Repairing computers a hot-growth business

Press, 4 November 1986, Page 28

Repairing computers a hot-growth business

By

LAWRENCE EDELMAN,

of Reuters (through NZPA)

New York Fixing broken computers has quietly become a hot business in the United States. So has repairing medical equipment, industrial robots, and a wide range of other high-technology gear. While sales of most types of high-tech equipment have been in a nosedive for the last two years, revenues are booming from servicing anything from the navigation system of a nuclear submarine to the laser printers used by graphic artists. According to a study by Arthur Andersen and Company, a Boston-based research and consulting firm, revenues from hightech equipment servicing will grow 13 to 14 per cent a year, creating a SUS 46 billion business by 1990. By comparison, sales of mainframe computers are expected to rise only 7 per cent a year. Numbers Ike these are begining to draw a lot of attention to the high-tech service industry. “Over the years service was looked at as a cost centre, a necessary evil,” said Mr George Keller, executive director of the Association of Field Service Managers, a trade

group. But, he adds, field service is now seen as a potential profit centre, and equipment makers and independent service companies alike are gearing up to exploit this growing market ityFor example, International Business Machines, while trudging through its second year of falling profits, says it is beefing up its service operations. IBM has cut some service prices for its personal computers up to 24 per cent, a move seen as an attempt by the company, which derives abut SUS 7 billion a year in revenues from equipment servicing, to fight off competition. The. struggling Datapoint Corporation, after being acquired by the New York investor, Mr Asher Edelman, spun off its service group to shareholders. The new company, called Intelogic Trace, is flourishing, while Datapoint just managed to turn a profit in its most recent quarter. Several factors have sparked the growth in equipment servicing, which is still dominated by computer and telecommunications companies, Mr Keller says. Although sales have yet

to rebound, users need to keep running the equipment they have installed. The proliferation of personal computers throughout the workplace has decentralised computer facilities, making it increasingly difficult for the computer department to keep track of its equipment. And, perhaps most significantly, companies are building large computer networks linking computer facilities across the country and around the world. These complex networks are crucial to a company’s operations and require constant surveillance and instant repair when they fail. Because these networks usually consist of equipment from many different vendors, customers are turning to service providers who are not tied to one particular vendor. “Third-party maintenance companies service a range of equipment from different vendors,” said Mr Keller. “They’ve been successful because they are not tied to a single product line, because they service across vendor lines.” In fact, third-party service firms are doing so well that computer makers, unwilling to lose maintenance revenues

from unsatisfied customers, are beginning to sevice their competitors’, equipment. “Vendors are realising that follow-up purchases are directly tied to the customer’s opinion of their service capabilities,” said Mr Keller. “And customers know what good service is.” The rivalry between third-party and manufacturer maintenance organisations is a boon for customers. In addition to lower rates, they are being lured with new services and contract options. These include providing back-up facilities in case a customer’s equipment breaks down, offering to operate a customer’s network, and remote diagnostics, which allow a service company to monitor and even repair equipment over telephone lines. The growing importance of a service operation to a corporation over all has led to new opportunities for field service managers.

They are beginning to move into the upper echelons of management, and field service is now attracting managers from other parts of the company who are looking to move up through the ranks.