Tech firms upbeat, ready for pickup in sales

NEW YORK -- A big factor in this year's stock market recovery is the expectation that U.S. companies, particularly small businesses, will increase spending on computers, software and other high-tech equipment.

Technology companies, also upbeat, are prepared for a pickup in sales to small businesses. And that means the second half of 2003 should be a good time for small business owners to be buying.

"Prices have come down significantly," said Mika Krammer, a research vice president for Gartner Inc. Moreover, "they've created a specific functionality for small businesses. ... There are more tailored solutions than there has been in the past."

Business owners need to consider their purchases carefully, even if they're only getting a desktop or notebook PC or peripherals such as printers, scanners and faxes.

Owners buying between one and four PCs often head to a retailer such as CompUSA or Staples, but that might not be the best choice. Krammer said computer resellers might be a better option, as is buying directly from a manufacturer.

Better customizing

The advantage of buying from resellers or manufacturers is that they often are better able to customize a machine -- hardware, software or both -- to meet a company's needs. Perhaps more important, one of their goals is to provide technical support to business people who aren't always proficient in using computers.

Retailers do try to cater to small businesses. But often they're offering the same machines they sell to consumers -- for example, on its Web site, CompUSA lists the same Compaq Presario S4220NX mini-tower on both its consumer and business pages. There isn't any special business software included, according to the site.

Computer makers note that they manufacture machines specifically for business use, even by the smallest of companies, and that a PC intended for consumers might not be able to handle certain tasks that a business needs.

"The key differentiator between consumer and small business products is whether they're looking to do any kind of networking of systems" that will require a server, said Jess Blackburn, a spokesman for Dell Computer Corp.

Another difference, Blackburn said, grows out of the fact that business computers are expected to be in service longer than machines created for the home market. So business PCs are designed to better accommodate anticipated changes in software and the Internet, he said.

James Barnes, a spokesman for Hewlett-Packard Co., said that in a business PC, "there typically is going to be memory specs that are more in line with the day to day needs of a business."

When shopping for peripherals, a business owner might want to consider purchasing them together in a multifunction machine.

One reason small businesses are expected to buy more high-tech equipment this year is a huge increase in what's called the Section 179 tax deduction. Named for an Internal Revenue Code provision, this deduction allows a small business to expense rather than depreciate up to $100,000 of the cost of new equipment, including computers. Last year, the deduction limit was $25,000.

'Look at the tenure'

Business owners who decide to buy through a reseller should keep some caveats in mind. Krammer, the Gartner vice president, said that as many as 70 percent of resellers are targeting small businesses because these companies currently represent a good opportunity; but when larger companies start to increase their high-tech investment, some resellers are likely to migrate to that business, possibly leaving their smaller customers in the lurch.

"Look at the tenure that a given vendor has in the market, and what it has to offer," she said. "It might not be there in a couple of years."

If you're not sure what kind of system you need, it makes sense to work with a reseller who can understand the requirements of your business.

It's also a good idea before you visit a reseller to get yourself a grounding in the kinds of technology available; there are plenty of books on the market that explain high-tech to neophytes, and some high-tech companies do the same on their Web sites.

Another alternative is to get some help from someone who's high-tech savvy. If you don't know any business computer geeks, you can try your local Small Business Development Center (you can find one online at www.sba.gov/sbdc). SCORE, the organization of retired executives who offer business advice for free, is another resource (it's findable at www.score.org or by phone at (800) 634-0245).