Turbulent Times - Opportunity Knocks

Message From Evron's President

Feature: Can Virtualization Work For You?

A Forward-Thinking Approach to Protecting Your Data

Accountant's Corner - Financing Options

How Lease Financing Can Work For You

Your Afternoon Smile

"They've finally come up with the perfect office computer. If it makes a mistake, it blames another computer."

-- Milton Berle

Turbulent Times - Opportunity Knocks

Message From Evron's President

You know that we are in the midst of turbulent times. The stock market is swinging wildly and probably most readers of this article have seen their stock and RSP portfolio drop about 40%. Banks in the US are failing and house values are in decline. There is great fear of economic down turn. Although Canada's situation is different, we are inevitably affected when our biggest trading partner reduces economic activity.

Also, the excess speculative behaviour of banks and brokerage houses will have the predictable result: the perpetrators will walk away extremely rich and the innocent will be punished.

Who are the innocent? They will include all those businesses that now find that their banker is tougher and tighter with credit. They also include organizations finding collections more difficult, suppliers with tougher terms, customers and prospects slower to buy.

This is exactly the opportunity for the smart and strong to grow.

If this is you, then like us, you are seeing competitors who had been hanging on by their fingernails, falling under the additional load.

Evron has been investing heavily the past few years in people, infrastructure and process. We are being rewarded with growth in revenue and profits. We are finding new clients orphaned from previous suppliers who have ceased to exist or downsized into dramatically diminished capability. Our plan is to increase our investment to seize the opportunity.

We can help you do the same. We have secured lease-financing capacity for our clients to cover hardware, software, programming and services. This will allow you to invest in growth and profit capacity with new and additional fixed long term credit sources. Irwin Pinsky, in his article below, discusses this area further.

Some have found that by focusing on their core competencies, they have been able to better deploy scarce resources for growth and profit.

How do your revenues and profits per person compare to your competitors? For those who feel that information technology (IT) is not a core competency, we have expanded our managed services and disaster recovery services. This allows those clients who attach great value to their staff time and computer network to partially or wholly outsource their IT to us. This has included accounting firms, law firms, services organizations, manufacturers and distributors.

We have clients are various stages of their development. We see many prospects that essentially still run their businesses in Excel. I think that they will be greatly challenged trying to compete with some of our clients who have fully automated supply chains that electronically link vendors, customers and staff. Clients who use software that gives precise revenue, cost, profit and utilization information and reduces their transaction costs will have decided advantages over their competitors. If investing a dollar makes you two, why would you not do so? This is especially true if you can put the investment on a monthly lease.

However, we know that most organizations that intend to act, in fact won't. That is why those who seize the opportunity will be a lot larger and profitable three years from now. They will end up employing many of the staff and servicing the clients of those who froze.

- Larry Noble, P.Eng, MBA
- President, Evron Computer Systems Corp.

Feature: Can Virtualization Work For You?

A Forward-Thinking Approach to Protecting Your Data

Given how much the pace of business has changed, businesses are under increased pressure to stay efficient, agile and keep their competitive edge. Business leaders must continually invest in their IT systems to keep up with the business requirements.

To that end, it's important to have dependable IT infrastructure that works and keeps a business running. As a business owner, you're also looking for peace of mind in the event a disaster happens.

Naturally, all of these concerns come with a price tag attached. Managing server sprawl and disaster recovery can be expensive and time-consuming. There must be a better, cheaper solution out there, right?

Enter the server solution known as virtualization - a server technology that has already made a big impact on large, Fortune 500-style companies. Now the SMB market can take full advantage of virtualization too.

The Cost Benefit

So what is virtualization and how can it help you and your business?

As anyone running a business with IT infrastructure knows, there are two big problems any growing business must face - increasing network complexity and server sprawl.

As more and more applications go onto networked machines, the demands placed on servers are growing like never before. In the pre VM-ware era, independent servers were required for different applications. For example, an email server must be independent of a web-hosting server to avoid problems down the road with conflicting applications.

Virtualization solves this problem. Instead of using multiple pieces of hardware as servers, virtualization allows for a single server that houses a variety of applications in it.

