CMS boasts of victory over broadline rivals

Wholesale Distributor claims single focus on storage is behind record year-end sales.

CMS Peripherals has hit out at its broadline rivals, claiming that because it focuses entirely on storage, it is able to achieve profitability.

The claim comes as the distributor revealed details of record revenue for its financial year ended 31 October of #63 million, up 37 per cent on #46 million a year before.

CMS is a privately-owned company and, therefore, does not have to reveal its profit figures.

Frank Salmon, managing director of CMS Peripherals, said: 'We've had a successful year primarily because we've focused on storage alone, while other distributors have widened their products, especially at the low-end. This has also been beneficial to us'.

He added the focus had enabled CMS to earn profit margins of about four per cent for the year and would result in an even more profitable year ahead as companies prepare for the year 2000.

'If we can't improve our position in 1999 then we never will. Next year will be very good for high-end storage, as everyone from SoHo to large corporate moves to back up all their data,' said Salmon.

He added that the company was working with vendors to overcome past marketing problems: 'It has been difficult for tape vendors to promote their products because what they are essentially offering is insurance and people have been neglecting to buy back-up.'

To address this, CMS will start a number of year 2000 awareness schemes in January. It will also increase its reseller base.

Bob Peyton, director of European storage research at IDC, predicted a recovery in the storage market in 1999.

'We have seen some terrible pricing from a profitability standpoint this year and the channel has been working hard at bringing inventory levels down.

'I expect prices to recover and unit growth rate to increase next year,' he added.