What Warranty?

The end users are so fed up with Dell Computer and Gateway that it's creating a services boom for white-box builders, said attendees at a D&H Distributing conference here last week.

Dell and Gateway, who have repeatedly touted their services capabilties, did not return calls by press time.

But white-box builders say the direct PC manufacturers do not have the scope to handle every warranty claim on-site. All the roundtable participants said their percentage of services has increased significantly in the past year. The average revenue of D&H solution providers is about $1 million each, according to the distributor.

The CPU Guys, a systems builder in Hanson, Mass., said its services work on Dell and Gateway boxes is up 30 percent from last year, and about 50 percent of the Dell and Gateway systems that CPU Guys service are under warranty.

Tom Derosier, co-owner of CPU Guys, whose sales are up 15 percent this year, said Dell and Gateway are not servicing their own systems. "If [end users go direct, that's good for us," he said. "Manufacturers crank out computers so quickly [that they can't support them, and [the machines end up in our shops."

For example, a customer brought a new Dell Inspiron to CPU Guys two weeks ago looking to get the notebook integrated with her cell phone. The machine was still in the box, but it had a faulty motherboard, he said.

"She called Dell,she purchased on-site service,and they said, 'Ship it to us or it could take two weeks [to get a technician on-site,' " Derosier said.

The customer returned the Dell machine for a refund and bought one of CPU Guys' custom-built laptops instead.

"That kind of thing happens so often," Derosier said. "We tell our customers when they have a problem, 'You didn't get a system, you got the Dell Solution.' "

Jeff Salmeri, president of Computer Escape, a solution provider in Randolph, said he has replaced hundreds of Dell hard drives that were under a Dell warranty because customers would rather "suck up the $150 to $200" it costs to replace them rather than "wait on hold."

Dell contracts with third-party companies to provide much of its service, but those companies cannot match the support of a local solution provider, said Mike Healey, president of TENCorp, a Needham, Mass.-based solution provider.

"We lay out the design of their network [and do the implementation. Unless [the direct vendors are there, they can't do that," he said.

Maximum Micro, a South Yarmouth, Mass.-based solution provider, recently got a call to service a Dell machine in Martha's Vineyard, Mass. Dell's service provider offered Maximum Micro $55, but that was not enough for president Larry Souza to send a technician for a half-day trip that included a ferry ride. The solution provider negotiated a $160 fee plus expenses.

"They couldn't find anybody on Martha's Vineyard to do it," Souza said.

In such cases, solution providers often find customers are ready to shed the direct vendor in favor of a better-supported white box.

"More often than not, the [serviced PC is an old system, so we talk about upgrading. We get the services revenue, and within a week, they're asking for a new machine. Our services drives our systems builder business," Souza said.

Maximum Micro's services revenue rose to 90 percent of the total this year from 50 percent of the total because it picks up the scraps that direct PC vendors such as Dell don't want, Souza said.

One of Souza's customers bought a system from a Gateway Country store, but couldn't get a technician to service the system.

"She paid for my service because she couldn't get the service from Gateway," he said.