Sunday, January 19, 2003

NCR a rarity - an Ohio high-tech giant

Years of turmoil leave company smaller, focused and profitable

By James McNair
The Cincinnati Enquirer


As Ohio celebrates its bicentennial, The Cincinnati Enquirer will examine where the Buckeye State is headed and analyze the key topics that confront the state. Watch for these reports throughout 2003.

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In Ohio's family portrait of high-technology companies, NCR Corp. is the tall kid in the back row.

In a state that sorely wants to be a player in the digital economy, NCR is one of very few Ohio companies that develops, makes and sells products for the information technology world on a large scale. With $5.9 billion in annual revenue in 2001, the Dayton-based company is head and shoulders bigger than any of the other electronics companies based in Ohio.

NCR is the kind of company that Gov. Bob Taft wants to see more of in Ohio. It is a leading maker of automated teller machines, retailing systems and a technology for information hogs known as data warehousing. It employs about 30,500 people worldwide, with nearly 2,800 in Dayton.

But in a state dominated by auto plants, regional banks, insurance companies, retailers and traditional manufacturers, NCR comes off as an odd duck. The state's two other large, household-name tech companies, Lexis-Nexis of Dayton and CompuServe of Columbus, now have out-of-state owners.

NCR still calls its shots and counts its profits in Ohio.

The company originally known as National Cash Register can perhaps thank old-fashioned Ohio resolve for its ability to survive changes in markets and technology over the decades. For most of its 120-year existence, the company was the pre-eminent maker of cash registers and, as they later came to be known, point-of-sale systems.

At the height of its market reign, in 1969, NCR had an IBM-like 102,000 employees around the world with 22,000 workers in Dayton alone.

Then came the personal computer revolution of the 1980s and the technology King of the Hill battles of the 1990s.

In 1991, AT&T bought NCR in a $7.4 billion hostile takeover meant to make AT&T a computer industry player. The move backfired, and AT&T bled $4 billion before spinning NCR back into a freestanding company in 1996.

Thousands of jobs were shed during and after the AT&T era.

The new CEO, Lars Nyberg, a Swede who joined NCR in 1995 during its span as AT&T's Global Information Systems division, faced a gauntlet of tough decisions. He sold businesses, bought others and combined what was left into its three current product lines.

"It's been a question of exiting businesses where we're not No. 1 or No. 2 in the market," NCR spokesman Jeff Dafler said. "We've been enhancing our core businesses in data warehousing, our ATM business and what we call retail store automation, from the checkout line to customer relationship management."

Although NCR's revenue has fallen every year since 1994, Mr. Nyberg led NCR back into profitability in 1999. Were it not for a change in accounting rules, NCR would have ended 2002 in the black as well.

While NCR is a recognized leader in ATMs and retail checkout systems, its growth card is Teradata. The unit provides data warehousing systems and services for companies and government agencies such as Delta Air Lines, Office Depot, the U.S. Air Force and Taiwan's Bureau of National Health Insurance.

Through the first nine months of 2002, Teradata accounted for 22 percent of NCR's $4 billion in revenue. A year ago it was good for 19 percent.

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