Take Note: White Books Climb Again

"It used to be I wasn't big enough to get any piece of that pie at all," said Mark Ethridge, CEO of Southeast Computer Group, an Orlando, Fla.-based system builder. "Now, I've seen a 200 percent increase over the last six months."

The number of solution providers citing custom systems as their best-selling notebook jumped to an all-time high of 16 percent in the July edition of CRN's Monthly Solution Provider Survey. Meanwhile, the number of those citing Hewlett-Packard notebooks dropped to just 14 percent from June's 27 percent, and those citing IBM barely registered. Dell was the big winner: 41 percent said the vendor was their best-selling notebook brand, compared with 24 percent in June.

More than 200 solution providers--about two-thirds of which see most of their business in small and midsize enterprises--participated in the survey.

While the IBM result could be explained as a monthly blip, it continues a downward trend. In June, 10 percent of solution providers named IBM's notebooks as their best-seller; in July 2003, the figure was at 21 percent. Custom-system builders also maintained a strong presence in servers and desktops, while HP, IBM and Sun Microsystems either lost share or remained near all-time lows.

System builders say customer acceptance of white boxes is based no longer simply on price, but on service.

"We're finding resellers that are not opposed to selling something that has no name on it," said Rich Wallett, executive vice president of manufacturing at Systemax, the Port Washington, N.Y.-based system builder, solution provider and parent company of TigerDirect.com and system builder InfoTel. "And I don't think it's about price. I think it's to some degree the service-level expectations that people are tending to seek from large companies vs. smaller companies."

John Matthews, vice president of sales at BWC Products, a Ladson, S.C.-based system builder, agreed. "We used to be purely white box; now we provide local service, contracts and support," he said. "If I'm a customer, no matter how many Dells I buy, I'd probably never get to talk to Michael Dell."

Custom Unix-based systems also scored well in the latest CRN survey. A year ago, 31 percent of solution providers said Sun was their best-selling brand. In July 2004, however, that number dropped to 11 percent. The number of solution providers citing custom servers as their best-sellers grew to 28 percent from 20 percent in the same period.

Southeast Computer's Ethridge said while his customers have not yet opted for large-scale enterprise solutions, he is starting to get feelers that he hasn't gotten before. "I'm starting to hear customers asking a little bit more about Linux," he said.

Still, given the growth of custom systems in other areas, he suggested it will be only a matter of time before this segment becomes a larger portion of his business.