Keeping computers cool produced a hot business in Ohio

You might call the Liebert Corporation a classic Silicon Valley success story. Except that it's in Columbus, Ohio. Still, a lot of the elements are there.

The company traces its roots to the garage of its late founder, Ralph Liebert , a one-time Carrier air conditioning franchisee who saw the proliferation of computers everywhere around him in the 1950s. He thought he could carve a niche for himself by producing highly specialized air conditioners that would keep computer rooms clean and cool. He was right.

Liebert, incorporated in 1965 and taken public in 1981, is today a world leader in its markets for ''critical support for computer systems,'' not only in environmental control but in so-called ''power conditioning'' - protect-ing expensive computers against power surges, brownouts, and other vagaries of electric current.

Through the 1983 acquisition of a division of the Franklin Electric Company Inc., Liebert is also involved in uninterruptible-power systems, which provide backup power for computers during blackouts. A fourth business area, the newest, is monitoring systems that can detect fire, flooding, or power failure in a computer room.

Liebert Corporation's goal, says Lawrence L. Liebert, son of the founder and now chairman and chief executive, is ''to build the whole envelope surrounding the computer - the environment, the power system, and the monitoring.'' Liebert is the dominant company in each of its business lines, and as Mr. Liebert puts it, ''No competitor has it all.''

This $230 million company has been on a steep growth curve over the past several years. Net income grew more than 49 percent annually from 1979 to 1983, Drexel Burnham Lambert Inc. points out in a recent research report on Liebert, and yearly growth in earnings per share averaged 40 percent during this period.

The computer support market is growing. Drexel expects this market to grow at more than 20 percent annually between 1983 and 1988, from $680 million in 1983 to $1.6 billion by '88. And Liebert's market share, the brokerage further predicts, should rise from 22 percent domestically now to 35 percent by 1988, and from 3 percent to about 12 percent in Europe.

Drexel analyst Nicholas P. Heymann expects that growth to slow somewhat over the next few years. But when analysts talk about Liebert slowing down, they are talking about growth rates of 25 to 30 percent per year. Both Drexel and A.G. Edwards & Sons Inc. of St. Louis are projecting earnings per share of $1 for the fiscal year just ended last month, up from 80 cents the previous year.

Liebert is not a large company, and it's not ''known in the street,'' as Mr. Heymann puts it. But those in the investment community who do know the company love it. Of the several hundred stocks Drexel follows, Liebert is one of only eight on its list of ''Acorn Ideas'' (as in, ''Mighty oaks from little acorns grow'').

Robert P. Barnidge, vice-president for corporate finance at A. G. Edwards, calls Liebert ''clearly one of the finest companies I've ever seen.''

But it's not just the rapid growth in a special niche and ''oak potential'' that has given the Liebert story the ring of a Silicon Valley success saga. Liebert employees, or associates, as they are called, tell stories about Ralph Liebert, who passed on last February, the way Hewlett-Packard employees tell stories about Bill Hewlett and Dave Packard.

''You'd hear a click, click, click and that would be Angel, Mr. Liebert's dog. You'd hear Angel's toenails on the factory floor, and you'd know Mr. Liebert wouldn't be far behind,'' one employee remembers. ''Any guy who brings his dog along to visit the factory is all right.''

Lawrence Liebert continues the hands-on tradition, making impromptu factory tours in his shirt sleeves. And this completely nonunion company is known for its humane management. Chairman Liebert speaks of the company as a 2,000-member family and says, ''Truly, our business is our people. The service we give, the products we produce, are expressions of the individuals who work for us; the individual has an opportunity to speak through that product to our customers.''

David Soetebier, a research analyst with A.G. Edwards, says of Mr. Liebert, ''We're quite comfortable with him,'' noting that he had already been running the company day to day before his father's death. Mr. Soetebier credits the younger Liebert with moving the company into ''programmable power,'' as the power conditioning operations are known; into ''uninterruptible-power-supply systems,'' i.e., huge battery packs to keep computers on line during blackouts; and into development overseas, by means of its new manufacturing plant in Cork, Ireland, complementing other Liebert facilities in Ohio and California.

And the involvement of family members in the management of the company has not precluded the hiring of professional outsiders, such as James C. Bresnahan, a Touche Ross veteran who is Liebert's vice-president of finance.

The environmental control business is still the dominant sector of Liebert's business, but the higher-margin power conditioning equipment and uninterruptible-power systems products are expected to grow in importance. And as they do, Liebert will be able to draw on its large ''installed base'' of environmental control equipment and its reputation for service.

These products will enable Liebert to expand beyond the basic data centers, with their big computer rooms full of mainframes, to all sorts of other computerized applications, including telecommunications and banking systems.

''When I do presentations for customers - banks, pension funds, those kinds of people,'' says Mr. Heymann, ''and they've never heard of Liebert, I say, 'Let's go take a look at your computer room and see if you've already got their equipment.' It's amazing how often it turns out that they do.''