Alternatives: Systems/Servers

VARs don't have far to look for Intel-based systems and servers whose technology, profit margins and support rival those of market leader Hewlett-Packard. Think Armonk, N.Y.--IBM Country--and Round Rock, Texas, home to the company that put "dude" in the PC-purchasing vernacular--namely, Dell.

Dan Love, vice president of business development at Siwel Consulting, New York, says IBM has done a good job of delivering reliable servers with profit-margin potential.

"We see IBM as a leader in technology with a good support structure for VARs," Love says. "IBM appreciates what we do for them and has supported us when things get dicey."

Adds Kent Lowe, business manager at Lake Technologies, Orlando, Fla.: "I've sold Compaq and HP servers, but IBM's incentives definitely give me better margins. And the products are top-notch."

IBM executives say the vendor's strength in this space lies in solid technology.

"VARs are showing confidence in us to deliver high-availability features and remote-management software available before only on higher-end systems," says Stuart McRae, worldwide marketing manager for IBM's xSeries servers.

As for Dell, VARs serving mostly SMBs that need lower-price single- or dual-CPU servers say its systems present an attractive option to HP's. Despite Dell's bargain-basement pricing, some VARs are satisfied with margins on its higher-end servers and the potential sales volume of lower-end systems.

"I quoted a customer on a [fully loaded] HP server for $19,000," says Sean Brown, CEO of U.S. Network Management, a systems builder in West Palm Beach, Fla. "The same configuration from Dell was $6,500. On servers priced at $6,000, I can make $1,500. That's not bad."