SMAC Data Systems wins string of federal PC deals

SMAC Data Systems Inc. in recent weeks has captured a string of federal PC pacts the latest return on the company's 20-month-old investment in a PC manufacturing strategy.

SMAC last week announced a $462 000 award to supply 200 workstations and multiprocessing servers to the Elkton Federal Prison Ohio. Last month the General Services Administration awarded SMAC a contract under its multibillion-dollar Federal Acquisition Services for Technology program and Unisys Corp. selected SMAC as a supplier under its Scientific and Engineering Workstation Procurement II contract with NASA.

These awards follow two sizable Navy contracts awarded to SMAC earlier this year: an indefinite-delivery indefinite-quantity pact to supply 5 000 systems to shipyards and a blanket purchase agreement worth at least $20 million to supply systems for the Navy's IT-21 program. SMAC officials said they believe SMAC an 8(a) company is the first business of its size to win an IT-21 contract.

The wins stem from what SMAC president Ashok Mehan described as a "key strategic move" for the company. In January 1996 SMAC embarked on a strategy to become a PC manufacturer. SMAC was founded in 1990 as a PC wholesaler selling such components as CPUs and memory to small resellers. But the major distribution chains began to push SMAC's traditional customers out of the market. "I saw a shake-up in the market " Mehan said.

SMAC decided to leverage its component supplier relationships and lines of credit to become a PC maker. The company which recently expanded its manufacturing capacity can produce 70 000 units annually. Rolin Hua vice president of operations at SMAC said the company's goal is to become the largest PC manufacturer in the Washington D.C. area. SMAC had $14 million in revenue in 1995 the year before its manufacturing transition. The company now expects $25 million in revenue for 1997.

Locally SMAC faces such PC builders as International Data Products Corp. which had federal information technology revenue of $88.4 million in 1996. SMAC also competes with such "Tier One" PC makers as Dell Computer Corp. and Gateway 2000 Inc. according to company officials.

The task of competing against the industry's giants "is not going to be easy by any stretch of the imagination " said Mark Amtower an Ashton Md. consultant. He said that marketing will be crucial to the company's success. "They have to define their niches and identify buyers extremely carefully " he said.

SMAC officials said they plan to compete against the larger PC makers by offering a greater level of customization. While larger PC makers offer customers a choice of models SMAC allows customers to "order just the type of configuration they want " Mehan said. Customization he added applies to every part of the PC including the case and power supply.

In addition the company is investing in its own IT infrastructure to "sustain and manage growth " Mehan said. SMAC is in the process of installing SAP America Inc.'s R/3 enterprise resource planning system to manage the company's operations. The system is slated to go live Oct. 1.

The process of installing R/3 is arduous but Mehan said SMAC will "benefit down the line when we are going head-to-head with the Tier One manufacturers."