Outlook For 2002 Server Sales Brighten

Worldwide server sales fell by 26 percent in terms of revenue and about 7 percent in terms of shipments in the fourth quarter of 2001, compared with the same period in 2000.

Solution providers said white-box server sales fell in step with business overall in 2001, but inquiries are up this year.

"Business is slowly picking up," said Jules Michel, account manager at Precision Computers, a Portland, Ore., solution provider. "We've been in the black hole, but we're seeing the light."

The market is in the upward part of the business cycle, said Rick Stace, president of Paradise Technology, a systems builder in Redondo Beach, Calif.

"For 2002, we think the market will go up," Stace said. "We'll watch the market month to month, especially for news from the CIOs. If Wall Street says it's picking up, sales will go up. The quicker the good news, the better."

Sales cycles for white-box servers have grown longer as clients' purchasing decisions increasingly move from IT departments to CEOs, Stace said. "Everybody is watching their spending," he said. "There are more [corporate layers to deal with."

Stace said Paradise has adjusted to the new market by eliminating full-time staff and contracting the business to high-quality talent now available.

"I can call someone up, ask them if they are available tomorrow," he said. "With things the way they are, it doesn't make financial sense to keep a permanent staff."

Steven Manteros, general manager at GST/Micro City, a Cerritos, Calif., solution provider that offers Hewlett-Packard, Compaq and white-box servers to clients, said rack-mount white-box server sales should remain fairly steady in 2002, while sales of pedestal servers are expected to drop slightly.