KÜRT – Data Recovery and Information Security

Data recovery firm looks to expand further abroad

Budapest Business Journal
2004. július 12.

Kürt Computer System House Rt, a specialist in data protection and recovery, is reshaping its range of services, with the aim of making its portfolio more accessible. Simultaneously, it is expanding internationally.

“In Hungary, there’s no more space for us to grow. The local market is too small and we already have most of the major firms as clients, ” said Sándor Kürti, the company’s CEO and co-founder. Kürti noticed that Bell Research placed Kürt Computer as the local market leader in both the data protection and data recovery spheres. “We could have two small products and simply exist here in Hungary, but that’s not for us. It’s an absolutely essential step for us to sell more services abroad,” he said.

Rather than setting up a new subsidiary in the U.S. as earlier planned, the company has opted for the closer climes of Austria, while also stepping up activity at its earlier established German subsidiary.
“To open in the U.S., we’re talking about a minimum investment of between $3 million and $5 million, while $l million is enough for a European subsidiary,” said Kürti. In the U.S., Kürt Computer has instead opted to work with a partner in its bid to attract U.S. government users. “We’re starting in this way, and we’ll understand how we can exist on the U.S. market. This way could be much easier,” Kürti said.

The German subsidiary, Kuert Datenrettung Deutschland GmbH, was set up in March 2003, and is based in Bochum in the Ruhr region. Kürt Computer has so far invested around $l million in its German subsidiary, which is equivalent to the parent company’s yearly profit. “Our operation in Gemrany started with data recovery, as we could undercut competitors by as much as half. It is moving towards data security, and is very much fitting in with our plans,” said Kürti.

Meanwhile, Vienna-based Kuert Information Management GmbH was set up at the beginning of this year. Kürt Computer currently employs 55 in Hungary, 12 in Germany and 5 in Austria. According to Kürti, many activities are outsourced in Germany and Austria.

Overall, Kürt Computer’s revenue for 2003 was around Ft1 billion (€4 million), with around two-thirds coming from data security and the other third from data recovery. Kürt Computer recently completed a major project that involved merging two companies’ data during a merger. Confidentiality agreements meant the company was unable to reveal the names of the firms involved. The German subsidiary is expeeted to break even this year, posting revenue of €800,000, said Kürti.
Kürti admitted that his company’s expansion strategy is a conservative one, and is based entirely on minimizing risk. Expansion is funded out of profits, as the company is unwilling to take out credit from banks. “It’s perhaps a disadvantage that we never use credit. We have no practice or knowledge about how to use credit, ” quipped Kürti. However, this may be about to change, as Kürti ponders how to accelerate international growth. “Now we’re in the EU, and with lower inflation, we have to think about taking out loans,” he said.

Changing portfolio
Kürt Computer recently became one of the founding members of the Hungarian chapter of the IT Services Management Forum (ITSMF). This will help boost the company’s international profile as a quality provider of data protection and other IT services, according to Kürti. “The aim is to gather all the knowledge together through a network of international contacts and establish best practices, so that it’s easier to access key information and add knowledge,” he said.

The non-profit organization promotes the ongoing development of best-practice IT Service Management standards and qualifications. It has been operating since 1991, with the Hungarian wing set up on April 15, 2004. Other members in Hungary include oil and gas company MOL Rt, OTP Bank Rt and mobile phone firm T-Mobile Hungary Rt.

In another development on May 17, Kürt Computer launched a new range of data recovery services aimed very much at individual users, as opposed to the firm’s traditional core base of business clients. “We decided to slightly restructure our data recovery services in order to reach a wider audience. It no longer just applies to hardware, but also to mobile phones, DVDs, flash memory, USB ports and handhelds,” Kürti explained.

Kürt Computer will also travel to the customer when called out on its data recovery hotline. Over its 15 years of operation, the firm has carried out more than 30,000 data recovery jobs. The company offers to recover data that is unreadable or erased, from equipment that has been soaked, broken or burnt. It claims to be able to recover all data in 80% of cases.

Handing over the reins
Later this year, Kürti is to step down as CEO, but will continue a chairman. The new CEO will be József Kmetty, currently the company’s sales director and deputy CEO. “It’s time to divide the ownership and the CEO activity,” Kürti explained. I’ll concentrate on strategy, rather than on the day-to-day running of the company.” Regarding the decision to appoint a CEO from within, Kürti said he could not imagine someone coming in from outside, due to the firm’s unique culture.

“It would take anyone a minimum of half a year to understand the culture of this company,” he said. “We have a very flat, Japanese-style structure. That is so untypical here.” Among its more interesting clients, Kürt Computer has recovered a lot of lost data for the Hungarian secret services. However, the company does not itself gain access to the information. “We don’t know anything about the background of the information. That is controlled by specialists,” he said.