Milestones Icon: StorageTek

Storage Technology Corp. sprang up four years after IBM came to Boulder in 1965, establishing a base of high-tech talent that, in turn, attracted outside companies to set up shop and spawned spinoffs.

 IBM co-workers Juan Rodriguez, Jesse Aweida, Thomas Kavanagh and Zoltan Herger, spotted an unexploited market opportunity to start Storage Technology Corp.

StorageTek started with a dozen or so employees housed in a single room above the Aristocrat Steak House in Boulder that Rodriguez referred to as “one big bullpen.” It delivered its first product 14 months later. It made $26 million in sales its first year.

In 1970 the co-founders were cutting the ribbon on a 32,000-square-foot plant and 85 acres of land in Louisville. Its first public stock offering came along a year after that, with sales of $66 million.

What made StorageTek unique was not only the scope of its success, but the fact that it would come to be reborn out of its own ashes – not once, but twice.

Throughout the 70s, the company was shipping more tape drives than IBM, and opened a Longmont facility in 1982. However, the company had also been spending more than $300 million on research into a number of products, including a home computer, which never made it to market, and filed for Chapter 11 bankruptcy on Halloween of 1984.

Around that time, all four founders left the company to form their own companies, mostly in data storage, and Aweida handed the helm over to Ryal Poppa, who streamlined its focus to concentrate on what they did well: data storage.

By 1990, in what John Reardon, then-president of the Economic Development Association of Longmont, referred to as “the first turnaround of its kind in the U.S.,” the company had the largest stock growth on Wall Street, posting $1 billion in revenue.

However, StorageTek faced massive layoffs again in the mid-90s due to delays in the release of the much-anticipated Iceberg disk storage system. (More than a dozen officers and directors sold 93,000 shares in stock in the month before its debut, when stocks tumbled from $78 per share to $35.25.)

Under the leadership of Patrick Martin, who became president and CEO in 2000, StorageTek was sold to San Jose-based Sun Microsystems Inc. for $4.1 billion in 2005.

By the turn of the century, the University of Colorado’s Center for Entrepreneurship estimated StorageTek had directly or indirectly resulted in the formation of 38 companies in Colorado.

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