Difficult times, desperate measures
By Aleksander Nowacki
The competition between Prokom and ComputerLand, the country's two largest systems integrators, to win a tender for computer deliveries to public schools shows the extent to which even the leaders of IT are desperate for business, say experts. The contract promises profit margins of around zero.
"All the companies on the market are experiencing difficulties," said Michał Janik, analyst at BDM PKO BP. "You have to look for business everywhere."
The Education and Sports Ministry is looking to buy more than 10,000 computers in four installments. The first installment has already been awarded to Biatel, whose offer featured Optimus hardware. The results of the second round are not yet official, but the least expensive offer is known to be that of ComArch, which provides NTT computers.
"We're a listed company," said Janusz Filipiak, ComArch president. "We've got to show that we're doing business." He went on to say that it was an atypical project for the company to engage in, as ComArch contributed little added value. While the company's input usually accounts for 70 percent-80 percent of the value of a contract, it will account for much less this time.
Filipiak was, however, keen to point out that it was not merely a trade contract, and a certain amount of integration work would have to be done.
Neither of the two market leaders stands much chance of winning the contract, and Prokom declined to comment on its participation, as the tender procedure has not been completed.
PKO BP's Janik commented that Gdynia-based Prokom specializes in larger scale projects, but they tend to bring in revenue only after a significant lapse of time.
"These revenues are delayed in time and companies need funds for their current activities," he said. "This is one way to find them."
Michał Michalski, ComputerLand spok-esman, agreed that the situation in the market is not encouraging, but played down the connection between the company's participation in the tender and the shrinking market.
"Even when the market picks up, I can see no reason why tenders like this shouldn't happen every now and then," he said.
Nonetheless he was keen to emphasize that the company's strategy is focused on advanced projects, characterized by high value added to the client and correspondingly high margins. Most of the projects are realized in the banking and finance sector, which accounted for around 50 percent of ComputerLand's revenue in 2002.
Contracts with the public sector amounted to 10 percent of sales last year, and the trend is for the number to fall this year. Twenty-three percent of the company's revenue last year came from hardware deliveries.
Michalski stressed that very little has been happening on the market for public procurement since early 2002 and that the first half of this year has been particularly bad.
Wojciech Krajewski, IBM Polska's financial director, blamed the poor condition of the public procurement market on political uncertainty.
Officials, insecure in their jobs, are unwilling to make decisions, he said. Krajewski hopes that the strengthening of the government following the recent parliamentary vote of confidence may bring about more security and create a more favorable atmosphere on the market.
