National capital region roaring with growth

Published: February 22nd, 2008

Mont Tremblant, Que. – Tech Data Canada, along with CDN and Direction Informatique, for the first time hosted a panel discussion with some of the leading solution providers in the National Capital Region, which includes the province of Quebec and the greater Ottawa area.

Participating in the roundtable discussion were BZ Inc.‘s Francois Bergeron of Quebec City, Stoneworks Technologies Inc.‘s David Chow of Ottawa, Expr@com Technologies Inc.‘s Jean Julian of Montreal, Informatique Pro Contact Inc.‘s Michel Poulin of Quebec City, and Harris Computer Services‘ Ernie Sherman of Nepean, Ont.

According to Greg Myers, vice-president of marketing for Tech Data Canada of Mississauga, Ont., the national capital region had a faster growth rate in 2007 than even Western Canada, and this without any Olympics or an oil boom.

“The east has a well diversified business and Quebec especially around solutions and customer segments. The VARs here are strong from a solutions point of view. It is difficult to be a generalist in this market and compete with the direct market VARs,” he said.

What amazed Frank Haid, the vice-president of sales for Tech Data Canada, about this region is that the solution providers here grew in the SMB space, which is very hard, he said, because customers are price sensitive.

“You have to work as hard on 20 PCs as you do with 200 PCs,” Haid said.

CDN/Direction Informatique: What is driving the business here?

Jean Julian: It’s been the best growth year since Y2K and that was seven years ago. It’s the seven year itch. This is the year of renewal and many customers will continue to upgrade next year, but I do not think it is going to continue after that. We were certainly due for a renewal of PCs, networking equipment and servers, and virtualization is also a factor. So the old machines in 2000 were due for a renewal.

CDN/DI: Do you see Linux making any headway in your markets?

Francois Bergeron: Citrix (NASDAQ= CTXS), VMWare (NYSE: VMW) and Zenworks are well established here. If you try with Linux you get trouble when it interfaces with the hardware and SMBs are afraid of Linux. We do not see it as a viable OS here. In SMB you cannot find the expertise easily for Linux and if you do it costs a lot for the customer. Some customers contract it out for two years and then the people quit because they too do not know how to support it. The users here like Windows and the best practices are on Windows.

David Chow: From a cost perspective the government is open to Open Source, but it’s the support that gets them. The feds have about 14,000 IT professionals and within the next ten years about 10,000 of them are set to retire. That is a huge number. Those people have the Unix background and the in-depth knowledge. This is not well documented, but the shortage of talent will drive a number of things such as standardization from support and costs in the OS depending on the line of business from the government. We thought that the government would be a key driver of Open Source, but it hasn’t been. It is all about succession planning.

CDN/DI: Are customers demanding Web 2.0?

Jean Julian: Instant messaging is starting to get into our clients’ environments. They are demanding it. Now it’s more than e-mail. It’s about blocking Facebook because it takes up too much worker time. Social networks and LinkedIn are good for business. The social aspect of technology will play a big part if it can be set up for the appropriate price. Unless that is done SMBs will not go for it. If you look at Sharepoint up to now you have to spend mucho dollars. What you need for Web 2.0 is a $600 pre-packaged solution. It will come to that.

David Chow: You have to differentiate the SMB from others. Typically those SMBs would not do what enterprises do. Portals were supposed to do that. I’m still not sure about Web 2.0, but it has to be inexpensive and it has to come in a smaller scale for it to happen. MSN Instant Messaging and IBM Lotus Sametime look the same. They have linked key suppliers and partners. With security access you can easily link to someone and you can see if he or she is not there. It is a better solution than getting 300 e-mails a day.

Francois Bergeron: I do business with smaller customers and just with e-mail. Tools such as Sametime have to be made closer to the business. For smaller groups inside the organization Instant Messenger is a better application.

Jean Julian: In the last two three years the Blackberry has become the same as Instant Messenger.

CDN/DI: Do you think the Apple iPhonewhen it comes to Canada will fall flat?

Ernie Sherman: The large problem customers have with mobility is security. If you look at the type of client that is using it they’re under 30 years of age and they’re all over the map. With the Treo, the Pocket PC and the older clients use Blackberry and that is it. It will be the younger workforce that will demand it from IT. Typically in an SMB there are no policies in place so the young ones will drive the change. That is where the problem is. This is not in the large enterprise space.

Jean Julian: It is going to be interesting to see who wins the pocket device battle.

CDN/DI: Is it still a case of winning?

Ernie Sherman: I don’t think so. Everyone is fighting to be different. The iPhone is about a culture change in business.

Jean Julian: Most of the organizations choose Blackberry. It’s easier to support.

Francois Bergeron: It’s a money decision. What is the best for me, and if my suppliers use the Blackberry then there it is. We will use the Blackberry.

Ernie Sherman: They might make a decision if they need it just for e-mail. The Blackberry is the most logical device for that.

CDN/DI: Do you see a downturn in the economy coming?

David Chow: If you’re in oil and gas then you’ll be fine, but we will see a lag. I think we will follow the States with an out-right recession.

Francois Bergeron: I find a new market. Maybe it’s in outsourcing. I will try to balance it and keep on growing year after year. I don’t see this slowing down.

Michel Poulin: It could be good in SMB. Some companies will fire technical people from their team. It is always one of the first places they cut and from a total cost of ownership perspective it is wise to go into managed services.

Jean Julian: Business will always depend on technology. The need for support of that technology will always be there. If we sell less hardware there will still be a need for services and support.

Michel Poulin: We can talk to customers about total cost of ownership, but the big challenge will be keeping employees.

Jean Julian: We lost two employees and it wasn’t a case of competition. One became a bus driver. He now makes $80,000 with no stress and no late hours with customers on his back. He doesn’t have to take exams anymore. The other one is in air traffic control with a big salary. It’s a job that he can have for the rest of his life. The thinking with him is if you are going to have a stressful life than why not make more money at it.

Michel Poulin: We introduced a new program for employees with benefits and all the free fruit they can have. We always keep it in the kitchen. We need to do the small things for our employees.

Francois Bergeron: I have a bonus program for technical people and sales staff. This is the way I keep my technical people. For some that have an objective they share. They don’t want to lose calls and one year from now this will be the best way that I can produce people who can overachieve.

CDN/DI: Do you think the shortage of IT talent will stand in the way of growth?

David Chow: You have to find staff that will fit your business model. We can bring in junior people and we do not want to tap other people’s people.

Jean Julian: The lack of people means the lack of service. We have to find a way to drive people into this industry. Without more people you cannot provide clients with technology unless you have technology that does not need many people to manage it.