Excerted from January 05, 1998, (Issue: 1401) of VarBusiness
techweb.com
...Sweet Spots
Whether you're cashing in or left on the sidelines this year depends not only on what you're selling, but how you're selling it. There are clearly some technology sweet spots. Year 2000 repairs won the top nod as customers' most strategic IT investments in 1998. The Lutheran Brotherhood, a nonprofit insurance and financial services firm in Minneapolis, plans to spend roughly $6 million this year alone with Computer Horizons Corp. in Mountain Lakes, N.J. (VARBusiness 500 rank: 73)
"We've got about 25 to 30 Computer Horizons consultants on site" fixing Year 2000 flaws in the company's accounting, marketing and administrative systems, says Lutheran's assistant vice president, Edward Stang.
Computer Horizons is getting all that business, says Stang, because it was the only VAR that could offer Lutheran the help it needed in 1995. Back then, Computer Horizons agreed to put its own staff on-site at Lutheran to learn the intricacies of the company's systems, many of which lacked the documentation that would allow an outside vendor to easily find and fix the Year 2000 flaws.
Before VARs rush to bid on Year 2000 projects, they need to remember that experts expect testing to take up 50 percent or more of the Y2K effort, and that such testing can be a complicated process of coordinating which interlocking modules of code get tested and when.
"We're just getting into testing with some of our clients, and we will only do [that work] on a time and materials basis" rather than for a fixed fee, says Michael Poehner, president and chief executive of DMR Consulting Group Inc. in Montreal (VARBusiness 500 rank: 34). Poehner estimates Year 2000 work will represent 20 percent of DMR's projected $900 million in revenue this year.
Year 2000 opportunities aren't limited to large firms such as $230 million (1996 revenue) Computer Horizons. Information Technology Specialists Inc., a VAR in Covina, Calif., expects its Year 2000 business to boost sales from roughly $800,000 in 1997 to $2 million this year.
Not only does Information Technology make Year 2000 repairs for customers, but it also has adapted its SuperVisor toolset for AS/400 software maintenance for use on the project and sells that tool to other VARs, says managing partner Richard Watson. The Year 2000 problem is boosting sales of both Information Technology's services and its toolset, he says, and "is the best growth opportunity we see for ourselves." Despite the opportunity to turn Year 2000 repairs into long-term business, he says, most VARs seem to be waiting for customers to approach them with Year 2000 business.
VARs and systems integrators can reap a Year 2000 windfall even if they steer clear of the complex repair work by selling new hardware or software that fixes a customer's Year 2000 problem as it provides new features. Such system replacements are a major reason John Woolsoncroft, vice president of marketing for Concepts Dynamic Inc., a VAR in Schaumburg, Ill., expects the company's sales this year to grow by 50 percent from its $6 million to $7 million range last year. |
