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Wednesday, May 23, 2001
 
2001 Small Business profiles

Computech reaps rewards for being cheap, effective

By Luke Timmerman
Seattle Times Eastside business reporter


Andrea J. Wright / The Seattle Times
Frank Zaccari, head of Computech Systems in Kirkland, has broadened his company's reach into Sun Microsystems, IBM and other big equipment makers.

When the economic slowdown arrived last winter, Frank Zaccari felt vindicated.

Until then, it was frustrating to see companies fling millions in fresh IPO money at new computer servers and equipment.

Either companies weren't hunting for bargains, or they snubbed the used, fixed-up servers dealt by Zaccari's company, Computech Systems in Kirkland.

Besides that obstacle, big sellers of new equipment from Hewlett-Packard and Sun Microsystems and others have always considered the likes of Computech to be vultures.

They whisper to customers that used dealers sometimes handle stolen goods, or that their maintenance people have no clue. Better to buy new, they say.

That doesn't get under Zaccari's skin anymore. Being cheap and effective is fashionable again, and it has helped Computech reap a windfall.

Zaccari, the president and chief executive officer of the private company, said the 30-person operation has had two straight quarters with 200 percent profit gains and better than 101 percent year-over-year sales increases. He's projecting a record $15 million to $20 million in sales this year.

Zaccari counts companies such as Wal-Mart and Southwest Airlines among his customers, who are constantly hunting for cheap computer equipment.

The difference now is that Computech's demand is up as companies adopt more frugal ways, while the dot-com demise has given it plenty of supply.

"Companies still have to do business, it's just that now they're wondering if there's a better way," Zaccari said. "They want to know, `Can I get a better price without sacrificing quality?' "

Roxanne Beyer, a computer-capacity planner with Weyerhaeuser, said Computech has delivered on that sort of promise to her company for the past seven years.

There were plenty of internal doubts about its reliability at first, but Beyer said Computech has proved itself with effective customer service and by offering prices that typically save her 30 percent to 60 percent.

Clamping down on spending that much might be painful for many businesses, but it's been a blessing to countercyclical businesses like Computech.

Companies in similar sorts of businesses are careful not to sound like they're profiteering from malaise, but the downturn clearly has its beneficiaries.

Used computer resellers, bankruptcy attorneys, business graduate schools, outplacement firms and financial institutions that do mortgage refinancing are just a few.

Consider outplacement. Moore & Associates of Bellevue has been regularly holding 10- to 30-person job-seeking workshops for laid-off workers. Compare that with the quiet one-on-one sessions it held with free-agent executives a year ago, and it's clear how revenues jumped 50 percent and the customer base quadrupled last quarter.

Business schools, many that couldn't compete in the past several years with the lure of dot-com wealth, are suddenly popular. Seattle University has had a 26 percent increase in applications to its graduate business school, and the University of Washington received 10 percent more applications than a year ago.

Colleges have a delicate balance. Michael McKeon, dean of admissions at Seattle University, said his school hasn't seen it yet, but a downturn could hit parents in the pocketbook hard enough that they would decide not to send to their children to a private college.

Computech can relate. It's doing well now, but would be hurting if the economy were so sour that technology spending vanished.

Besides the downturn, Computech is fortunate it didn't give in to fears of missing the dot-com mania. Last May, Zaccari stuck $100,000 into a warehouse remodeling instead of turning Computech into an online company.

The remodeling enabled Computech to broaden its reach from Hewlett-Packard into Sun Microsystems, IBM and other big equipment makers, leveraging a customer list of more than 5,000 in 30 countries. As dot-coms fizzled, it looked like a smart bet.

Mostly, Zaccari said his company has benefited from attitude changes. Instead of fearing being overwhelmed by competitors with better technology, businesses are into penny-pinching.

"They want to know what's this going to cost, what business problem is it solving, and what's my payback going to be," Zaccari said. "They're looking for return on investment, and that's helped us."

Luke Timmerman can be reached at 206-515-5644 or ltimmerman@seattletimes.com.

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