Comparex Informationssysteme GmbH is to increase its services operations so that they account for 50% of the company’s overall business in light of falling profits. The Mannheim, Germany company that is traditionally regarded as a mainframe and storage distributor has reported revenue and profit down on last years figures, but says unit shipments in the year to December 31, increased. Comparex reported profits of DM49.1m or $27.3m, a 7.5% decrease on last year’s figures, while revenue dropped 8.4% to DM888.2 or $494.5m. Comparex president and chairman Rolf Brillinger, speaking last week at the company’s annual results briefing in Mannheim, said the company’s figures have been damaged by price erosion within the industry. To counteract these price falls, Comparex is trying to increase its service interests from the current 25% contribution to the business, to 50%. But the company is then faced with the problem of employing enough staff to cope with the expanded business. Comparex wants to employ 100 new staff this fiscal year, a figure it wanted to achieve last year, but didn’t quite manage with staff numbers growing from 1,006 to 1,021. In the services space, Comparex managed to increase its dealings by 8% in the year, and pointed out that a large contract with a German telecommunications company in 1996, has made the figures look slightly distorted and show a smaller growth rate. Most of the growth that did arise came from western Europe. While services is clearly high on the list of priorities at Comparex, Brillinger has pledged not to ignore or push to the side, the company’s storage distribution interests, which include products from Data General Corp (CI No 3,287), IBM Corp and Hitachi Ltd (CI No 3,194). Comparex claims unit shipments in the server and mainframe storage space increased 50% in the year, with Redundant Arrays of Inexpensive Disks, or RAID machines, doubling in volume. Brillinger said claims that the mainframe is dead, are totally unfounded, and that its current position cannot be maintained is untrue. He explained: Growth in the mainframe sector has continued, and it will remain this way for some time to come because of the total cost of ownership and reliability offered. But returning to the problems with decreasing prices, Brillinger said Comparex is struck with a hit on effect of customers waiting until the end of the year to upgrade products, because the longer they wait, the cheaper the price will become. This creates a major problem for the company, which has an average lead time of six weeks, because distribution becomes much more difficult to manage. Brillinger conceded: The customer is king and it will be difficult to change this behavior in the short term. It will clearly take some time for Comparex to sort out its pricing problems, but the company is optimistic and under no illusion that fortunes will suddenly pick up. Brillinger said the company is suffering from frustration at the moment. He explained: It’s like a footballer missing a goal. We have an experienced team, no goal but an experienced team. He went on to say Comparex is well braced for the current year.
