White Box PC

If you go the white box PC route, apply the same support cost-reduction scrutiny.

Although this chapter has referred extensively to computer support issues to consider when buying desktop PCs and notebooks from the giant PC vendors, many small businesses purchase White box or “clone” PC products.

White Box PC Market

White box PCs, and servers to a lesser extent, are assembled by local value added resellers (VARs), or network integrators, as opposed to being manufactured in large volumes by global PC giants such as Compaq, Dell and Gateway.

Throughout 1998 and 1999, many industry forecasters, myself included, were predicting the end of the clone PC. After all, between plummeting prices on brand-name PCs and the uncertainty about Year 2000 compliance, the future of unbranded PCs looked murky at best. And hard data bore out this trend.

CRN (www.crn.com, formerly Computer Reseller News) has been tracking the White box affinity of computer resellers for several years. Although CRN saw a decline in the White box market throughout most of 1999 and into early 2000, there’s been a rebound ever since. The market for “cloned” desktop PCs and servers remains remarkably healthy.

Why Resellers Love Selling the White Box

Call them what you will: solution providers, value added resellers, systems or network integrators or technology providers, but many prefer to sell White box PC hardware, as opposed to brand-name PC hardware, for three basic reasons.

First, the solution provider has complete control over every hardware component that goes into the system. This not only allows the solution provider to satisfy virtually any small business client whim, but the solution provider can position its custom PC assembly as a master craft, as opposed to a commodity that’s manufactured in a factory.

Second, solution providers cite how they are able to respond immediately to warranty service needs, as they already have replacement parts in stock.

Finally, solution providers still routinely see 20 to 25 percent net profit margins on White box desktop PCs and servers. Selling comparable brand-name products likely would net low single-digit profit margins, if the solution provider breaks even at all.

The third reason obviously helps to ensure the financial survival of solution providers, but small businesses evaluating the pros and cons of brand-name PCs, as opposed to White box PCs, need to evaluate several other factors.

Ask for the Same Deal

Most important, don’t let your local White box-selling technology provider off the hook too easily.

White Box PC Action Items

Does your company primarily purchase brand-name PCs from major PC vendors, "white-box" PCs (clone PCs) from local resellers or a combination of the two?

Are you paying for consulting services that would be free with the purchase of a brand-name PC?

Are you getting substantially faster warranty service and technical support from a local "white-box" selling solution provider than you would from a top-tier PC vendor?

Is your local solution provider financially strong enough to survive in the future, as well as long enough to fulfill a product warranty -- and preferably beyond?

Is your product warranty for "white-box" PC products basically worthless if you decide to switch technology providers or computer consultants?

 

 

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