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By Sally Watson, 20 December 2000 12:40

NEWS The company will remove itself from the services and integration sectors. President and CEO Patrick Martin was appointed in July, after 23 years with Xerox, to take the helm of the embattled company. Over 50 per cent of the company's revenues are derived from tape storage - a market Martin claims is key to the company's success. "We've really gone back to what we know how to do well, which is archival retrieval and data management," Martin told silicon.com. "That is still a growing business - revenues are growing at a conservative estimate of 12 per cent per year. And we're going to go back and re-invest and re-emphasise that area of the business." The company rebounded from nine months of consecutive losses earlier this year, reporting profits in the second and third quarters of 2000. StorageTek called in experts from McKinsey & Co in autumn 1999 to help the company restructure. "There weren't any problems with the products we were selling, but we kept on looking for other areas that were away from our core business," Martin admitted. The once pure-play tape storage company found itself dabbling in the new areas of video tape and recovery services, ideas that were quickly jettisoned in the corporate overhaul. Martin also accepts that the company relied too heavily on other manufacturers and resellers for distribution of products. When IBM cancelled its major disk partnership with StorageTek, the manufacturer lost 20 per cent of its revenue in one fell swoop. "Fundamentally, the company [is going] back to focus on its core strengths which are in tape, tape libraries, enterprise disks and SAN," Martin said. "It has basically loosened itself from a lot of extraneous business."