Suppliers hit hard road

In the first of a three-part series on computer hardware, Alison Birrane talks to Western Australia-based suppliers in the computer hardware market.

RECENT years in the computer hardware market have been tough according to industry players, and while it has claimed recent victims some Western Australians have continued to prosper despite the hard times the industry has faced.

However, many of these players have business interests other than computer hardware supply and are also supplying support, maintenance and service agreements as part of the hardware deals in a bid to secure greater market share.

Government contracts provide a stable market, however, most cite corporate and small to medium-sized enterprises as their largest market.

Both CDM Australia chief Camillo Della Maddalena and ComputerCORP managing director Hugh Smith say that 40 per cent of their respective computer hardware supply business comes from Government with the rest stemming from corporate sources and SMEs.

However, both also agree that success in the computer hardware business relies heavily on the provision of service.

“Over a sustained period of time the quality of product, equipment and level of service will be the determining factor in the company’s sustained success,” Mr Della Maddalena said.

Mr Smith said that ComputerCORP’s clients utilised maintenance and support services as part of a long-term business plan and part of managing the day-to-day risks of running a business.

He said targeting this need was one of the main points of ComputerCORP’s expansion plans.

“We are aggressively continuing our expansion to provide a national service to major corporate and government customers,” Mr Smith said.

Comdek managing director Haydn Collins said while the computer hardware market was still tough, it was crucial for a company to adjust to change and develop new businesses and new strategies to counter any downturn in the computer hardware supply market.

He said a mature computer hardware market meant that replacement requirements had declined and the clients were becoming more concerned with service.

“We have certainly been value-adding to hardware to supply an area that has changed and is more concerned with support and service,” Mr Collins said.

Most players agree that computer hardware renewal happens every two to three years, however, Mr Della Maddalena said that pattern had dropped away recently to be every three to four years, due to an overall slowing in the market.

Sources say computer hardware renewal within organisations is driven mainly by capital expenditure and due to software and operating systems having greater resource requirements.

WA players who have recently won significant government contracts for the supply of computer hardware equipment include CDM Australia, ComputerCORP, Comdek, Stott and Hoare and WJ Moncrieff.