Businesses cut back on tech buys

Feeling as if that slow computer at work needs an upgrade? Don't count on it getting replaced anytime soon.

To cope with the recession, businesses in Middle Tennessee and beyond are curtailing technology purchases and delaying equipment upgrades, and they have even begun to hoard use of cell phone minutes.

The results have been damaging to tech-reliant local companies that rely on such technology sales.

Dell said last week that it was closing part of its Lebanon facility that manufactures desktop computers because of weaker sales for such products. The closure moved 250 to 300 employees from Lebanon to Nashville, said spokesman Ken Bissell.

"We foresaw it coming," Bissell said in an earlier interview regarding the softness of PC sales in the market. "So, not surprisingly, it's a challenging market right now."

Unit sales of PC laptops and desktops to primarily small and medium-size businesses have declined the past two years, dropping 9 percent in 2007 and falling an additional 2 percent in 2008, according to New York-based NPD Group, a research firm.

"The commercial purchasing cycle … tends to be around budgets, and given the fact that business got tough a few months ago, it's likely we haven't seen the depths of (it)," said Stephen Baker, NPD vice president of industry analysis.

Nashville-based Central Parking Corp. said it is curtailing plans to spend $650,000 on updating 100 automated pay stations at its parking garages nationwide this fiscal year in light of the troubled economy.

The update would have given the company more detailed information such as the number of cars in its lots and the frequency of customers. So far, the company has updated just 100 of its planned 300 units.

"We've just decided to hold capital at this point in time unless it is absolutely mandatory that it be spent," said President and CEO Emanuel Eads.

Discounts, family plans

Shawn Thomas, CEO of Uniguest of Tennessee Inc., which provides security software and call center support to the hotel industry said he has seen more businesses asking him for discounts, leading him to readjust his prices in some cases. For example, one of Uniguest's larger customers was given a 10 percent discount in exchange for a two-year contract, Thomas said.

"We have not made an across-the-board reduction in fees," Thomas said, "however, we are working with our customers on a case-by-case basis to review their contracts and see what types of discounts we can provide."

Meanwhile, other businesses are trying to trim costs on phone plans as much as possible.

The Hilton Nashville Downtown recently pushed its 10 employees with company cell phones to sign up for what's similar to a family plan that allows no unused minutes to be wasted.

"We looked at every area of the hotel that won't impact our guests," said Ray Waters, regional director for hospitality for Turnberry Associates. The move saved the hotel $250 a month when it made the switch last year to a family plan versus individual plans.

Nashville-based Bridgestone Americas also made a cell phone plan switch for its employees, and the company is looking at ways to "maximize the equipment" such as reselling or trading in cell phones once they are no longer in use, spokesman Dan MacDonald said.

Not all companies are cutting back. Some say prices have dropped, and it may make sense to buy.

Tom Turner, president of Document Solutions Inc., said his business was able to save 20 percent to 25 percent on a network storage system. "We're not going away from the technology," Turner said. "The economy has created some opportunities in purchasing."

AmMed Direct, a Nashville company that provides supplies and support for diabetics, said it spent $400,000 to $500,000 on a medical equipment operating system that would simplify the claims processing by letting employees access all of the information they need in a single place.

The equipment could increase productivity by 10 percent and is estimated to bring $750,000 to $1 million in annual savings, said CEO Tom Milam. "It's cost-justified by the fact that we can provide a better level of service and do it more efficiently," Milam said.

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