Santa Rosa computer hardware company finds niche courting small businesses

The frustration of a customer on the phone with a Big Tech company, then placed on a long hold, is universal.

One Sonoma County man turned that exasperation into a lucrative business venture and now is serving an unmet need among information technology providers across the country.

For David Cook, the frustration came in a 2016 call with Dell, trying to complete a computer order while working for TeamLogic IT, a Santa Rosa computer support and information technology services company for small businesses.

“Halfway through the call I was like, ‘This is crazy. There's got to be a better way to do this.’ I remember distinctly in my mind saying to myself like this is the craziest,” Cook said. “… I'm just trying to order a computer. And it's like I was trying to land a ship on the moon.”

The laborious call cemented in Cook’s mind that the large computer hardware providers like Dell, Hewlett-Packard and Lenovo don’t cater to the needs of mid-size and small companies, creating headaches and wasted hours on the phone for orders or repairs.

Cook later left TeamLogic and took a year off, but the idea of building a better technology mousetrap remained on his mind. So in 2017 he started his own company called Carbon Systems, which sells computers to information technology support firms that serve small businesses.

In three years, Carbon Systems has grown to generate almost $3 million in revenue with six employees. With demand increasing for his services across the border, the Santa Rosa company plans to open in Canada to provide products to clients there.

“The big guys, they want to work with enterprise. They want a $100,000 deal. They don’t want the $50,000 or $10,000 order. They want the big stuff,” Cook said.

Steve Hinch, a local technology industry veteran who owned the TeamLogic business when Cook worked there, said he’s been impressed with how his former colleague has stayed focused on his original business plan while driving growth.

“I think he’s got an opportunity to grow the business quite substantially. He’s really only touched the perimeters of the potential market opportunity,” Hinch said, noting he sees Carbon Systems eventually entering Europe, too.

Carbon Systems does not make the computers it sells, rather has them made by suppliers. That path was easier than trying to buy in bulk from Dell or HP, then resell their hardware, Cook said. If he did that, he’d run into the same obstacles that he encountered while at TeamLogic.

For Cook, starting his business wasn’t easy. He was on a constant hunt for hardware suppliers. A native of upstate New York, he used his own money for the venture and didn’t have to take on any investors or a bank loan, so he wasn’t under immediate pressure to deliver results.

“I was on a shoestring. It was like hand-to-mouth. We would get an order for 10 computers and it would wipe me out of stock,” Cook said. “I've grown it from there.”

Carbon Systems eventually partnered with Intel to buy their desktop products in bulk and resell them. Carbon features a small bare-bones computer called the next unit of computing, known as NUC. The units are made in China and Cook’s company customizes the computer hardware with support software to sell to its clients. Carbon has a Santa Rosa warehouse where it can ship finished orders to its customers.

“I just make it super easy for them to get a computer, get it to their customers and if there is a problem, then where they can get it replaced,” Cook said.

That customer service has been the key to Cook’s success so far, according to his customers.

Carbon Systems carries a limited product line, which makes it easier to buy and repair items and simplifies the entire purchasing process, said Robert Praul, technology director at DivergeIT, a Los Angeles-area technology support firm that counts among its customers professional sports franchises.

The Santa Rosa hardware provider carries three desktop versions and two laptop models, Praul said. That narrow product menu makes it easier to place orders for Praul’s clients, saving at least 1,000 hours of worker time a year for his firm. He compared the simplicity of ordering from Carbon Systems to that of the limited menu of In-N-Out Burger.

“Let’s say I’m selling an HP desktop and a week later they may be out of that model,” Praul said. “I’ve got to go pick from a different model, so the next thing you know I got five different models of computers for a client, which is five times the amount of complexity as compared to having one.”

Now, Cook’s former employer also does business with him. Todd Tolly, who took over the TeamLogic location in Santa Rosa after Hinch sold the business, said he appreciates that Carbon Systems has a quick turnaround and a good warranty policy.

Some of TeamLogic’s employees actually can go over to pick up computers directly from Carbon System’s office for even faster service.

Cook’s business has operated somewhat under the radar, but he is now eager to see it grow as industry talk about his firm among information technology professionals has helped lead to the need for a new office in Canada before the end of the year.

“I was just putting people's names down ... this year and we probably have 60 to 70 IT providers in Canada that have said if you were up here we'd buy from you,” he said.

The coronavirus did throw Carbon Systems a curveball, and it experienced a dip in revenue last year. Cook did not have a laptop product at the onset of the pandemic last spring, as workers were forced to work remotely rather than at the office. He had been in negotiations with Intel at the time for such a laptop product.

Cook secured a laptop supply by last summer from another vendor and got that product to his clients. The laptops are different from desktops because they are more difficult to customize for customers and he has to buy them in larger quantities.

“You can’t just order a 100 laptops. You have to start with like 1,000,” he said.

Hinch said he is bullish on the future of Carbon Systems after doing consulting work with Cook. Hinch thought it was wise for Cook to last year hire a chief operating officer, John Rosebaugh, to add skills to Carbon Systems that Cook didn’t have.

“He’s very insightful in what it takes to run the business,” Hinch said of Cook.

After having previously worked for HP for 25 years, Hinch said his former employer would not take his calls when he ran TeamLogic. So he knows firsthand the frustration that still lingers for information technology professionals.

“If I am not buying $1 million a year from them, they don’t pay attention to you. That’s the niche that Dave’s going after,” he said. “There are plenty of potential clients out there that have always hated dealing with HP or Dell, but they didn’t have an alternative. Now they do.”

You can reach Staff Writer Bill Swindell at 707-521-5233 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.