A Smart Bet In A Growing Market Has Big Payout

Tim Klan, president of Expert Computers, an Erie, Pa.-based system builder, began moving away from low-end, commodity PCs and servers after the dot-com bust and began focusing on highly specialized systems where he could obtain a leadership position. In particular, he aggressively moved his company into the surveillance and security segment—while tier-one OEMs took their time evaluating it—and is now reaping the rewards of a smart bet.

Last year, Expert Computers saw 45 percent year-over-year growth in units shipped, providing custom-built surveillance and DVR systems to solution providers who are delivering the products to local law enforcement agencies, casinos, private security companies and other accounts that can't get enough of the hardware-based video recording products.

"We found we have to add value to the systems we build," Klan said. "We can't compete just on the price of the systems."

DVR and IP surveillance technology are not the only areas of focus for Expert Computers. The company builds industry standard servers, whitebooks and desktops, is a channel partner of Intel and is part of Microsoft's system builder program.

Expert Computers maintains a 9,000-square-foot facility with 14 employees, not including part-time staff for seasonal demand, out of which it reported shipping about 2,900 units and bringing in $5.4 million in sales last year.

Klan said that his company has worked in lockstep with his reseller customers to better automate processes at his facility, improve efficiency and finish more of the customization and manufacturing at his site rather than elsewhere in the pipeline. "There are some things we can do with [our] DVR servers that the larger vendors can't do," Klan said.

Klan said it's common for Expert's customers to need 24 Tbytes of storage in a server or 128 channels of video, while most of his competitors will only go up to 32 channels per server. "They [customers] can monitor up to four times the amount of camera states with the systems we build," Klan said.

Klan credits both his company's persistence and its flexibility with being able to introduce the leading-edge technology into its product line, including IP surveillance products, faster than larger competitors.

The market for IP surveillance and security solutions has expanded since 9/11, and now the technology has caught up with the market. Research firm RNCOS has predicted the IP surveillance space will almost double to a $4 billion annual market by 2010. With Expert Computers knee-deep in IP surveillance architecture for several years—and before most other competitors—the company appears well-positioned to benefit from the growth.

With the price of hard storage dropping over the past three years, and software becoming more robust, the opportunity to provide ever-improving surveillance solutions to solution providers and other system builders has grown significantly.

One of Expert's advantages in the fast-developing market is its experience, according to Klan. The company has been building IP surveillance systems for seven years and has gained the expertise to adapt to ever-higher-performing technology, he said.

One customer that agrees with that assessment is Bob Streeter, president of DVR Systems, a Conneaut, Ohio-based system builder and solution provider. "Tim has built those for us since 1998," Streeter said. "There's a number of reasons we went to Tim. Price is certainly a factor. He's very aggressive in his pricing structure. We've looked at other builders, even the few builders that came in a little bit under his price."

But, Streeter said, in addition to the cutting-edge technology and price competitiveness, he has developed a strong personal relationship with Klan and his company. "I can pick up the phone and get him immediately," Streeter said. "And he's always stood behind his product."