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Choosing a Build-to-Order or White Box Computer

Choosing a Build-to-Order or White Box Computer

What’s the Best ROI for Your Company?

BY TOM TSAO and STEVE NEWTON

Special to the Business Journal

The term “white box” is one of the latest buzzwords to be added to the computer industry’s repertoire of what’s hot.

While not the most technologically sophisticated term, the subject of the white box has recently gained quite a bit of attention due to the fact that the sales potential is estimated to be between 30-50 percent of the total computer market.

While the white box has actually been around for some time, this statistic has brought it to the forefront , Dell has even jumped into the market by offering a white box program to qualified resellers.

Ignoring the hype, what constitutes a white box? Basically, the white box is any “unbranded product.”

Traditionally, white box computer manufacturers have been small independent resellers , your local PC dealer or someone who deals almost exclusively with small businesses with fewer than 100 employees. Because these independent resellers are so localized to small businesses, they can give excellent support, including installation, networking, maintenance and quick response.

Pricing for a “white box” has also been an important benefit because they are often from $50 to $80 less than a build-to-order computer. The biggest draw for the white box is the very localized companies that develop personal and ongoing relationships with businesses over time have provided it. This support is extremely valuable to smaller businesses, as they may need more help in determining the best computer power/configuration and more ongoing support.

While pricing for a white box is generally viewed as lower, this can be somewhat of a fallacy as white boxes may not always have the latest components, and consequentially may have a shorter lifecycle than build-to-order branded computers. Because build-to-order manufacturers are larger and have strong ties with the major software and hardware players like Intel, AMD and Microsoft, they have a road map of the product’s lifecycle and pricing.

Additionally, the Intel, AMD and Microsoft giants also provide frequent training seminars for build-to-order manufacturers to keep their professionals up-to-date on the newest technologies. Through this relationship, the build-to-order manufacturers can better gauge pricing issues and plan for the new products to be introduced, thus ensuring that they use the latest components available.

For example, a branded computer being built today will contain an AGP video card, rather than its technology predecessor, the PCI card. The PCI card, which was originally priced at around $50, now sells for about $20. Since the independent white box manufacturer may not be aware of the technology change, they are more likely to utilize the PCI card, resulting in a lower system cost, but shortening the product lifecycle.

In most instances, purchasing through a branded build-to-order company assures the customer that he is getting exactly what he wants regarding major standard components within the system, without the need to worry about receiving discontinued or end-of-life components. Branded build-to-order companies also provide OEM versions of software (operating system and application packages that are free from piracy).

Most branded, build-to-order companies also have dedicated, trained sales engineers to help a prospective customer configure a system to their exact specifications based on usage.

Larger companies with more than 100 computers often have an in house IT person or department, and know exactly what they want in a new computer and how to support it. Consequently, these companies are more likely to turn to the build-to-order manufacturer. In addition, there is an emerging option to the build-to-order or white box dilemma.

Contract manufacturing has put a new twist on branded computers. For lack of a better term, perhaps we’ll call it the “branded white box.” This is a computer built by a major branded manufacturer under a private label for another company, resulting in a lesser-known name. In this case, the consumer benefits by getting the latest technological components available with a lower price.

– Computer Buying Tips

No one wants to purchase products that cannot be repaired or maintained by the original manufacturer, particularly within the warranty period. So it is essential that the buyer, whether buying a branded, white box or contract-manufactured product, at least has a comfort level with the company they are doing business with in terms of staying power.

If you are in the market for new computers, first ascertain your computer requirements. Will it be for administrative, R & D; or graphics use? If you are a larger business that depends on computer technology to really help your business, you will probably want the assurances of the latest technology.

Going with a build-to-order manufacturer, or at least a contract-manufactured product, would be your best bet. You most likely have an IT professional in house as well, so extraordinary support is not really needed. Call build-to-order professionals and ask for their recommendation for components used in the system.

If you are a smaller company that needs heavy local support and expertise with your computer maintenance, you may want to consider the white box from a local independent manufacturer, but also remember that you can request the build-to-order product from this channel as well.

To avoid getting a system with pirated operating or application software, make sure you get the software key, label and proof of purchase.

Because most systems ship with Microsoft XP, there is a minimum of concern regarding compatibility issues as well as network and ISP connectivity. If the small business purchasing the PCs does not have the experience to install and get running, most branded build-to-order companies either have in house installers or can provide third party services. White box providers almost always have staff to assist in the installation process for a fee.

Tsao is vice president and Newton is vice president of sales for Premio Computer, Inc.

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