Synnex Cuts Ties To White-Box Group

The American Canadian System Builder Cooperative (ACSBC) had been counting on Synnex to build two Intel-based servers and three PCs with a common set of SKUs and brand for the government customers of its 80-plus members, said Bill Booth, president of the organization. However, a year of planning was tossed out with the unexpected notice from Synnex in mid-August that it would no longer work with the organization due to issues Booth said he thought had been hammered out.

The ACSBC was looking to offer a common series of PCs and servers to government customers.

"This came totally out of left field," he said. "We were working with them for a year to figure out liability issues, and the definition of contract manufacturer vs. OEM. This shocked everybody."

Executives at Synnex, Fremont, Calif., would not comment on its involvement with the ACSBC or its decision to withdraw.

The nonprofit ACSBC is aimed at helping smaller white-box solution providers compete against large vendors, notably Dell and Hewlett-Packard, for government contracts. Many of the member companies are minority, small or disadvantaged businesses.

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"For smaller system builders and companies like us, the government is not a market you can just jump into. It takes a lot of expertise," said Andy Kretzer, director of sales and marketing at Bold Data Technology, a Fremont white-box builder. Synnex's move is a huge setback, Kretzer said. "There were issues, but I thought we were working things out."

One of the main reasons the ACSBC had been working with Synnex is that it is the only distributor with its own GSA contract. By piggybacking on the contract, the ACSBC and its members would not have to invest the time nor invest the up to $75,000 needed to develop their own GSA contracts.

The ACSBC is working with a third-party company to bring in 400 government leads per day, as well as to provide a common warranty and service policy. All decisions are made by member committees, which are funded by vendors looking to support white-box builders and supply components.

Seagate, NEC/Mitsubishi, Logitech and several others have committed to funding the ACSBC through mid-2005, at which time a 1 percent royalty for all systems sold by members should be able to support the organization. Those plans are now in disarray, Booth said.