Turning Kiltimagh into tech hub for data storage

 

THE MAYO town of Kiltimagh is not considered a technology hub but it is home to CMS Peripherals, the €150 million turnover specialist storage distributor which employs 60 staff.

CMS maintains a low profile and its founder and managing director Frank Salmon rarely speaks to the media. The company has just marked 20 years in business - an impressive feat in a sector where mergers and acqusition are commonplace. Storit, the company which trades as CMS, had revenues of €155 million and a pre-tax profit of €1.08 million in the year to the end of August 2006. Trading in Ireland and the UK, where it employs 90, it distributes corporate storage products from brands such as CA, Seagate, Symantec and TDK to a network of resellers. It also sells consumer products such as hard drives and flash storage into big retailers like Boots. CMS generates sales of about €25 million in Ireland and is expecting 10 per cent growth this year.

Salmon, a native of Knock, was the first employee of CMS when it was established in London in 1988. Two years later he got the chance to buy the company for £3 and an undertaking to repay a company load. He raised £200,000 by sending out letters to friends and family and met another major investor by chance in a Las Vegas casino. In 1990 the company turned over £1 million for the first time, a sum it generates in two days now. Three years later it took the bold step of setting up in Kiltimagh.

"It was an opportunity to explore whether there was advantages having a remote support capability in Ireland, and in particular, in Mayo," says Salmon. "For many years that was a competitive advantage." Half of the Irish staff provide support to the UK business but the increase in the value of the euro has eroded the cost advantage of the Irish base.

CMS has carved out a profitable niche around data storage, even developing its own brands such as Disgo USB flash storage keys, despite competing with well-financed US firms like Ingram Micro and TechData.

It hasn't all been plain sailing. In 2002 an internal fraud was discovered which had siphoned off £1.5 million in the previous two years. "Luckily enough she didn't have a drug habit - most of the money was invested in property so we were able to recover it," explains Salmon.

Consumer sales have mushroomed in the last five years driven by the amount of data being generated by digital photos and videos and as people digitalise their music collections.

"It's a good market to be in and it's only going to continue to grow," says Salmon. Although CMS has seen a slowdown in its sales to business customers, he believes the consumer business might be recesssion proof.

"Hopefully they'll be staying at home downloading more stuff and need more storage," says Salmon.