Burnsville company evolves from parts sales to sophisticated computing systems

by John Gessner
thisweek Newspapers

The brand-new digital sign in front of Mystic Lake Casino is controlled by a high-performance computing system designed and built by Burnsville firm Nor-Tech.

A Nor-Tech supercomputer helped Boeing analyze 170 distinct noise readings from an aircraft under development.

The company, which started as a high-volume computer components dealer but now makes most of its profits from high-performance clusters and supercomputers, has even done business with DARPA, the Defense Department’s high-tech development arm.

“We’ve sold them to MIT,” said Todd Swank, Nor-Tech’s vice president of marketing. “We’ve sold multiple units to the University of Minnesota, the University of Wisconsin.”
With 48,000 square feet of manufacturing, warehouse and office space on Cliff Road in north Burnsville, Nor-Tech (short for Northern Computer Technologies) isn’t the same company that opened in smaller Cliff Road quarters in 1998.

Nor-Tech still sells computer parts and builds its own line of personal computers under its Voyageur brand.

But it’s the really high-tech stuff that has helped the company make its mark and improve its bottom-line performance.

“That’s where we’ve exploded in the last five years,” Nor-Tech President David Bollig said.
Bollig used to sell computer hardware for Bloomington-based Globelle Inc., which closed in late 1997 – due in part, he said, to an ill-fated acquisition of another company.
“Basically, there was a lot of inventory in that transaction that became dated very fast,” Bollig said. “Within a year of that acquisition, Globelle was going from becoming this huge, up-and-coming national distributor to bankruptcy court.”

Bollig picked up where Globelle left off, launching Nor-Tech with 17 employees, eight of them Globelle refugees.

“We started out doing the exact same thing – we brought in computer components and we were selling them to mom-and-pop stores all over the Midwest,” Bollig said.
His customers were computer resellers and repair shops. But the parts business took a hit from online competition, and his company lost pricing power, Bollig said.
“It was difficult selling just the parts,” he said. “It became harder and harder, and the margins were thin.”

In 2000 Nor-Tech created the Voyageur line of desktop PCs and servers, while continuing to sell parts. The computers featured name-brand components such as Intel motherboards and Seagate hard drives.

“We chose to spend more to build a better product,” Bollig said. “In the end, that helps you.”

The company’s next breakthrough was its acquisition of a company called Reason Computers, which sold machines to end-user customers including schools and hospitals. In 2004 Nor-Tech merged its operations with Reason’s, shuttering that company’s Minneapolis office and combining the two companies at Nor-Tech headquarters at 901 E. Cliff Road.

“With their expertise behind us, I knew we could take it to another level,” Bollig said.
Nor-Tech installed Reason’s engineering guru, Dom Daninger, as its vice president of engineering and began designing high-performance computing systems tailored to specific tasks.

“We’re still using standard components,” said Swank, who, like Bollig, also worked at Globelle. “But to tie them together really takes some high-end engineering.”

Standing behind Nor-Tech has been Bollig’s partner and the company’s majority owner, Texas businessman David Chang, a former customer of Bollig’s at Globelle. Bollig calls him “the money dude” who has made the necessary capital injections at critical times.
“We were just a middleman selling parts,” Bollig said. “That’s what we did. But there was no margin.”

Company sales peaked at $30 million when the main business was parts sales, Bollig said. Today, he puts annual sales at “north of $25 million.”
“Margins were thinner, though,” in the early years, he said. “We’re more profitable now than we were then. And the fact that we’re continuing to grow during a recession, we’re excited about.”

Nor-Tech employees have another reason to cheer: Their company is one of few its size with an on-site child care.

Original Article

John Gessner is at john.gessner@ecm-inc.com.

About Nor-Tech

Nor-tech is an industry leading system integrator with over a decade of experience providing high performance solutions to the scientific community. Nor-Tech platforms range from standalone scientific workstations to scalable high performance clusters doing large scale research.