Adaptation: Westlake Village firm rides wave of volatile industry by gaining big partners while refocusing from hardware firm to information technology and network company.

When Arnie and Sherri Friedman took over CPI, a personal computer retailer in Westlake Village, they realized the business would soon be changing for the better.

"My vision was to build the company into a network integration company instead of just a seller of PCs," said Arnie Friedman, himself a veteran executive with computer networking companies.

It was 1990 when the Friedmans acquired CPI, or Computer Products Inc., just as the computer and technology boom was slowly taking shape. But as Arnie Friedman began outlining his plans to develop a networking and information technology company, the market was dictating something else.

The hardware market was taking off just as the Friedmans we're looking to exit the market in favor of a high-end service oriented IT operation.

"We saw this big demand for hardware and so we decided to postpone our plans," Arnie said.

The company went on to build PCs for scores of businesses in the Valley and nearby Ventura County. It was custom work, but with a growing staff, the company was soon building hundreds of PCs for local companies, while also handling Web site design and maintenance.

Biotech giant Amgen alone ordered about 1,000 PCs over six years before signing a deal with Compaq which now provides all of its PCs.

Soon CPI went from $400,000 in sales in 1990 to $2.5 million in 1996 before the hardware market began to drop as many of its top clients, like Amgen and others found other equipment vendors. By 1998, sales had dropped to $1 million and continuing to head south.

"We lost our three biggest hardware customers in one year so I sat down with my key people and said 'let's figure this out' and we realized we had to refocus ourselves," he said.

For Sherri Friedman, Arnie's wife, working as the company's administrator and paperwork specialist, she's no longer surprised by the sometimes volatile tech industry.

"I used to have my own muffin shop in the Valley, but it's nothing like what we've had to face here," she said.

Refocusing firm

Arnie Friedman refocused the company on IT consulting, network integration and IT services. He went on to seek partnerships with Cisco, for its voice over Internet technology, with Microsoft, for its network infrastructure, and with Citrix for its remote access technology.

"I knew Cisco was getting into the voice over Internet technology and I thought that had great potential," Arnie Friedman said.

"So I took a chance and sent in our team to get certified and that's no small feat."

After weeks of training, most of CPI's technical staff was certified and well versed in the new Cisco technology. The company was now the only fully certified company that could sell Cisco's high-end Voice Over Internet Protocol system in the West Valley and Ventura County area.

That would prove pivotal as the segment has exploded for the company, making up about a third of the company's $5 million in revenue last year. For this year, Arnie Friedman predicts it will make up about half of all revenue.

"This year we expect about $10 million in total revenue with about $5 million coming from voice over Internet," he said.

The company's efforts with Microsoft and Citrix have also paid off as it continues to garner a big chunk of the Microsoft-driven IT and remote access market.

Sticking to strategy

Mike Conlon, a systems manager for Cisco, said CPI's success is due to its ability to stick to its growth strategy.

"It's very difficult to become Cisco certified and a lot of companies don't make it, but they stuck to it because it was part of their strategy and they're able to take advantage of that since they're the only ones certified in the whole area," he said.

Having received its certification in 2001, CPI has managed to slowly expand even as its other IT competitors were impacted by a down economy and the result of the Sept. 11 terrorist attacks.

Going from $3 million in 2001 to $5 million in 2002, the company is continuing to grow, thanks largely to demand for Cisco's data and voice network solution.

In the meantime, the company has outgrown its original 400-square-foot office and eventually moved into its current 3,000-square-foot office. Later this year, the company plans to move into a 5,000-square-foot office building it acquired in Camarillo.

"I'm excited about our growth, but 1 don't ever take it for granted," Arnie Friedman said.

"I know too well how things can change in an instant."

Spotlight

Computer Products Inc.

Year founded: 1981

Employees in 1990: 1

Employees in 2003: 20

Revenue in 1990: $400,000

Revenue in 2003: $5 million

Goal: To provide cost-effective information technology equipment and services

Driving Force: Companies seeking a competitve edge with state-of-the-art networking and communication. equipment.