Cedar Tech is going up
Minneapolis / St. Paul Business Journal - by Adam Weintraub Staff Reporter
An Edina-based start-up is hoping to ride a little tiny elevator to a great big market.
Cedar Technologies created a whole new market for compact disc recording equipment with an inexpensive desktop unit called the CD-R Publisher, which uses a robotic arm on an elevator to shuffle discs among components that can be upgraded as technology improves.
Now Cedar is about to try to do the same thing for the next generation of media -- recordable DVDs.
The firm launched its Publisher line in 1996, just about the time prices started sharply dropping for blank recordable CDs. The machines combined computer circuitry with CD recorders, a self-contained inkjet printer to label the discs, and that nifty little robotic elevator to move the media. It automated disc reproduction, with a price point around $7,000 -- thousands less than the nearest competing machines, like those made by Rimage Corp. of Edina.
"Cedar was the first company to do it really cheap, and it scared the hell out of Rimage," said Stephen Nathans, editor of EMedia magazine. The Rimage machines and others like them could crank out high-quality discs with high-resolution graphics, but Cedar's units could turn out small quantities of discs with very passable printing at a cost low enough that it opened CD-R technology to a new universe of customers.
"We put together a prototype product in '96 and took it down to [giant computer show] COMDEX, just a little booth to see if the market would accept it," said James Lewis, chief operating officer and one of the founders of Cedar.
Judging from the reaction, which included cover stories in magazines in France and Japan, the market was pretty much "accepting." Sales started in earnest last year. The privately held company is selling 125 to 150 of the Publishers a month to customers such as Hest & Kramer, the Edina-based music house that put together the jingle for Jesse Ventura's gubernatorial campaign.
Hest used the Publisher, for example, to put copies of the jingle in media hands within hours of the final mix, and has used it since to create custom demo discs for potential clients.
One key to market acceptance, Lewis said, was when equipment manufacturers adopted a worldwide standard for CD-R machines. The standard for the next generation of optical media, the DVD-ROM, is still up in the air, but officials at Cedar have decided to forge ahead, counting on the clout of electronics manufacturer Pioneer to win approval of its proposed standard.
"We expect Pioneer will win the DVD standards war," Lewis said. Using that standard, "we're probably less than 30 days from introducing the first DVD auto-loader." Although DVDs are now best known as a format for distributing movies and other entertainment, they hold nearly five gigabits of data and could become an important mode of bulk data storage.
"The potential market for data storage and data transfer is in the hundreds of billions," said CEO Bill McMahon, who brought financial and strategic expertise to Cedar after serving as CEO of Lund International Holdings Inc., the Anoka-based maker of aftermarket auto accessories.
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