Intel Pushes Whitebook Standards
Lawrence M. Walsh
Intel believes that standards are the key to breaking open the whitebook market, making it easier for systems integrators and white-box builders to compete against OEMs and expand their businesses.
Standards will reduce complexity and inventory challenges that dampen whitebooks, according to the chipmaker. If all whitebooks use the same power supplies, screens and optics, it will make parts more available and affordable.
By definition, though, whitebooks are custom, purpose-built machines that meet the requirements of their buyers. Even with the reduced components cost, standards-based whitebooks won't be able to compete in price with commoditized, low-end machines by Dell, Hewlett-Packard, Lenovo and Acer.
But in Intel's view of the whitebook world, price isn't an issue. Value that systems integrators and whitebook builders bring to the equation is where money is to be made, the company said at its annual Intel Solutions Summit in Scottsdale, Ariz., yesterday.
"Dell and HP have higher value of scale, so systems integrators need to find value through services," says Bill Siu, vice president and general manager of Intel's Channel Platforms Group. "Intel's approach to the channel isn't that you build a business on 5 percent faster or 5 percent cheaper--it's all about the value."
Standardizing whitebook components will open new value opportunities for integrators. The availability of parts will make it easier and cheaper to service custom devices. Currently, it's easier to replace an entire notebook than pay the parts and repair costs.
Intel is also working with whitebook manufactures and distributors to bring the new model to fruition. Crucial is making parts available to system integrators, relieving them of the burden of carrying unused inventories of spare parts. The chipmaker wants to make its new dual-core chips, Napa architecture and Centrino 2 technologies the cornerstones of this standards-based whitebook market.
Intel acknowledges that there will be some tension with major brand notebook makers, since standards-based whitebooks will cut into their markets. Nevertheless, the company believes the notebook market will continue to grow, leaving room for everyone to profit.
"There's going to be some tension, but if you look at standards, they almost always prevail because they meet the users' needs," Sui says.
Intel expects its support of whitebooks to double the market size over the next year.
"This gives resellers the opportunity to participate in a fast-growing market," Sui says. "OEMs will grow, but we're opening an untapped market opportunity."
Many systems integrators believe they'll be able to profit from Intel throwing its technology and brand behind whitebooks. But price will still be an issue.
As the argument goes, whitebooks by definition are purpose-built and have more features and capabilities than commoditized commercial machines. Systems integrators can build inexpensive machines; what they can't do is layer software on them cheaply.
"When I put together an inexpensive PC and they want XP Pro, that adds $500 to the cost. The software ends up being 60 percent of the price of the inexpensive solution," says David Romick, chief operating officer of HBR Technologies in Carrollton, Texas.
Microsoft, a supporter of Intel's whitebook initiative, says it can only bring the cost of software down so much for whitebox builders. What it's trying to do with its "Find A Local PC Builder" program is connect more whitebox builders with customers and provide them with value-add incentives for their customized machines.
"The reality is that giving a discount isn't going to be enough," says John Ball, Microsoft's general manager of U.S. Systems Builder. "What we can do is help systems integrators differentiate themselves in the market and create opportunities for them to be successful."
Microsoft's local systems-builders initiative includes providing whitebook makers with added applications and technologies that, in theory, are valued by the end users.