Coretech was a successful whitebox builder for many years but was forced to evolve as that market disappeared. Co-founder, David Wain, talks to ARN about education, storage and hot laps in V8 Supercars.
What was your first ever job?
I think it was a packing job in Woolworths but my background is in electronics design. My boss purchased a Custom Computer Services (CCS) computer in the mid-1980s and I got to do some computer-based circuit design on it. It broke down so I took it into the shop and started hanging around with a couple of the CCS guys because I got right into computers. I ended up working for them. CCS was one of the first companies on the ground in Australia that imported stuff from Japan. It won a lot of government contracts and I ended up managing a regional office for a year or so before running the main office in Brisbane.
How did Coretech come into being?
The guy who owned the business wanted to franchise it and offered the four stores in Queensland to myself and two business partners, Garry Holmes and Stuart Rose. He got out at the right time because margins were 40-50 per cent but they've been dropping ever since. It was a national company at the time with Garry running the Canberra office and Stuart running Sydney but we consolidated back to one store in Queensland. The franchise concept didn't work so we renamed the company Coretech in 1990 and basically started from scratch.
If you knew back then the margins you would be making today, would you have bothered?
Possibly not. You look back at the opportunities the Internet has created over the years and think how different things might have been if we'd focused on that rather than the hardware. But we're pretty happy with how the business has evolved.
So how has it evolved?
We've been skilling up and growing our integration business with a fairly heavy focus on education. We won some education contracts early on with QUT [Queenland University of Technology] and University of Queensland so we got to know that industry well. We ended up developing a product we call Corebuild, which is a best practice Microsoft network for a campus environment. That's been really successful for us and it's so polished that we sell it as a licensed product now. It enables schools that have disparate platforms to move back to a manageable environment.
Can we expect to see any new areas of focus this year?
We recently signed as a Solutions IT partner for Scholaris, which is a learning management portal that dovetails nicely with our Corebuild solution. Solutions IT is a Perth-based company and Scholaris is probably the leading Microsoft learning gateway product in the world at the moment. Another focus will be on enterprise storage products from VMware, NetApp, IBM and Tivoli. We have been kicking a lot of goals in virtualisation and storage, especially in education. Network resilience is becoming a key issue as well.
So what about your whitebox business?
That's our heritage but we basically stopped building boxes in November 2006. We've been a supplier to Education Queensland for about 15 years but the new contract that went to market the year before last made it clear that whitebox wouldn't make it. We spoke to IBM and Lenovo about offering their product and won a spot. That was the death knell for whitebox - we still do a little bit of it for some of our corporate clients but the percentage is tiny.
What percentage of the business is hardware now and how much would you like to see it reduced?
It's probably still 80 per cent. We just won Laptops for Teachers here in Queensland so that was $8 million in a single project. It would be nice to get that [hardware/services ratio] down to 60/40 but there's still money in hardware if you have the volume. We will grow the business to $30 million this financial year and have managed reasonable growth [outside Laptops for Teachers] despite the ASP [average selling price] dropping.
What do you like about your job today?
The challenge. This industry has had some problems in recent years but I think it is now in a good position for solid growth. There's excitement around technologies such as virtualisation and skilling up in areas like that is bringing new opportunities. We're also putting together some innovative ways of addressing the SMB market because everybody wants a piece of it but nobody has figured it out yet. Watch this space on that one.
What do you dislike most about the IT industry?
There's not a lot I dislike but I guess the biggest whinge is margins on product. We've been expecting it to bottom out somewhere for years now but it doesn't seem to be any closer. Vendor relationships can also be disappointing at times because they can be hot and cold. I wouldn't like to point fingers at anybody in particular but sometimes they change direction to suit themselves without worrying about how it affects business partners.
What do you do away from work?
We've been a sponsor of Stone Brothers Racing in the V8 Supercars for about seven years. They do a sponsors' day every year and we get to take some customers out there. I've done a few hot laps and it's a lot of fun. I like getting up to Noosa a couple of times a year and relaxing.
Do you like gadgets?
I prefer a phone to just be a phone but I do like some gadgets. The iPod touch is nice and I think Apple's interfaces are a step ahead of everybody else. I'm interested to see if Apple gets into the UMPC [ultramobile PC] market because they are big in the education market. We've had a look at Intel's Classmate, Asus' Eee PC and Samsung's Q1 but I'm not convinced on their application because they are grossly under-powered and the screens are really small.
What did you want to be when you were young?
A pilot but I don't think I had the commitment at school to do that.
What are your biggest ambitions?
Professionally, for Coretech to be the best it can be in its own backyard. Personally, to improve my work/life balance - we're all guilty of failing to do that at times.