Demand Grows for Computer Maintenance : Service Sector Projecting $30-Billion Revenue in ’87

Computers may be getting smaller, but the industry that keeps them running is growing by quantum leaps.

“During the computer industry slowdown of 1985 to early 1987, everyone suddenly realized that maintenance services is a recession-proof industry,” said George B. Keller, executive vice president of the Assn. of Field Service Managers International. “When things soften, people start to notice which segments are doing well.

“During the recession, many companies decided not to buy new computers, but they didn’t let their maintenance contracts for their old computers slip.”

This year, computer maintenance companies in the United States will generate a hefty $30 billion in revenue, the field service group said. By 1990, it expects annual domestic revenue of $46 billion for the industry.

The computer maintenance sector has grown between 12% and 14% annually in recent years, according to Keller.

The association’s companies service a variety of computers, including automated tellers, medical diagnostic equipment, desktop publishing units, telecommunications machines, so-called intelligent buildings and photographic equipment.

Larger Firms Contributing

The association, founded 11 years ago, has members ranging from one-man operations to industry giants International Business Machines Corp., Digital Equipment Corp., Eastman Kodak Co. and Xerox Corp. Participation by major computer companies has increased considerably since the recent recession.

Many of the larger companies provide scholarship funding for the association’s educational programs. According to Keller, they began paying to educate servicers when they realized that their maintenance divisions represent a large chunk of their earnings.

In Digital Equipment’s case, computer maintenance brings in 30% of the company’s annual revenue, Keller said. The stability of the industry also makes it attractive to investors, Keller said.

Corporate raider Asher Edelman, for example, is chairman and owns about 8% of Intelogic Trace Inc. of San Antonio. Intelogic was spun off from DataPoint Inc. in 1985, and most of its customers own that company’s computers, a spokesman said.

In February, BellSouth Corp. of Atlanta bought DataServe Inc. of Minneapolis and London for about $96.5 million in stock and is planning to buy U.C.S. Corp. of Roanoke, Va. for about $79.1 million.

Versatility Stressed

In 1984, Grumman Corp.’s Grumman Systems Support bought Computer System Support Corp. from its founder, and in March, it purchased the field service department of Arrow Electronics Inc. Alan Andrus, the division’s president, refused to reveal the purchase prices, but he said his unit, which began by offering internal services to its Bethpage, N.Y.-based parent in 1971, now serves a large number of outside customers.

“In the past, many offices just had one mainframe computer,” he pointed out. “Now you see more networking of different kinds of computers. This has made many customers look for third-party servicers capable of fixing many types of equipment.”

This fall, the association is promoting its educational programs. Keller said many of the technicians lack training in inter-personal skills and there are programs to help them in that area.

“These days, servicers have to wear a suit and tie,” he explains. “Not all of them had to look that way when they started out in the industry. In our seminars, we spend some time on things like how to dress.”

The association also is working with Syracuse University to offer a bachelor’s degree.