Verbatim explores media for data storage

GOING BEYOND FLOPPY DISKS

May 25, 1992|By Harry Greyard | Harry Greyard,Knight-Ridder News Service

CHARLOTTE, N.C. -- Back in the old days, like 1990, Verbatim Corp. pumped out 500 million floppy disks a year.

And nothing but floppy disks.

Today, Charlotte-based Verbatim also has makes optical disks and tapes that store information, establishing itself as a big player in all aspects of the data-storage industry.

If a company or business wants to store computer information on any type of medium, Verbatim will have a product to do it.

President Nicky Hartery gives an indication of what the new strategy will do for Verbatim: "In five years, we should be close to $1 billion in sales."

That's fivefold growth. Standard & Poor's estimates Verbatim's 1991 sales at $200 million. Verbtim, a privately held company, does not release exact sales figures.

"Verbatim is certainly a respectable, major player," said Robert Abraham, vice president of Freeman Associates, a computer consultant in Santa Barbara, Calif. "If you look at the breadth of their product line, they're strong just about everywhere."

Computer information storage comes in three forms. Each form has several sizes and advantages:

* Floppy disks. Any PC user is familiar with disks. They're easy to handle, durable and relatively inexpensive.

* Tape. Science-fiction movies of the 1960s showed big computers with tape reels at least a foot across. Those reels still are around, but small tape units -- similar to cassette recordings -- store data, too. Tape is reliable but slow.

* Optical disks -- Just as a compact disk holds a recording, an optical disk holds information. A 3 1/2 -inch optical disk holds as many as 44,000 pages of text. That's 88 times more than a traditional floppy disk. Optical disks are relatively new, so their market still is undefined.

Verbatim realized it was time to redefine its destiny in 1988. The company was motivated, in part, by the cutthroat floppy disk business.

"As a one-product company, survival would be difficult," said Mark Welland, vice president for sales and marketing. "We've gotten ourselves in products that would ensure our survival."

"In the mid-'80s, there were over 60 brands of floppy disks," he added. "Today, there are four leaders."

Verbatim is one of them, along with 3M, Sony and Hitachi Maxell.

Good timing helped Verbatim as it looked for ways to expand its market.

Its owner, Eastman Kodak, put the Charlotte subsidiary up for sale in 1989 because it didn't fit Kodak's core business. In March 1990, Mitsubishi Kasei Corp. bought Verbatim so it could expand its U.S. manufacturing capacity.

In November 1991, Verbatim bought a North Carolina plant to manufacture the optical disks. Two months ago, Verbatim rounded its product line by buying Carlisle Memory Product Groups Inc., a big tape maker.

The potential market for all Verbatim products today is $2.5 billion, Mr. Hartery said. In three years, he estimated it will be $4.1 billion.

What's beyond 1995, Mr. Hartery can only guess.

"We'll continue to define our market," he said. "Five years is measurable. Beyond that is Star Wars. We do think there's a major opportunity in pocket computers. We think they will be tremendously big in the latter half of the 1990s."

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