In a move which has been warmly welcomed by the local channel, Compaq has announced plans to expand its South Australia operations significantly and create 235 extra jobs over the next 12 months.
In a deal that has won the approval and the funding of South Australia's Government, Compaq plans to establish a customer service management centre, as well as expand its application development and integration centre.
Compaq manager for South Australia and the Northern Territory, David Kelly told ARN that the decision to expand company operations in Adelaide could be attributed to a number of factors.
"Compaq in SA has been performing very well, especially in the last quarter. Adelaide has the communications infrastructure to support the business and also some important cost incentives, such as low rent and tax breaks," Kelly said.
However, according to Kelly the main attributes Adelaide has to offer is the people.
"Adelaide has a high number of IT educated people in the workforce and the rate of attrition here is very low," he said. "This is a place where people come for the lifestyle so it attracts a lot of highly skilled people."
Dean Calvert, director of Adelaide-based integrator DA Calvert and Associates, welcomed the deal although he concedes it may cause a short fall in IT staff initially.
"There will be some effect initially, because the Compaq deal will attract a lot of local and interstate talent," Calvert commented. "But over the course of the next few months we will get people that will leave in search of a job in a smaller company. People get in with a company like Compaq and feel lost because it is so big."
Calvert believes that the Compaq announcement is part of a trend towards conducting business in SA that will ultimately see Adelaide become an important IT centre.
"Companies are attracted to Adelaide because it is a lot less expensive than Sydney or Melbourne and that can only be a good thing for the locals," he said.
Kelly explained that the expansion would not signify a change in focus for the PC vendor, but would enable a stronger emphasis on e-business applications and application development projects.
"The application development centre will be developing state-of-the-art applications for use throughout Asia, and the communications centre will be the focus of our service and management services in Australia," Kelly said.