Dell Drops White Boxes

The Dell spokesperson said the decision to do away with the white-box program was made earlier this year in response to feedback from solution providers.

Dell said the elimination of the white-box offerings does not represent a diminished effort by the Round Rock, Texas, company to partner with solution providers, but rather a shift toward emphasizing Dell-branded systems in the channel. Dell will maintain its Solutionproviderdirect.com Web site with branded systems, the spokesperson said. In addition, Dell will continue to supply white-box system builders and solution providers with parts.

Frank Muehleman, the vice president and general manager of Dell's SMB division who launched the white-box channel program with much fanfare in August 2002, was unavailable for comment.

"This was based on the fact that solution providers prefer Dell-branded product," the spokesperson said. "Nothing else is changing. We are focusing on the products [solution providers] are most interested in."

Shawn Harty, president of NTSI, a Lowell, Mass.-based solution provider who had purchased white-box systems from Dell, said he was disappointed by the company's decision to end the program.

"I thought it was a pretty good program," said Harty, who bought a Dell white box a few weeks ago. "Dell probably wanted to get white-box solution providers on board and then just end the program. That wasn't very nice. You just can't trust Dell."

Tyler Dikman, president and CEO of CoolTronics, a Tampa, Fla.-based solution provider that sells Dell-branded systems, said he considered the white-box program a "joke" since the systems were priced higher than branded products sold through Dell.com.

"Killing the white-box systems is fine," Dikman said. "Those boxes were more expensive than an entry-level Dell Dimension or Optiplex. You'd have to be crazy to buy those things. There was no way to make a profit."

Avi Fleischer, president of solution provider Technical Difficulties, Brooklyn, N.Y., said he was insulted by Dell's white-box program because it provided no margin for resellers. "They were selling the white-box-branded systems to solution providers for more money than they would sell a Dell-branded machine to an end user," he said. "It was an insult for them to even ask us to purchase the Dell white box. I would never sell a Dell system."

Technical Difficulties sells its own white box, the Custom Solution PC, Fleischer said. "People come to us for an end-to-end solution," he said. "They like buying everything from us, including the white box, because they know we will be there to support it, and they know they can speak to someone locally if they have a problem."