Founded in 1973, Shugart Associates was purchased by Xerox in 1977. In the early 1980s the name was changed to Shugart Corporation. Xerox exited the business in 1985 and 1986, selling the brand name and the 8-inch floppy product line to Narlinger Group (Mar 1986). Narlinger promptly rebranded itself as Shugart Corporation and continued as such into the early 1990s. Under Narlinger management, Shugart acquired several discontinued product lines such as the Optotech 5984 WORM drive.
Alan Shugart, after a distinguished career at IBM and a few years at Memorex, decided to strike out on his own, and in 1973 he gathered up some venture capital and started Shugart Associates. The original business plan was to build a small-business system (similar to the IBM 3740) including the development of all of the major components, including floppy disk drives, a printer, etc. After two years the seed money was gone and Shugart had no product to show for it. The Board wanted to focus on the floppy disk drive but Shugart wanted to continue the original plan. Official company documents state that Shugart quit, but he tells the story another way, that he was fired by the venture capitalists. Shugart went on with Finis Conner to found Shugart Technology in 1979, whose name was changed to Seagate Technology in response to a legal challenge by Xerox.
In 1976, Don Massaro, Shugart President, and Jim Adkisson, a Shugart sales manager, sat down for lunch with a customer who complained that the 8-inch drive was too big for the personal computers then emerging in the nascent S-100 market. When Adkisson asked what the size should be, the customer pointed to a napkin on the table and said, "About that size". They returned to the Shugart lab with the napkin and designed the 5¼-inch minifloppy drive, introduced in 1976 as the 110KB SA-400. The SA-400 and related models became their best selling products, with shipments of up to 4000 drives per day.
In the early 1980s, in order to avoid development and start-up costs, the company turned to Matsushita Communications Inc., a subsidiary of Matsushita, Japan, for its half-height 5¼-inch drives, starting that company on its way to becoming the largest floppy drive manufacturer in the world. In 1985, in order to resolve an inventory accumulation and as part of its exit strategy, Xerox gave up Shugart's exclusive rights to the Matsushita half-height 5¼-inch floppy disk drives.
In 1979, Shugart Associates introduced the "Shugart Associates System Interface" (SASI) to the computing world; the interface subsequently evolved into SCSI (Small Computer System Interface), and has gone on to change the face of storage. The first standard process completed in 1986 with ANSI standard X3.131-1986 (popularly known as SCSI-1) as the result.