One of the key indicators of a company being worth the hype that surrounds it in the world of e-commerce is the role it plays in the grand scheme of Internet business.
Think of the gains made by shovel and pan sellers during the US gold rush. Likewise, those who have most to gain from the Internet are the companies building the highway, or infrastructure.
This message was reinforced at the Cork operation of data storage company EMC last week when president and chief executive, Mr Mike Ruettgers, cited independent survey after survey which placed EMC among the highest performers in the technology industry.
Data storage protects, manages, shares and stores the data generated by computer activities. It is recognised as a priority for organisations to centralise this activity, so information can be easily sourced.
EMC has specialised in this area for the past 20 years but ran into difficulties in 1988 when it began shipping faulty disk-based storage products. Then a $100 million (€97 million) public company, its founder Mr Dick Egan hired Mr Ruettgers from Raytheon where he had helped design and build the Patriot Missile.
Mr Ruettgers recently told a British journalist that on his first day at EMC he distributed airsickness bags to his assembled colleagues. Raising one of the bags, he told them: "The quality of our products makes me want to puke".
The company's fortunes have improved in the decade since. When he became chief executive officer in 1992, profits were $30 million; this year they are expected to top $1 billion. Over the same period sales have risen from $386 million to an expected $5.8 billion this year.
EMC's presence in Ireland has doubled since 1996 to just more than 1,000 staff. Initially set up as a manufacturing centre for EMC in Europe, this now accounts for only around 7 per cent of the Irish operation's activity. Newer functions include finance, customer support, information systems and international logistics. The latest addition is a research and development unit which employs 40 people in software development.
Meanwhile, EMC's share price has practically doubled in the past year to $74. So what is driving this performance?
Insecurity apparently. The world's leading organisations now see data storage as central to their overall IT strategy. A recent FIND/SVP survey found that 40 per cent of companies believed information storage to be the foundation of their company's IT infrastructure.
The 25 largest banks in the US use EMC for their storage needs, along with most of the largest ISPs in the world, and 95 per cent of Fortune 100 companies.
In the late-1980s, IBM had 80 per cent of the fledgling data storage market, today EMC is the leading player. Among the major IT suppliers, only Microsoft, Intel and Cisco are more profitable.
It expanded its presence to the mid-range storage area last year following the acquisition of Data General in August for $1.1 billion.
Data General brought two key products to the EMC portfolio, Clariion storage and Aviion servers.
The Aviion line looks set for a major slim down, which will only stop when the server business returns to a position of profitability. EMC is tied into the product range because of a commitment to Data General not to shed any of its assets for a two-year period.
The real motivation behind the takeover was Data General's mid-range Clariion data storage technology.
Analysts agree it offers a compelling alternative to its counterparts in IBM, Hewlett-Packard and Sun Microsystems.
Fuelled by dramatic growth in e-commerce, EMC is now on target to double its revenues to $10 billion by the end of 2001.
