A million and counting

Christine Carrillo

Its strategically placed sign has repeatedly conjured one question

in the minds of residents and commuters regularly stopped in traffic

on Harbor Boulevard in Costa Mesa, ‘’What is Emulex?’’

The answer: Emulex is a leading supplier and developer of storage

networking host bus adapters based on both Fibre Channel and IP

networking technologies.

If you are still saying, “Huh?” then there is a better answer.

Simply put, they are high-speed plumbers.

Well, that’s Emulex President and Chief Operating Officer Kirk

Roller’s simplistic definition.

In actuality, and even he admits, it’s a little more complex than

that.

‘’We provide the technology components that allow growth of

storage, remotely,’’ he said. ‘’Our technology components are key to

enabling applications.’’

And why is that important?

‘’Data is everywhere; storage is growing at an unprecedented rate;

the amount of digital images, whether it be Internet-based or

non-Internet-based images, have grown dramatically so the need for

our connectivity from any host computer to storage has grown very

rapidly.’’

Along with the technological growth, Emulex has also taken strides

to better the company’s management capabilities by increasing the

number of managerial officers to further develop and maintain the

company’s status within its field, said Paul Folino, chairman and

chief executive.

Folino, who has been CEO since 1993, relinquished his role as

president to Roller on July 1 and has taken over for Fred Cox, one of

the founders of Emulex, as chairman. Roller, whose expanded role

remains under the direction of Folino, will include overseeing all

engineering functions in addition to his sales and marketing

responsibilities.

The expansion of senior managers focused on creating a secure

environment for the nearly 320 employees has served as one of the

major sources of the company’s longevity.

‘’We wanted to provide an environment where [the employees] didn’t

have to worry about the risk of ... being out of a job in three

months,’’ said Chief Financial Officer Mike Rockenbach. ‘’That was

our obligation as officers to make sure they got an environment to

work in. They’ve got to go execute.’’

And its employees have managed to execute efficiently.

Having increased its revenue four times in the last four years and

having only doubled its number of employees in the same time frame,

Mike Smith, executive vice president of worldwide marketing, said he

believes Emulex has managed to develop its productivity through a

continuous focus on customer satisfaction, program execution and its

drive to do what needs to be done.

In a field of such rapid change, what needs to be done continues

to flow with the technological flux of the computer servers with

faster processors and the demands for larger gigabytes.

‘’The computer industry is the only one that works on replacing

itself,’’ said Art Martinez, director of systems engineering and

support. He admits his useful knowledge goes back only five years

despite his 30 years of engineering experience. ‘’We’re already

planning for our replacement.’’

By planning ahead and adapting to that ever-changing learning

curve, Emulex has managed to hold its status.

‘’We never really got stuck in a rut,’’ Rockenbach said. ‘’Our

objective has always been to be No. 1 or No. 2 in a high-growth

segment ... we’ve been able to evolve and adapt as our environment

changed and you couldn’t be a company for over 20 years in technology

without being able to evolve.’’

Evolution has become a necessary element of survival within the

computer world and one that the 22-year-old company has been able to

use to its advantage.

‘’We’ve gone through multiple technology fads,’’ Roller said. ‘’So

as much of a challenge it is for Phil Jackson to put together a

three-peat for a basketball team, imagine trying to train them and

move into football next year and hockey the next year. That’s where

Emulex has remade itself many times and been successful ... which is

absolutely top tier for any technology company in America.’’

And much of that, he would attribute to the dedicated employees.

With sales reaching about $80,000 per employee, the $255-million

company, according to its June 2002 fiscal year earnings, has now set

its goals on the $3-billion market before it.

In keeping its eyes focused on the road ahead, the company has

worked toward adopting more efficient production.

Through its acquisition of Giganet in March 2001, which Smith

believes served as a tremendous complement to Emulex’s product line

and cemented its position as a key technology partner by increasing

its core market share from 20% to about 40%, and continuing through

its recent transition within the stock market from NASDAQ to the New

York Stock Exchange, Emulex has developed the opportunity to better

serve its customers and shareholders.

Focusing on its three major customers -- IBM, EMC and Compac -- in

addition to its international companies in Europe and Japan, Emulex

has consistently held a global position of at least a third of its

business overseas.

Trading under the new ticker symbol, ELX, as of June 24, the

company hopes the change will help them reduce the volatility and

develop a stock price on an ongoing basis, Rockenbach said.

Emulex has faced at least one large deficit among its shareholders

in 2000, when an e-mail hoax written in the form of a company press

release claimed that Emulex had met with financial losses and chief

executive Folino had resigned, and the stock plummeted in value.

The company quickly rebounded and Rockenbach stated that the

incident played a limited role in the company’s decision to move.

‘’It was really kind of a blip in time where the market really

reacted to the fake press release and then the open trading on the

stock went right back to the same level,’’ Rockenbach said.

Emulex has also established procedures within the public relations

arena geared toward avoiding further mishaps and heightening

communication with the public.

In addition to its heightened public communication, Emulex also

anticipates a developed interoffice communication as a result of its

future move to the new Home Ranch facility on Harbor Boulevard and

South Coast Drive adjacent to the San Diego Freeway in Costa Mesa.

‘’For us, it’s a great opportunity to get all of our people under

one roof again,’’ Folino said. ‘’It’s important for our

communication.’’

The company that has called Costa Mesa its home for nearly 17

years decided to remain within the city that has provided it with

convenience, loyal employees and a great environment in which to

grow.

And growth is its main plan.

Aiming its sights on the billion-dollar market, Emulex officers

plan on enhancing their ability to cater to its expanding market.

‘’The best is yet to come,’’ Roller said. ‘’I see Emulex as

propelling the ability to invest in more than one segment of

technology and I also believe that, financially, now we’re extremely

secure. We have the base to build and take this to a billion-dollar

company.’’

* Christine Carrillo is the news assistant. She may be reached at

(949) 574-4298 or by e-mail at

[email protected].