The downturn in Federal Government spending hasn't boded well for many of Canberra's reseller companies.
Select Computer Technology is one that was caught in the downturn, being forced to reforecast its growth strategies late last year and reduce its workforce. The company had experienced 70 per cent growth, and had geared up for similar growth this year, but the arrival of the Liberal Government and subsequent reduction in IT spending changed that.
"It's going to be tough in Canberra," said Select's managing director, Costa Kapantais. "Everything's being reviewed. The market in general is not conducive to selling lots of products. It's a case of the Departments not spending the money they were allocated.
This is a long way from the days prior to the incumbent Liberal Government. "All you had to do was stand there and money would fall into your pockets, so you didn't have to be very good to gain a revenue stream," said Kapantais. "You now have to work a lot harder for it."
A number of large contracts that were still running and a doubling of its services business assisted the company through the worst of last year. While Kapantais doesn't believe things will really pick up until next year, he is looking forward to modest growth towards the end of this year.
Select's origins make an interesting story. Kapantais said he has always had a strong interest in technology, since programming a Commodore Vic 20 at age 15. "I had a couple of friends who were interested in computers as well, so I suppose given my enthusiasm we decided to form a company."
Kapantais began by developing his skills in DOS and CPM. "It really was an effort of over 100 hours a week for the first three years of the company, earning $60 a week during the first year."
That was June 1988, when Select's core business was buying and selling second-hand computer equipment. But it was only six months before the company got its first big break.
During a trip to Sydney to buy second-hand components, one of Select's business partners was introduced to a sales representative from Clear Technology, who was distributing Unisys products. Kapantais said Select was viewed as an opportunity to expand the Unisys channel into Canberra.
Smoke and mirrors
In those days Select didn't even have a fax machine, so a small amount of bluff was called for. "We didn't even have a premises," said Kapantais.
"we were working out of a backyard, so we quickly established a small office in the city."
From this unusual position, Select was able to strike a deal with Clear to become a Unisys distributor. With the assistance of funding from one of its customers, the company was able to purchase the necessary Unisys demonstration equipment, and things started to take off.
"They (Unisys) started to introduce us to the government market, and it just started from there," said Kapantais. Soon customers were asking about networking products, and another opportunity emerged. "Business grew from there quite rapidly." Kapantais is now more interested in the new technologies that are impacting industry.
That interest has lead Select to embrace the notion of network computing. It has been working extensively with NCD's WinCenter product, for running multiple Microsoft Windows client sessions from a single Intel-based server. It is already finding success in a number of government bodies, which are less than keen to throw out older computers.
"The company does support the traditional PC environment, which is what I'm calling it now, and the emerging technology, which is really stuff that we were doing a while ago that's been rehashed and had a new face put on it," said Kapantais. "If you look at it, network computing is very similar to what we did with the mainframes, where you had a thin device at the front and all the processing was at the server."
Kapantais said that at present the WinCenter approach is easier to sell to clients than a complete network computer rollout. "If you've got an existing environment and you're running Microsoft applications, and you want the total cost of ownership of a network computing environment but to also preserve your Microsoft investment, the best way to go is into this scenario. What that allows you to do is centralise all your processing power on the server, and publish applications to multiple points and different types of clients.
"Network computing in general is a long sales cycle, because people consider it new, and they tend to be very cautious about entering into it," said Kapantais. "So a lot of our customers are running pilots. Some customers are doing enterprise deployment, but it's a hard slog. It is also very technically intensive. We've had our people working on these sorts of systems for at least two years now."