Unlike traditional approaches, virtual machines simulate hardware instead of using real hardware. This means, in layman's terms, end users of applications - in this case, your workers - can use workstations and terminals connected to a single virtualized machine instead of running off multiple ones locally. Costs are reduced through energy savings, less investment in new servers and you're even being environmentally friendly.

When Disaster Happens

From a cost benefit perspective, virtualization is a strong investment. But what about peace of mind and security?
The old ways of duplication and back-ups through multiple servers is not only costly, but an inefficient use of resources. For example, take email. Many companies use a back-up server to protect company email in the event of a disaster. In the old days, a disaster recovery plan could take several days to implement as virtually all hardware had to be duplicated and the server solutions required significant maintenance overhead to ensure information is accessible or readable afterwards.

How bad is it when your data center goes down? Industry research group Gartner Inc. has determined that two out of every five enterprises that experience a disaster go out of business within five years.

For companies slowed down for days or weeks by a disaster, the numbers are even more ominous: a stunning 93% of companies that lost their data center for 10 days or more filed for bankruptcy within one year of the disaster.

Virtual machines create a safety net for your business. Through continuous data protection, vital network data is sent to a virtualized, off-site server via the Web and over a secure Virtual Private Network constantly. The result? Quick and easy access to your data in the event of a disaster - a digital back-up that offers peace of mind.
Further, with the addition of thin client computing like Citrix or Microsoft Terminal Server, it's possible for workers to access company data even from their own homes.

The proof that virtualized machines are a step forward for SMB in disaster recovery is clear. If a disaster occurs, company data is easily accessible and not at the mercy of days of downtime. It's a solution that could work for you - call us and find out more.

- Amit (Sunny) Sahni, CCNA, CCEA, MCSE, VSP.
- Vice-President of Technical Services at Evron Computer Systems Corp.


Sources: Gartner Inc., Disaster Recovery Plans and Systems are Essential, Roberta Witty and Donna Scott; the American National Archives and Records Administration Research.

How Lease Financing Can Work For You

The future has always been a place full of uncertainties. One absolute, is that in uncertain times cash, and more importantly, cash flow is king. Once the decision to go ahead is made, you may be facing the big question:

Where do I get the cash to finance the deal?

Lease financing may be an option worth considering for many reasons.

Cash Flow. It is a monthly payment that can be scheduled. It is a constant non-fluctuating disbursement with a fixed interest rate.

Conservation of your accessibility to funds. Unlike a one time payment in full, a lease requires only first and last payment, thus conserving your access to your line of credit for other projects or for daily financing of an expanding operation. Thus without going back to your bank for an increase in your line of credit (and all the accounting fees, as well as your time related to such an undertaking), you will be able to acquire addition financing.

Balance Sheet presentation. Unlike "Bank Loan Payable" which is listed as a current liability, only the current (upcoming twelve month period) capital repayment portion of a lease is disclosed on your Balance Sheet as a current liability. The remainder is classified as Long Term Liabilities.
This classification conformity will favorably enhance your "quick ratio", as well as many other measuring barometers that lending institutions use to judge your companies financial position, as well as your credit worthiness.

Tax Shield. If your lease meets the requirements to qualify as an operating lease, then payments can be treated as a current expense written off during the current year. No need to capitalize the asset and take Capital Cost Allowance as per Canada Revenue estimates of an asset's useful life. You will therefore be matching your actual expense within the actual time in which you are disbursing the funds.

Balance Sheet enhancement. If you are in an industry where prospects (be they customers, lending institutions, or suppliers), will look unfavorably at a "Lite" Balance Sheet (one that does not show long term capital assets), then obtain a lease that qualifies as a capital lease. You get the same benefits as in point three, but now the asset is shown on you Balance Sheet. You assume all the rights as an asset owner, including reporting to your prospects that your Balance Sheet as well as your company, fit their criteria as an organization that should be taken seriously.

- Irwin Pinsky, B.Comm., CGA

Irwin Pinsky is the manager of our small business division and our BusinessVision platform. His experience includes that of a public practitioner focused on emerging companies, as well as financial controllership.

About EVRON: EVRON is a leading provider of financial systems and network infrastructure solutions for small to mid-sized businesses. We have a history of success with thousands of implementations since 1983

T: 905-477-0444 | E: info@evron.com | W: http://www.evron.com.

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