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Programmers
Paradises focus on gaining trust and respect from customers as well as software
publishers separates them from the competition
Services
Computers Wholesale
(PROG-NASDAQ)
Programmers Paradise, Inc.
1157 Shrewsbury Avenue
Shrewsbury. NJ 07702
Phone: 732-389-8950
Simon F. Nynens
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
April 6, 2006
BIO:
The Company announced on January 9, 2006, that Mr. Nynens has been named President and
Chief Executive Officer. The Company also announced that Mr. Nynens was elected
unanimously to the Board, effective January 9, 2006, at a meeting of the Board held on
January 6, 2006. Mr. Nynens, 34, has served as Executive Vice President and Chief
Financial Officer of the Company since June 2004. Prior to that, he has served as
Vice-President and Chief Financial Officer of the Company from January 2002 through June
2004. Between February 2001 and January 2002, he served as Vice President of the Company.
Prior to that, Mr. Nynens served as the Vice-President and Chief Operating Officer of the
Company's European operations from November 2000 through January 2001, and prior to that,
he was European Controller and Corporate Controller of the Company
Company Profile:
Programmer's Paradise, Inc. (NASDAQ: PROG) was founded in 1982 and is an award-winning
marketer of technical software and hardware. When it comes to software, Programmer's Paradise
has it all.
Programmer's Paradise is one
of the most recognizable and memorable brands in developer marketing. Our experienced
account executives are key in our strategy. We offer our customers customized extranets,
consultancy services, and flexible financing, as well as same day shipping.
CEOCFO: Mr. Nynens, you have recently moved from CFO to CEO;
why the change in management now?
Mr. Nynens: The change was chosen by the board to
reflect a full year of responsibility for myself. Instead of waiting, this was a planed
change. We worked on this for the last couple of years and we decided to make me
responsible for a full year instead of six or nine months.
CEOCFO: What is
happening at Programmers Paradise now?
Mr. Nynens: We moved our business in terms of
restructuring, which started three years ago. Our vision then was to become the most
trusted and respected IP provider in the industry, however that does not mean the largest
or the cheapest, but trusted and respected IT provider. What that means is we focus on
what our customers want and what our software publishers and vendors want. We are very
vendor-centric. We go back to the publisher and try to figure out what they want from us.
CEOCFO: What do the
software publishers want?
Mr. Nynens: For instance, there are surfer leads on their
website and they do not have enough staff to call back on those. What they typically do is
send out a reminder email. We however can take those leads, call those customers back, and
give them a special offer. If they do not buy that particular product, the lead is good
for us because they may also be in the market for other software. Therefore, it makes
sense for us to call somebody after a 30-day trial period and see if they are willing to
buy that product or if there is any other software that we can sell them.
CEOCFO: Will you give us
an overview on the industry in general?
Mr. Nynens: In general, it is a very price competitive
industry. The dilemma in our industry is like a card I saw in a printing store that said,
We deliver your order; cheap, accurate, and fast. pick any two. So, it can be
cheap and accurate but not very fast or it can be fast and cheap but not accurate. If you
do not make a choice, and you want to become all three, that is where most companies run
into trouble; they want to be cheap, accurate and fast. Instead of becoming the cheapest,
we think we can be fast and accurate, not losing sight of that we have to be price
competitive, but we really want to move toward doing what the customer wants. That means
making sure that the order gets there when the customer wants it. In our industry, it is
very often achieved. There are resellers out there; however, they cannot get the product
there on time. Meanwhile, you have very expensive software developers waiting for that
software doing nothing, and charging you by the hour. A complete shipment of hardware
could be waiting for the extra software to be installed on these servers or computers. If
that software does not get there in time, the resulting damage could be very expensive.
CEOCFO: Who is your
typical customer and how do you get more of them?
Mr. Nynens: Our typical customer is a medium-sized
business that is IT focused. The typical suspect is in the financial industry, graphic
industry. It is a variety.
CEOCFO: How do you grow
your business?
Mr. Nynens: The way to increase our business is to do
what our customers want, so our focus is on responsive marketing. We have been named
number-one by Evans Data Research for the last six years in terms of most valuable
component and tools reseller in the United States. If they ask unaided what is the
favorite development tool reseller, most developers will say Programmers Paradise. We have
been around for 22 years and we publish more catalogs than any of our competitors. We are
the only one that stayed in our niche in terms of software; the majority of the resellers
have also gone into hardware. We sell hardware but only as an add-on service to our
customers. We focus on our product line and the way to grow that is by having a focus on
what you should do and what you should not do. Many people will gladly tell you what they
do, but they have a problem telling you what they do not do.
CEOCFO: Do you have much
repeat business?
Mr. Nynens: We do have repeat customers, but there are
also a lot special needs. For instance, we have the fortune 1000 companies as customers;
they might come to us as a secondary vendor with specialties offer. There is that special
software that you need from the European software publisher or South American software
publisher. People know that we carry various software lines and have the broadest product
offering.
CEOCFO: Are your
customers primarily in the US?
Mr. Nynens: Currently it is primarily US but we do have
a Canadian office.
CEOCFO: Will you tell us
about the financial picture of the company?
Mr. Nynens: We have a stable company, no debt and our
equity is $17 million. Over the last three years, we have had a huge increase in the
revenues.
CEOCFO: What do you see
ahead for the next two or three years?
Mr. Nynens: There is going to be continued pricing
pressure in our industry and we believe we can counter that by making sure we stay within
our niche, and do not get distracted by new or possible opportunities. We have to do what
we do best.
CEOCFO: Why should
potential investors be interested and what should is often overlooked about the company?
Mr. Nynens: If you look at McDonalds vs. Burger King,
there are many large corporate resellers that are now fighting a huge price war because
they only look at each other as competitors. McDonalds only looked at Burger King
and Wendys as a competitor, and they never saw the organic food deli as a
competitor. That is where the margin is in that industry. If you look in our industry,
there are large corporate resellers that are fighting with each other and meanwhile, the
profit margin is in terms of specialty products.
CEOCFO: In closing, what
would you like readers to remember?
Mr. Nynens: I think that many companies try to change
just for change sake. I think we all have to make sure that change is seen as improvement,
and you do that by always taking into account your vision. Many people say I will become
the best or number one, but what does that mean? We say you have to live your vision. I
tell people here that we will become the most trusted and respected IT provider in our
industry, that means that we should maybe not call our customers thirty times a day and
ask them for the purchase order. Maybe that means that some customers do not like to be
contacted via the phone but like to be contacted only via email. Maybe some customers like
to order only via website, so you have to know what your customers see as the meaning of
trusted and respected. I try to live that day-in-day-out. Will we be seen more trusted and
respected, for instance, if we let deals go because they will not help in terms of our
vision. Many resellers out there sell large volume contracts, but they sell at very low
margins and that is something that we do not do. If customers ask us why, we give them the
reason that we do not see that we can add value in that channel. I believe to state
clearly what you do and what you do not do is important in any industry.
disclaimers
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