Better performance with replacement motherboards is a hotspot in a cold market
Printer-friendly version Email this CRN article
A challenging market has led to delays in many top-to-bottom system upgrades, but technology solution providers can take solace in at least one thing: steady growth in the component arena.
Executives at distributor Tech Data, which created a business unit several years ago specifically for motherboards and other components, say motherboard sales have continued to rise, even through a downturn that's left many other aspects of the industry reeling over the past two years.
"Because we've created this specialized business unit for components, we're seeing growth month over month, quarter over quarter, pretty much within all of our motherboard product lines," said Richard Pereira, director of component product marketing for Tech Data, Clearwater, Fla.
>> Enhanced performance
>> Better integration
Tech Data's component business is counted as part of its peripherals sales, which account for about 42 percent of the company's revenue, according to its most recent financial report. While Tech Data's peripherals business as a whole showed a small decline from the previous year, the decline was smaller than that reported for the industry as a whole, Pereira said.
"Our business is somewhat outpacing the market," he said. While in many cases average selling prices are declining, unit volumes are up, he noted.
"The corporate [customers are not buying at the same level," Pereira said. "They are opting for upgrades as opposed to finished goods. The IT executives are not planning to see significant changes in their budgets. The good news is it's not going down as much."
Tech Data distributes motherboards for manufacturers such as ASUSTek Computer and Super Micro, among others. Pereira said those vendors have maintained a steady business.
Hand-in-hand with the decline in average selling prices is the increase in performance of new motherboards brought to market by Intel and other manufacturers, say Pereira and solution providers.
"You're definitely getting more bang for your buck [from motherboards," said Sean McClelland, CEO of 1HotWebserver.com, Tarzana, Calif., a maker of white-box systems.
Specifically, McClelland pointed to motherboards such as the Intel S845WD1-E, which comes with a 1u heat sink, 2 Gbytes of DDR memory and an Intel warranty. When Intel began shipping those motherboards, it billed them as providing better thermal protection for systems with a 1u form factor,systems in which 1HotWebserver.com specializes.
McClelland said motherboards with that performance and price allow him to design, build and install systems for about $3,000 that just over a year ago would have run about $6,000.
"I think Intel is driving the business from a technical standpoint pretty well. They seem to be providing the right resources and technical expertise," said Tech Data's Pereira.
Other manufacturers, including ASUSTek, are touting a new focus on integrating more features,including better audio and graphics capabilities and Serial ATA capability,and eliminating the need for add-on cards.
The pricing declines and enhanced systems performance in the motherboard market have prompted many clients to request installation of specialized network components such as servers dedicated to firewall solutions, Pereira said. This is one segment that presents opportunity to enterprising solution providers, he added.
"You've got to find the pockets of growth, where there's an opportunity, where people need a solution," Pereira said. "Focus on your core competencies. The guys that are going to survive and win [will grow in this [difficult environment."