Emulex's Folino: A Game Plan for Success

11.30.05 – Paul Folino – former three-sport jock – took to heart the pep talks preached by a succession of high school and college coaches. The Emulex Corp. CEO has now parlayed those lessons into a slam dunk in the business community.

When Folino joined Emulex as president and CEO in 1993, the struggling manufacturer of storage networking devices was losing money, forcing him to institute drastic layoffs. Today, Emulex employs 550 people, leads the world in its core markets and has nearly $600 million in the bank.

Paul Folino
Paul Folino, Emulex CEO

“I learned in sports that you can’t always win,” says Folino. “But you’ve got to pick up, dust off, learn from your loss and focus on the next game. Turn the loss into a victory.” 

While Folino has experienced business failures, Emulex is definitely in the winner’s circle. The stock was named Orange County’s number one performer for the 1990s, and the American Electronics Association named Emulex Outstanding Public Company of 2002. Folino himself was selected Ernst and Young’s Orange County Technology Entrepreneur of the Year in 1999, and Orange County Director of the Year for high-growth technology in 2000. The company generated record revenue of $108.2 million in the fourth quarter of fiscal year 2005, a 25 percent increase over the same period last year.

Funding Future Technology Leaders

Emulex is an original Calit2 corporate partner and one of its biggest supporters. A large portion of the company’s $2.5 million gift funds dozens of undergraduate and graduate students in a range of IT-related disciplines.

For example, the Calit2 graduate fellowship program recruits talented students from around the world to UCI and the institute. Emulex’s gift also supports post-doctoral fellows and, beginning this year, the Calit2 Summer Undergraduate Research Fellowship in Information Technology (SURF-IT), which exposes undergraduates to the rigors of research.

Folino believes the investment is mutually beneficial. “Emulex has gained exposure to quality students – a number of interns come to work at the company – and we get the opportunity to weigh in on some of the research taking place,” he says.

That exposure is useful as Emulex looks to diversify its business.

The Bottom Line is Research

Just a few years ago, 98 percent of the company’s revenue came from its line of host bus adapters. In 2003, it acquired Vixel, a manufacturer of embedded storage switches, which has added handsomely to its bottom line. Folino says Emulex is poised to investigate new technologies and protocols that will continue to expand its markets.

“Most successful companies find their leadership in key markets, but continue to grow and diversify into complementary areas,” he says.

He is particularly attracted to the research fostered by Calit2. “Back in the early 70s and 80s, pure research in technology flourished throughout the United States. Those labs have diminished over the years, so Calit2 is really an opportunity – right in our own back yard – to jumpstart that type of research again,” Folino muses.

Emulex helps fund Calit2 research on IT development in Asia and its impact on the United States’ high-tech industries and policies.

The company also has funded an atomic force microscope, capable of imaging nano-meter-sized particles, in the Calit2 materials characterization lab.

Making Philanthropy a Hobby

Folino’s philanthropy extends well beyond Calit2. He enjoys giving back to the community, pointing out that “Orange County is a great place to live, raise a family and grow a high-tech business.” Until August, Folino was board chairman of the Orange County Performing Arts Center, spearheading a $200 million expansion effort. He is also a past president of the South Coast Repertory Theatre, which underwent a $50 million facelift and building addition under his leadership. Other recipients of Folino’s largesse are the M.I.N.D. Institute, Cal State Fullerton, Chapman University and UCI’s Merage School of Business.

“My non-profits are my hobby. They’re challenging, complicated and difficult, but they’re very rewarding when you get them across the finish line.”

True to his athletic experience, Folino believes that failure ultimately contributes to success. “One of my biggest disappointments was realizing I wasn’t going to be the point guard for the L.A. Lakers,” he laughs. “But it forced me to stay in school and get a good education. I’ve had failures in my career, too; most successful people have. You learn not only from your successes, but from your bumps along the way. I’m very blessed that I’ve had a combination of both.”

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