God Bless The VAR That Builds His Own

By Robert Faletra, CRN
April 14, 2008 12:00 AM ET

It never ceases to amaze me how the system builder market just keeps chugging along despite predictions of its demise all over the world.

	ROBERT FALETRA
Can be reached via e-mail at rfaletra@everythingchannel.com.

Fact is AMD, Fujitsu, Hitachi, Intel, Microsoft and a host of others continue to offer products and programs designed to keep system builders driving market share, especially in some critical niche areas. The market is in varying degrees of maturity and evolution based on geography and focus. Last week, we here at Everything Channel (formerly CMP Channel) held our Channel IT Channel Vision event in Rome with 300 independent VARs, many of whom are still doing a tremendous business in the system building space. I heard the same issues from this audience as I have in many sessions over the years in North America. But the European system builders have more options in that there are many different markets available to them. Western European system builders are finding the developed markets they traditionally operate in are becoming more difficult. But Eastern Europe has many markets that have not built out the infrastructure to the same degree and offer an easier path to growth.

Margins are not an issue in the rapidly growing emerging markets for system builders who still maintain growth by building nonspecialized white boxes. That's a volume game, however, and big numbers every month on less-tricked-out boxes mean lower price points. Nick Boardman, CEO of Rock Group Plc, a large system builder in Great Britain, is strong in the PC gaming white-box market in Western Europe selling high-end machines. His business is going so well he recently entered the North America market. PCs are still the preferred platform for many of the most serious gamers, and they are buying elite PCs with very high average selling prices that can climb higher than $3,000. But while many of these European system builders are still healthy and vibrant, many are also expanding beyond the white-box arena and looking to grow into non-hardware-dependent services. Sound familiar?

In the end, the system builder market is made up of some of the scrappiest and most innovative entrepreneurs in the business, and the ones like Boardman that build pan-European or multicontinent businesses are to be congratulated.

Are you a thriving system builder business? Make something happen. E-mail Everything Channel CEO Robert Faletra at rfaletra@everythingchannel.com.

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