First of a two-part series

RESEARCH TRIANGLE PARK … After years of being a catch-all research center for various technologies, MCNC might soon find itself more focused on one or two specific areas or broken apart.

Chairwoman Marye Anne Fox is launching an examination into a possible reorganization of the 22-year-old center, trying to achieve more operating efficiency and a better allocation of resources. The study comes as MCNC is seeking a replacement for former president Bill Kress, who stepped down at the end of 2001.

“Any time there’s a change at the top, it’s incumbent upon an organization to look closely at what it’s doing and determine what’s best for its future,” Fox says.

The study will look at how best to reconcile the competing missions of MCNC, which provides supercomputing and networking services to North Carolina universities and government agencies and also performs research in areas like materials science, electronics and information technology and environmental science.

“There have always been competing foci between the economic development area and the support for universities,” she says. “There are separate compensation programs for each … (and) they even have different employee cultures, with one more service-oriented and the other more entrepreneurial.”

Revenue cut

Fox also is taking a hard look at the nonprofit center’s finances. MCNC struck gold two years ago when one of its spin-offs, Cronos Integrated Microsystems, was purchased for $750 million by fiber-optic equipment firm JDS Uniphase. The deal netted MCNC almost $200 million for its stake in Cronos.

But state budget woes and a cold economic climate in which research contracts are hard to come by could eat into the cash cushion that Cronos has provided the center, a cushion that officials would prefer to use for strategic investments in new programs that may one day produce similar paydays.

“We have to be careful with our resources because we want to create long-term value,” Interim President Bill Moore says. “In the long run, we want to be able to spin out other successful companies.”

Although the center receives no state funding, revenue from state universities for supercomputing and networking services remains a key revenue source for MCNC. That revenue was cut by $5 million this year, to $7.7 million. It now accounts for about a quarter of the center’s fiscal 2002 budget, down from 38 percent a year ago.

Based on the results of the study, Fox says, MCNC could undergo drastic changes, from eliminating some disciplines so resources can be diverted to more promising fields to pursuing more research contracts with private industry. Or the center could maintain its current operations.

“We need to marshal all of our resources to be successful,” she says, adding as an example, “MCNC has big ambitions to be a national leader in networking services, but we don’t have enough money in the bank right now to get us there.”

Investing in upgrades

The center is investing some of its Cronos windfall to start moving in that direction, however. In 2001, it started both a five-year, $12 million upgrade to its supercomputing capabilities and a three-year, $13 million expansion of the North Carolina Research and Education Network (NCREN), a high-speed network that connects MCNC and state universities.

Thom Dunning, who heads the high-performance computing operations at MCNC, says the improvements will increase the data storage and sorting capacity of the center’s supercomputers and the reliability and bandwidth offered by NCREN.

Such capabilities will be crucial to the success of programs like the North Carolina Bioinformatics Grid, one of the nation’s first computer grids, or specialized networks, geared toward the life sciences industry. By providing volumes of data and high-performance computing to researchers statewide, supporters hope the BioGrid will accelerate the pace of human and plant genomic research, leading to new drugs and better agricultural yields.

“Every state has its eye on the genomics and proteomics field for the commercial possibilities it holds,” Dunning says. “The BioGrid should give us a head start and enhance North Carolina’s ability to compete in the field.”

MCNC is funding a $1 million test phase of the grid, which Dunning says will help determine future needs. A kickoff meeting for the grid took place Jan. 24. IBM and dozens of North Carolina businesses and universities involved in biomedical research also are working on the BioGrid.

Although MCNC’s capabilities already have attracted international attention … the center recently was named as the official U.S. site for accessing proteomic data compiled by the Swiss Institute of Bioinformatics … officials say the BioGrid is several years away from being viable.

And with a possible restructuring and management changes looming on the horizon, it may be quite a while before MCNC yields another blockbuster success.

Editor’s note: Part Two will be published Monday.