CRN Interview: Contract With The Channel

In an interview with Editor in Chief Michael Vizard, Foxconn Channel Operations Sales Manager Mark Roslawski outlines the contract manufacturer's move into providing components for system builders.

CRN: What is Foxconn?

ROSLAWSKI: Basically, Foxconn is a contract manufacturer. That's our primary business. It's been in business since 1974. The easiest way for the resellers to recognize Foxconn is to typically look at the motherboard itself. We probably represent about 75 percent of all the connectors on motherboards today. We have a connector business, a motherboard business, a chassis business and a contract manufacturing business among our primary businesses. Last year we made 26 million motherboards for tier-one companies such as Intel, Dell, Hewlett-Packard, Gateway and Sony.

CRN: Recently, Foxconn began marketing a line of small-form-factor PC chassis called the Matrix line. What is the opportunity for system builders in this space?

ROSLAWSKI: We're going to offer that particular design as a barebones system. The systems will have three or four choices of motherboard platforms. The only reason we're offering the toaster-size version of these systems as a barebones-only design is because it's a little more complicated design. For example, the toaster-size PC design requires a slot-load rewritable DVD burner. Those are not typically available in the retail channel. It's more of an OEM product at this time. On our other small-form-factor products we will offer motherboards. But we will also offer some as barebones systems for select customers that want them. Some customers want us to build the barebones for them because the labor is a lot less expensive than having us ship components and them do the complete assembly. The primary area for small-form-factor PCs is in gaming and the SOHO market. Because of LAN parties, gaming is a growing segment of the business. On the SOHO side, if you have something that is a little more artistic, it's a little more living-room-friendly.

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CRN: In this particular area, Shuttle seems to be the dominant company with a direct-sales model. Is your goal to help system builders compete with Shuttle?

ROSLAWSKI: One thing you'll never see from us is that we'll never go into that kind of a model. The reason that we won't go to that kind of a model is because of our relationships with our tier-one customers. That would violate a lot of contracts if we started doing something like that. From our standpoint, we want to keep in the channel. We want to keep the channel as clean as possible. We're going to give the channel people the opportunity to expand their business.

CRN: How is the whitebook portion of the market doing?

ROSLAWSKI: The whitebook segment is growing. At some point, Foxconn will probably be involved in that portion of the business. Probably some time in next spring or next summer we'll be offering some whitebook type of opportunities to the system builders.

CRN: What opportunities do you see in the server market?

ROSLAWSKI: Currently, Foxconn is not offering any server-based platform motherboard in the channel. Our plan is to have a server-based offering for AMD probably before the end of the year. And on the Intel platform, we'll probably have something in the spring of next year.

CRN: There's a lot of concern these days over the new BTX chassis standard being put forward by Intel. When do you think this will have a significant impact on the market?

ROSLAWSKI: We're a very large partner with Intel on a lot of the design aspects of BTX, both in the motherboard and chassis. In fact, we delivered the first BTX motherboard and chassis to Intel last January. We've exhibited several chassis designs both in what we call a micro BTX as well as the standard BTX. And we're showing a couple of motherboard designs using 915 chipsets. Foxconn will definitely be a player in the channel with BTX because we're also somewhat of a player in the OEM world of that particular side of the business.

CRN: As the commercial systems business becomes more of a commodity market, are you seeing more solution providers moving in the white-box market as they look to differentiate themselves from companies such as Dell and Hewlett-Packard?

ROSLAWSKI: We see that trend. And by leveraging the third largest contract manufacturer in the world, the motherboards these customers buy are manufactured at the same quality conditions as our OEM business. So they can explain that to their customers, and it helps go a long way with getting the customer's business.