Managers fear parallel imports will drive up support cost

Software and hardware are expected to get cheaper in the long run but costs associated with support will rise, according to Computerworld 1000 Survey respondents. We asked 30 of the nation's top IT managers what they thought about legalised parallel importing and what it means for New Zealand's IT industry. Twenty-six respondents expect the cost of support to increase, although 19 respondents feel the cost of software and hardware alone will decrease.

Software and hardware are expected to get cheaper in the long run but costs associated with support will rise, according to Computerworld 1000 Survey respondents.

We asked 30 of the nation's top IT managers what they thought about legalised parallel importing and what it means for New Zealand's IT industry. Twenty-six respondents expect the cost of support to increase, although 19 respondents feel the cost of software and hardware alone will decrease.

Nearly all the respondents, 25 out of 30, believe the government should have initiated a review of the parallel importing legislation before it was announced to ensure all parties were able to give their opinions.

For Bruce Ladbrook, IT manager for National Insurance, the major issue with parallel importing is one of globalisation. "If the software developers are working in a truly global marketplace, then it shouldn't be an issue for them at all."

Ladbrook agrees that the new legislation could mean an increase in the cost if local distributors are forced to support product brought in by another company. If that happens he would rather buy support services separately from the product itself, possibly through a third party. "If a company is genuinely adding value to the product then people will still buy from it. If they're not, then people will go elsewhere."

We also asked whether local distributors should support products imported and sold by other importers. Seven say they should but 19 say they should not. Most of the major vendors have global agreements that allow for product support on a worldwide basis.

Hewlett-Packard's peripheral products manager, Justin Tye, says HP will continue to support products from overseas that are under warranty, despite the extra cost to HP New Zealand. "Our pricing structure is based on the number of sales we make in New Zealand, so any imported products represent an additional cost to us."

Tye points out that it would be difficult for an overseas supplier to provide an HP product at less cost than product sourced from HP New Zealand as margins in the IT industry are very tight.

We asked respondents whether pirated software would increase as a result of the legislation. Opinion was almost evenly divided between the two sides. Fourteen respondents said the legislation would increase piracy, 13 believed it would not. Many respondents believed it would be easier to import illegal software but more difficult to find it once it was in New Zealand.

Ladbrook believes Customs will need a boost in funding to compensate for this increase.

"It stands to reason — if we can't catch them so easily once the software's here, we must stop them at the border."

Join the newsletter!

Error: Please check your email address.
Show Comments
[]