CRN Interview: Steve Dallman, Intel

Steve Dallman, director of North American distribution and channel marketing at Intel, recently sat down with Senior Editot Joseph F. Kovar to discuss the gray, or open, market and other white-box topics.

CRN: I was wondering if you could update us on the gray market for Intel's processors and other products?

Dallman: It's our belief [the open market] ends up hurting smaller resellers more than people believe.

Some people would say it actually helps them because they get a lower price. But when you look at the drivers behind the open market, what you actually see is a vendor or supplier who suddenly at the end of the quarter will cut a price in order to make a number. %85 That same supplier will then delay a price move that it could have provided to its customers rather than to [the broker].

The natural state of things is that there's a 10 percent [price] ebb and flow that's needed just for inventory balancing,for people who buy too little or too much.

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CRN: What's Intel going to do in terms of getting vendors to move more build-to-order white-box notebook PCs into the market?

Dallman: I can remember long ago, when the first motherboards came out, all of them were different configurations and standards and patterns and things like that. Every chassis was different. But over time, as the volumes grew, the natural order of things was to become more standardized, more modularized.

We can certainly influence the size of the CPU or the module space that needs to be there. But we can't influence the rest of it.

As more white books are built, more and more vendors are going to look at what modules and standards are needed, and we'll see an overall growth in standards across the industry.

CRN: Is Intel looking at ways to level the pricing between the large OEMs and smaller integrators?

Dallman: We've tried to make those two price points as competitive [as possible so] they're not swinging the cost of the PC one way or the other.

One of the ways we've done that is by including the fan with the CPU,it takes out assembly steps. [We're also] providing a three-year warranty to customers, expanding the three-year warranty to the motherboards, putting the ICR,the Intel Channel Rebate,in place [and] extending the Intel Inside program potentially to thousands and thousands of customers.