Beautiful one day, perfect the next it may be, but few would deny Queensland is something of an economic backwater in attracting industry and big corporate dollars when compared to its southern neighbours.
In the IT arena, the majority of spending is done by the State Government, rather than the business community. Some estimates suggest that the public sector accounts for as much as 70 per cent of the money spent on IT products and services.
Lack of big corporate customers hasn't stopped Phil Howson from building his Brisbane-based Sunrise Computer Systems into a $40 million business and one of the state's largest value-added resellers.
Founded by Howson and his wife as a reseller for Digital Equipment in 1984, Sunrise now employs 45 staff in its dealership arm and 35 in its training business. It is a tier-one reseller for big name vendors including Compaq, Toshiba and Cisco.
From its offices in inner-city Milton, the company services a customer base which spans the State. Sunrise sales staff make regular visits to customers in regional centres such as Gladstone, Townsville and Rockhampton.
Howson sees regional Queensland as something of a neglected market.
"Our strategy is to have people up there regularly," said Howson. "It helps for people in the region to know who you are and what you stand for." Testimony to this regional focus is one of Sunrise's most recent wins, a major network integration deal at Blackwater Mine.
The public sector
Government buyers make up the biggest part of Sunrise's business and many of its country customers work for decentralised departments such as Health, Primary Industries, Education and the police service. "Clearly one of the reasons why people deal with government is because they have large budgets and generally they do spend them," continued Howson. "Everybody would recognise that the corporate business is not as large in the Queensland marketplace as it may be in Sydney and Melbourne."
Public sector uncertainty following Queensland's change of government a year ago meant spending was slow in the first half of the current financial year, but Howson believes the market is beginning to take off again, and is likely to remain busy until June, when the budgetary cycle begins again.
While a fairly reliable source of revenue for big players like Sunrise, Howson says basing your cash flow estimates on public sector spending can be a dicey game.
"Our biggest difficulty in doing business with government is the cyclical nature - large licks of business simultaneously then quiet for two or three months.
National customers are likely to be a major focus for Sunrise this year. Its corporate customer list includes several Brisbane legal and accounting firms and private secondary schools, as well as some major mining companies, but Howson has set his sights on snaring more big business.
Six months ago Sunrise formed an alliance called Daintree, which sees it teaming with resellers in other Australian states to provide national coverage. The alliance has already generated some custom from Telstra.
"A number of like minded dealers . . . felt that we were precluded from national deals because we don't seem to have a presence in other states. So we felt that by getting our heads together and setting up a company and putting the right resources in place, that we could position ourselves to at least be candidates for national deals and national roll-outs," explained Howson. "We want to present Daintree as an alternative to the established national dealers like AMS and Ferntree."
"Now that Daintree is starting to flex its muscles, it's something we may want to present to [other resellers] overseas," he added.
The way Sunrise's large customers buy their product is also changing, and the dealer is frequently called upon to facilitate leasing deals with finance companies.
"More people are looking at that and the rates are particularly attractive and aggressive," said Howson. "It's becoming more relevant in government as well - it was never high on the agenda a couple of years ago."
Lease of life
Government purchasing panels have approved a number of leasing organisations for departments to work with and Sunrise is also able to negotiate deals for companies with the leasing organisation of their choice, if required. "We look to facilitate the sale and what the customer wants."
Like most former PC resellers, supplying this type of value-added service is likely to be the key to Sunrise's future success, with offerings such as network integration, helpdesks and new Internet/intranet-related services also featuring prominently in its bag of tricks.
To some extent, the company has been selling add-on services longer than most, having established its 10-classroom training centre, in Spring Hill, Brisbane, at the same time that its dealer arm opened for business. Marketed as Pollak Partners, the training centre originally specialised in generic desktop applications training but has moved towards offering customised training programs, such as a recent contract win to train teachers around the State on a new education software system.
Some restructuring of the training business appears to be on the cards, as the company responds to a softening in the market in recent months, and a change in the way customers want their training delivered.
"We've seen a change in the training market in the last 12 months and it's becoming a lot more [oriented towards] customised training to the particular client's needs rather than scheduled courses," said Howson. "There's a need for a much more flexible approach and a lot less structured approach."
Whether this move towards greater flexibility will mean a change in the ratio of contract to permanent staff used by the centre is not yet certain. At present the majority of its trainers are full-time employees.
"It's something that we have to continuously keep under review and we have made no decisions on that," said Howson. "The key to it is flexibility, being able to use people with the skills when we want them."
A model which relied more heavily on contractors would also have the advantage of reducing non-chargeable hours for Sunrise and placing the onus on trainers to keep their own skills up to date.
"The market is changing quickly . . . and it's incumbent on the trainers to keep up with that," said Howson.
Contract or permanent, Howson attributes much of Sunrise's success to the quality of its staff. One of his initiatives in this area has been an informal graduate recruitment program - devised three years ago after the company experienced difficulty finding high calibre candidates for the positions it had on offer.
"We invested in a number of young people that are straight out of university and we've tried to grow them into our business," said Howson. "In the main it's been fairly successful and we've got good young people - it's taken them a while to mature but the proof's in the pudding."
Focusing on core business is the other key to Sunrise's success. The company gears all its activities towards its major government and corporate customers and has no plans to open additional offices, dabble in PC assembly, or woo the SOHO market - perhaps a reflection of Howson's philosophy that growing profits rather than turnover is desirable. "We stick to the knitting," he said.
Sunrise Computer Systems
TEL (07) 3368 3338 FAX (07) 3369 7101