New tech company grinds digital data to dust

Business North Exclusives
New tech company grinds digital data to dust

by Tom Wilkowske


CD-ROM, Inc., the nation’s oldest privately held CD-ROM and DVD company in the industry, is opening a service bureau in the Iron River Business Enterprise Center.

The Eden Prairie, MN-based company, founded in 1988, manufactures and distributes high-end CD-ROM and DVD creation and destruction products and holds several industry patents. It has been selling its CD data destruction products to the U.S. military for three years.

It now plans to sell its data destruction services to private sector clients, to include health care, banking and business, under the name D3, Inc. ( , for Digital Data Destruction.

Company founder and CEO Roger Hutchison is positioning his company’s service as “digital paper-shredding for the 21st century.”

Three major pieces of federal legislation — The Health Insurance Portability and Accountability Act (HIPAA), the Gramm Leach Bliley Act and The Economic Espionage Act — place increasing burdens on the health care, business and government sectors. With these burdens come penalties for failing to dispose of data securely.

What constitutes secure data destruction isn’t well understood, Hutchison said.

There’s a common perception that simply breaking, or perhaps burning, a CD makes that data irretrievable, but that’s not true, Hutchison said. Since a CD-ROM can hold data equivalent to 300,000 pages of text, even a fragment the size of the period at the end of this sentence can hold plenty of data. In these security- and privacy-sensitive times, that could be a serious breach.

CD-ROM Inc.’s patented devices grind the information-holding layer of a CD into dust-size particles, to specifications approved by the Department of Defense. As part of its service, the company provides certification that the data has been destroyed.

The Iron River office is expected to open late in November with four employees. That number could expand to 12 within two years, he said. “That center is targeted to handle all of Wisconsin and all of Minnesota.”

CD-ROM Inc. will offer wage levels “above to significantly above average for each region where we locate.” Employees will need high ethical standards, technical backgrounds and people skills, he said.

The story of how the firm decided to site its service bureau in Iron River is one of timing, connections, relationships and the portability that technology affords.

Hutchison had sought help from the Wisconsin Business Innovation Corp. in Spooner to locate a manufacturing facility for its portable, manually-powered CD destruction devices.

Mark Mueller, business consultant with the corporation, helped him set up a competitive bid process that was won by precision machining company Central United Corp. of Spooner.

CD-ROM Inc. wanted to expand into the commercial market, so the corporation arranged $268,000 in debt financing and equity investment for the firm’s new service bureau, Mueller said. It also offered the Iron River center as a potential site along with its technical assistance.

Because Hutchison envisions many clients shipping their disks to Iron River for processing, the service bureau could be located nearly anywhere. His firm’s investigation determined that operating from a major city isn’t necessarily an advantage.

Hutchison declined to provide current details on his firm’s revenues, which he co-owns with his wife, Lisa Weber Hutchison.

In 1993, CD-ROM Inc. made Inc. Magazine’s top 500 fastest-growing privately-held companies, with base year profitable sales of $1.5 million. It ranked No. 184 nationwide and No. 3 in Colorado, its home at the time. Hutchison said growth has continued to be strong since then.

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