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Looking Past the Basic Product : Artecon Basks in Sun's Bright Computer Aftermarket

November 29, 1988|ELLIOT KING

Artecon, in its 24,000-square-foot Carlsbad plant, designs, engineers and builds equipment to customize Sun systems. One time, a customer wanted a tape storage unit with four removable data canisters instead of the two the Sun system offered. Artecon built it. In another instance, a government contractor wanted to use several Sun computers to analyze data on field maneuvers. Not only did the machines have to be altered to withstand a harsh environment, but a long-distance cable was required to attach monitors and keyboards to computers. Finally, when a customer wanted to use Sun hardware in a training application, Artecon invented a computer stand that allowed monitors to slide easily across a table top. The company has applied for a patent on that.

In April, Lambert surveyed the products Artecon had developed for its customers and decided to try to sell them to Sun Microsystems users, which could number as many as 500,000, according to Michele Sandoval, editor of the Sun Observer, a journal exclusively devoted to reporting on Sun. To pursue that opportunity, Artecon created the Workstation Products division. Its aim is to market the tape drives, pedestals, cables, other peripherals and accessories Artecon has designed for its systems integration customers to other Sun users.

According to Alper of Computer Systems News, only a few companies are actively pursuing the Sun aftermarket and Sun itself only manufactures a limited number of peripherals.

"Nobody is doing this at the same level as we are," claimed Douglas Cooper, Artecon's director of marketing. 'Our aim is to be the premier vendor of products for the Sun aftermarket."

Outside observers believe the approach could work. "Since the growth in the market is tremendous, the peripheral market will be large," said CAP's Kapoor. "There is no reason why they could not be as large as AST." Irvine-based AST Research is a $200-million company which initially sold add-on boards for the IBM PC market.

In just six months, the Workstation Products division has grown to contribute about 40% of Artecon's revenue. And that figure should grow steadily. "The aftermarket could define the company," Lambert said. "There is no reason why eventually we could not be a $50-million or $100-million company."

As personal computers such as the IBM 386 family and the Macintosh II are linked to work station networks, and as companies release a new generation of machines that compete directly with Sun models--the first should appear in the first quarter of next year--the demand for third-party aftermarket products should grow as well. To meet that potential, in addition to marketing its own equipment, Artecon hopes to become the exclusive distributor for products developed by other companies for the Sun market.

Lambert sees a synergistic relationship between the aftermarket division and the system integration business. For example, the Loma Linda University Medical Center bought two Sun systems from Artecon for its state-of-the-art proton therapy machine to treat cancer. Since then, Loma Linda has opted to buy directly from Sun. But it still purchases the special cables it needs from Artecon.

Although the aftermarket may eventually produce big revenue, systems integration will keep Artecon close to the customer. With the new government contract, Lambert said, "The unemployment office told us that they are going to have anybody who does not receive their unemployment check call us directly."

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