Whitebook Builders Score New Windows OS Rebates

That contribution comes in the form of rebates of between $5 and $10 per unit on the Windows operating systems used in custom notebooks, said John Ball, general manager of Microsoft’s U.S. System Builders Partner Group, Redmond, Wash. “I think this is basically an incentive to get started on this initiative,” he said. “We would like to do more.”

Microsoft will test the impact of this initiative and revisit it next year, Ball said. Intel already is offering rebates on its Core Duo CPUs, which solution providers peg at around $25. Seagate also has stepped up to provide a 4 percent to 20 percent discount on its Momentus 5,400-rpm drives, said Jennifer Bradfield, director of channel marketing at Seagate Americas, Scotts Valley, Calif.

To receive the rebates, system builders must purchase these components bundled with a whitebook chassis that is part of the “Verified by Intel” program through distributors Synnex or ASI. The chassis supports a standardized set of components—including drives, LCD panels, batteries and AC adapters—that is part of Intel’s program to ease device integration and serviceability.

Many system builders, eager to improve whitebook sales, have been waiting for some sort of incentive from Microsoft. Intel and Microsoft announced at the Intel Solutions Summit that the pair would collaborate on the program and would finalize the details within weeks after the mid-March conference.

“Whitebooks are struggling,” said Jeff DiBella, vice president of sales at AOpen Center, a system builder in Gaithersburg, Md. “Microsoft needs to do something.”

AOpen Center’s component costs for whitebooks are about 20 percent higher than the cost for a fully integrated system from top-tier OEMs, DiBella said. Moreover, the company is still on the hook for at least one year of support, he said.

Privately, some system builders blistered at the program’s structure. Several were hoping for higher incentives from Microsoft. Others didn’t want to get the rebates through distribution; they have been buying the chassis direct.

Steve Dallman, director of distribution and channel sales and marketing at Intel, Santa Clara, Calif., said most Intel Premier Providers buy through distribution. Discounts are already built-in for those that purchase components direct, he said.

Meanwhile, Ball said Microsoft is working to keep price points consistent among the channel by putting significant resources into shutting down organizations that use pirated or unauthorized software.

PAULA ROONEY contributed to this story.