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May 12, 1988

ATLANTIC SEEKS TO WIN NETWORK SYSTEMS BUSINESS BY EXTENDING FLEX LEASE OPTION

By CBR Staff Writer

Atlantic Computers Plc’s fledgling Atlantic Network Systems Ltd is flexing its marketing muscles with the adoption of its parent’s flex leasing strategy on installed data communications equipment, in the hopes that it will make it the number three player in the UK data communications stakes. Called Flexcom, the value-added leasing package is being pitched at customers who have an investment of at least UKP50,000, and is modelled on the Flexlease option available to mainframe users from Atlantic Computer Systems. The Flexcom option is available for Atlantic Network’s full product range, which comprises packet switches, network management systems and equipment, and high speed modems, plus maintenance facilities. Under the scheme Atlantic buys the customer’s existing configuration – which may be from any manufacturer – in return for a leasing contract which has a pre determined Flex Point, when the user can swap out equipment. This flex binds the user to buying replacement data communications equipment to at least equal the sum of the original deal from Atlantic. Flexlease has been criticised by users in the past as a ploy by Atlantic to lock customers into a series of increasingly costly contracts although the company describes it as a penalty-free option matching a user’s financial and technological needs. Atlantic concedes that it is starting from a miniscule base in the data communications equipment market, and is relying on the new flex option to win potential market share before customers are ready to swap out their existing equipment. Marketing manager Malcolm Reip said that Atlantic Network Systems will tap its parent customer base for its top 500 users for business and the service is expected to be launched on the continent and in the US within the next two years. The move comes four years after data communications equipment company – which was then called Lion Systems – was bought by Atlantic, but more significantly just nine months since Warren Palmer moved across from the main group to become managing director of Network Systems. Since that date Lion Systems has changed its name and identity with many of the original staff replaced.

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