Raidtec plans to generate sales of £100m per year by 2002

A private Cork company specialising in computer data storage facilities is aiming to generate sales of £100 million a year within five years. The Raidtec Corporation, specialising in fault-tolerant data storage systems, also expects to float on the New York Nasdaq by 1999. "We need to be doing sales of about $40 million (£26.6 million) per annum to make it worthwhile - we should be well on our way there by then," says Mr Noel May, Raidtec's chairman and chief executive. .

This year the company had revenues of £11 million between its European headquarters in Cork and its US headquarters in Atlanta. It employs 50 people between the two operations and sells to 45 countries worldwide. It has offices in London, Paris, Munich and Milan and plans to open a facility in the Middle East next year.

Mr May traces Raidtec's origins to the late 1980s when he was working in Cambridge, England, with Worldwide Technology - a company involved in international marketing services for US technology companies in Europe. There he saw the growth potential of the information technology area.

He set out several criteria for establishing a new business before identifying what the actual product would be.

"It had to be an emerging technology, with a high technology entry level and high margins," recalls Mr May.

He read about redundant array of inexpensive disks (RAID) in academic papers from Berkeley University and discovered there was no one producing RAID products which enable hard drives to be connected in such a way that the total failure of one drive will not bring down the entire computer system.

Spurred on by the corporate tax incentive and his wife's desire to return to Ireland, he moved to Cork in 1991 and set up the Irish operation. For the first year it engaged solely in market exploration and research and development.

The company was privately funded initially, along with some standard start-up grants. Investment from the Smurfit Venture Fund was the first external contribution and more recently, Forbairt has taken a 2 per cent stake in the company.

Two US partners set up the Atlanta wing in 1991 and last year Allied Capital Trust (ACT) bought out one of their shares. Mr May describes his own stake in Raidtec as "significant".

Raidtec assembles and tests products and keeps overheads to a minimum by contracting out the manufacturing process. The products are then sold through a worldwide network of distributors, systems integrators and original equipment manufacturers (OEMs). A recent research report conducted by Goodbody Stockbrokers predicts that Raidtec's potential market will grow from the $4 billion file server sector of the worldwide market in 1996, to $13 billion, including the midrange sector by 2000.

This move to the mid-range sector is the key to Raidtec's future as a major player. As the first company to complete a fibre channel range of products - which dramatically improved speed of performance and capacity - Raidtec can now compete in the OEM, or mid-range market.

"We made a specific decision two years ago to focus on fibre channels, they are now being adopted by all the major companies," says Mr May.

The OEM market penetration will be executed in the US, where a vice president of OEM sales has been appointed. A team of 15 sales engineers will also be recruited specifically for this purpose, operating out of offices in Atlanta and Los Angeles. They are currently forming marketing alliances and conducting compatibility tests with OEMs worldwide. "It's very exciting. The doors are open and we're the first to market," says Mr May. "The biggest challenge now is capitalising on a worldwide scale, and undoubtedly this implies introducing more equity into the company."

Within five years, Raidtec hopes to be generating £100 million in sales a year - in order to generate these revenues, the most likely financing route will be a flotation on the Nasdaq index.

Mr May commends the Irish Trade Board's targeted marketing consultancy (TMC) programme which he describes as a source of significant help. Under the programme, loans of up to 66 per cent of the company's marketing budget are provided to fund their international sales effort.

Since returning to Ireland Mr May has noticed a remarkable change in business outlook. "Where our ambitions were sometimes hindered by our cultural background, the whole atmosphere of success has changed over the last 10 years. Now the more successes people are aware of, the more it lends impetus to their efforts to succeed."