Your Business Magazine 2022 - 337

YOUR BUSINESS _ 2022
ust over 30 years ago two young entrepreneurs, just
starting their careers, uncovered an opportunity. Arnulf
Becker, managing director of Covenco SA based in
Chile, was looking for a European partner. Covenco
had corporate clients in Santiago and other major Chilean cities
who wanted to purchase used IBM computer hardware and it
needed a partner in Europe to help source the equipment.
Why Europe and not the USA, which on first inspection,
would have been a more obvious choice, being physically
closer and not suffering a five-hour time difference? Well, to
answer that question you have to go back to a time when the
electronics inside IT hardware were not cycle switchable.
J
" SINCE 1989, THERE HAVE
BEEN HUGE TECHNOLOGICAL
ADVANCES AND THE BIRTH
OF BOTH THE INTERNET AND
MOBILE COMMUNICATIONS.
BUT EVEN WITH ALL THESE
INNOVATIONS, THE RATIONAL
FOR CONSIDERING SECOND
USER IT HARDWARE IS STILL
THE SAME - BEST VALUE "
Chile, unlike most South America countries, runs on
50Hz power. Sourcing used IT from the US wasn't an option
because all hardware there is built to run on 110v, 60Hz
power, whereas Europe is 240v, 50Hz. As Arnulf speaks
both German and English in addition to his native Spanish,
he reached out to trade bodies and chambers of commerce
in the UK and Germany. It was through one of these that
the two young entrepreneurs made contact with him.
A new company is created
Having fostered the relationship with Covenco/Arnulf and
secured the first purchase order from a Chilean end user,
backed by a letter of credit, the two entrepreneurs took the
transaction to the board of the company they both worked
for at the time. They were expecting approval to purchase
the items required to fulfil the order and a pat on the back
for discovering a potential new revenue stream. In reality
what happened was that they were told the transaction
was far too risky and that they couldn't go ahead.
Deflated but not prepared to give up on what they believed
had the potential to be a business, the two decided to go it
alone and start their own company. It needed a name, and
after consultation with Covenco Chile it was decided to call
the new UK-based entity Covenco UK. It needed funding, so
each entrepreneur provided £10,000 and Barclays matched
this seed capital with a £20,000 overdraft facility.
The new company also needed an office, so a serviced
office in Mountbatten House, Windsor was leased. All
this was accomplished at breakneck speed; only a week
after taking the idea of selling used IT hardware in Chile
to their employer, the two resigned their jobs and on 13th
December 1989 Covenco UK Ltd started to trade.
Seeing the future
Not long after Covenco UK was established, almost all IT
hardware became cycle switchable and as a result the Chilean
market effectively closed to it. But seeing this coming, the
Covenco management diversified its customer base by building
an international brokerage department and recruiting an
end-user sales team to work with UK businesses. Over the
years, further expansion came with the opening of Danish
and Spanish sales offices, a warehouse in Colorado and, most
recently, the acquisition of a UK IT disaster recovery operation.
Today, the Covenco group comprises six companies
in four countries. Collectively, they turn over £20m and
employ 65 people. All sell and rent both new and used IBM,
HP, Dell, NetApp and Cisco hardware. Since 1989, there
have been huge technological advances and the birth of
both the internet and mobile communications. But even
with all these innovations, the rational for considering
second user IT hardware is still the same - best value.
To find out how you can stretch your company's IT
budget and do more with less, visit covenco.com or
email sales@covenco.com today
http://www.covenco.com
Your Business Magazine 2022

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