I think we stay where we are -- making a living, having a good time ... In this industry, it's not difficult to stay at a certain size and still grow. You grow in knowledge, you grow in equipment. ... That's the growth we undergo all the time. You don't have to grow in size," he explains.

Agell seems to be happy where he is. If he has any intention of answering the "five-year bell" and taking off to the Virgin Islands again, it doesn't show.

Besides, he's already a year late.