DandH SMB VARs See Boom Times In Bad Economy

Steve Endsley, general manager of Tri-State Computers, a Dover, N.H. solution provider, said his sales in June and July were up 40 percent. That's the best summer sales spike Endsley has seen in five years.

"The economy is in shambles and people are working and shopping more at home," said Endsley. "Gas prices are forcing more online shopping. Consumers would rather let UPS pay for the gas. June and July are usually our worst two months of year. Service and sales tends to go down in the summer. We're usually dead this time of year. I kept waiting for the drop-off and it never happened."

Endsley says that the bad weather and the bad economy have more people staying at home and spending more time on the computer. "With all the rain this summer people are either at the moves or on their computer," he said.

Tri-State, which builds its own systems, usually sells about 5 to 12 systems a month in the summer. This summer, the company is selling 20 to 30 systems a month, said Endsley.

Solution providers at the DandH show also said the thunderstorms that have walloped the Northeast this year have led to a huge increase in power backup systems and services for consumers and businesses whose systems have been fried by lightning.

"The lightning storms have been unbelievable for business," said Endsley. "No one wants to pay $160 to $180 for power backup until they get hit by an outage. We're selling lots of APC. Certain times of the year are more susceptible to lightning strikes. In the old days, we'd stock more modems. Now we stock more routers, network cards, system boards and power supplies."

Mark Wineburg, owner of Yes Computers, an Apple solution provider in North Hampton, Mass., said he is also benefiting from an unusually strong summer market. He said his business is up 40 percent this summer compared to last year. "We thought we'd see a lot lower spending this summer. But more people are staying at home. It's called Staycation. It's been one of our busiest summers ever!"

Wineburg said the spike in gas prices has businesses and consumers viewing the cost of a new computer in comparison as a relatively modest expense.

Rob Chapman, co-owner of Computer Escape, a Randolph, Mass. solution provider, said his business is up 30 percent in the June and July. "The lightning and thunderstorms have people coming in all the time with power supply issues and system board upgrades," he said. "A lot of the boards fried by thunderstorms are older boards that aren't manufactured anymore so people will buy a new computer."

A tax-free holiday shopping weekend in Vermont led to a $750,000, two-day windfall for Small Dog Electronnics, an Apple solution provider in Waitsfield, Vermont, said Art Hendrickson, a purchasing agent for Small Dog Electronics.

Overall, Hendrickson said Small Dog's business is up about 15 percent this summer. He said a good deal of that is attributable to Apple's momentum in the marketplace and growing popularity with both consumers and businesses.

Ken Kaplan, the owner of Kaplan Computers, a Manchester, Conn. solution provider, said his sales are up about 20 percent this summer mostly from consumer repairing systems rather than buying new ones. "The economy is bad for people," he said. "People don't have as much money to drop on a new computer. They'd rather spend a couple hundred dollars repairing an old machine than buying a new one. June and July were record months for billable hours for us."

Kaplan, for his part, thinks his business success is based far more on how his team serves customers than the economy. "It's not so much what is going on in the marketplace," he said. "It's what is our level of commitment? Are we in the game the whole time we are out there with the customer. I think this could be very good year. And next year could be even better. But it's based on how hard we work. That has always been the case for most small businesses."

Bruce Stevens, an account executive for Northern Data Systems, a Falmouth, Maine software provider for government, medical, utility and credit unions, said the company's business is based on long sales cycles and business has been up the last several years. "Business is good," he said.