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The Almighty Buck

'White Box' Makers Take Up The Slack 231

n3hat writes: "This story in the business section of the Baltimore Sun points out that the 'pooter bidness isn't as bad as the publicly-traded companies report. Seems that as much as 45% of systems are assembled by screwdriver shops and other white-box makers, not the big guys." No huge surprises here.
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'White Box' Makers Take Up The Slack

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  • OEMs are still cheaper for the public by far...retail has too many useless software bundles that jack up the price.
    • Of course if you are friends with the owner of the screwdriver shop, the deals are sweet.

      Our suburban neighborhood has a mod shop staffed with UNIX/Linux, pierced, pinned, painted goths who know how to make em fly. Pass a bud to them and you get more RAM.
    • Re:Yes... (Score:3, Informative)

      I used to work for a company and we built some machines. To be honest there was absolutely no way to compete with Dells and the like on price. The only reason we built systems was to service our regular consultant business. For the most part we only built systems for business customers. Some just demanded the best most stable systems, others had special needs. For instance high end graphic design workstations, and some servers. Sometimes we would build them for sound studios and such. If someone wanted a regular system we would just sell them a retail HP or IBM, it was cheaper for them and more profitable for us.

      Our component cost often exceeded the cost of a whole Dell system, but we cherry picked only the nicest most stable stuff. Even considering that we generally favored. You can buy a $10 power supply, or you can get a $50 Antec. Chances are that $10 supply will fail in a week while the Antec will last 5 years. Ditto for graphics cards, (second most failure prone component.) Frankly the cost of having a productive worker without his computer for a day or more exceeds the cost of getting a good computer to begin with.

      If you find a white box system cheaper than a Dell you better be pretty suspect of what is in it.
    • Re:Yes... (Score:2, Interesting)

      by puto ( 533470 )
      Oems are not cheaper, not the mom and pop shops.

      The larger companies have the abilities to buy in bulk and get the BEST prices on things and bundle a lotta stuff that you would have to pay mom and pop for and are much better on the warranty(usually).

      I am not talking about the Dells and Gateways. But companies like Systemax and others. There used to be plenty of companies like this in the early to mid 90's. Micron, Quantex, Cybermax, sold great bundles at great prices.

      I mean you can look at the Home Shopping channels and get a great rig for a grand.

      My father bought one. I almost choked him after he called me to see his new box then I saw what he got for 1100 bux.

      Athlon 1800
      512 DDR
      Radeon 64 TV Out
      Printer
      Scanner(works great) USB
      Logitech optical mouse and Internet Keyboard
      19 Inch Samsung monitor
      Gravis Gamepad
      DVD 16x
      CDR 32/10/40
      Nic(generic but works with his dsl and home network)
      Sound(Ac 97 fine for just about anything)
      XP Home(like he is gonna join a domain)
      A little Digital camera
      Works( good for mom)
      2 year warranty
      and a shitload of software from gretting cards to photoediting...
      subwoofer and speakers that look and sound good

      Honestly it is a nice box, their second one in 3 years, and the first one is still kicking(in kitchen with new flatscreen for mom, installed tv card, connected coax and now she watches MArtha Stewart and downloads recipes at the same time, I 802 the DSL and they have 4 pcs in various rooms.

      Screwdriver shops can;t do this for the price. I have worked in a few, and also been the buyer for several. I used Tech Data, Merisel, you name em, for parts, as a high tier provider and a comparable system built with all hardware and goodies bundled would be about 1600.

      PLUS POPS HAS A SUPPORT LINE BESIDES ME.

      So look at this place

      http://www.cyberpowersystem.com i am not associated with these guys.

      I am actually getting my new box from them. CHEAP AND GOOD, and all quality parts. My kinda screwdriver shop.

      Puto
  • by Anonymous Coward on Sunday June 23, 2002 @01:52PM (#3753027)
    You control all your components and the way they're installed. I've seen too many of these boxen have loose ribbon cables impeding air flow, insufficient heat sinks, cheap PC Chips motherboards *shudder*, and any number of other problems. Even the good pre-built deals have a catch somewhere.

    Build your own, learn something about hardware and software, and feel more confident to upgrade it. It's only slightly more difficult than putting together Ikea furniture.
    • I'd like to second that *shudder* at the name PC Chips. I had to do an inventory/software upgrade for an entire hospital, about 70% of which was running Whiteboxes with PC Chips boards in it. Trust me, we were looking for reasons to decomission those!
    • So now I am looking for a way to assemble my own laptop so I can finally get rid of those Winmodems they all ship with...
    • I was a Mac user until my 18th birthday. As a result, I had never installed a card/processor/anything in my box. When I got my PC, I immediately took a look and thought "gee, that'd be easy to build." Within a year I built my own PC. Ikea furniture, on the other hand, still eludes me at times. On the whole, computer components these days are pretty user-friendly; however, the assumption that installing memory/processors/upgrade cards protects an industry not unlike the auto repair business; unskilled jobs for people who don't mind doing repetitive, boring tasks that generally are not clean or safe and most definetly do not involve a desk. Go to your local Best Buy, and they'll do all the work on your computer for you, charging exboritant rates for work done by a technician paid a little more than minimum wage. The company gets a huge profit, the user continues to feel incapable of working on their computer, and a new industry is created. If everybody built their computer at home, this whole thing wouldn't be possible.
      Home-built may be best, but it's only best when everyone understands the technology. The interesting thing about the information age is it's the first age in human technology where the vast majority of the technology consuming public has NO understanding of the technology they use. As a result, service industries like mechanics and computer technicians form an important part of our economy. I don't know whether we should arrest this trend or not; on one hand, it promises high-paying jobs and status upon those who understand the technology; but on the other hand, it limits innovation only to those who are in the know. In the case of the internal combustion engine, we should be able to see (from the lack of design progress over the last 100 years) that this type of thing leads to stagnation. The computing revolution shouldn't be leaving so many people out, but instead of including the general public, the comupting people (/. included) has left the general public out. The masses at the gates need to know more, if for any reason, then because they'll support open source more fully if they REALLY understand why it is a better solution. If we leave the masses at the gate, they'll eventually become disinterested and treat computers like they do their cars. I don't want to see what that kind of lack of interest will do to our information technology systems; the roads are bad enough that the very prospect is horrifying. If you think I'm wrong realize that the best plans and projections helped design the roads in the United States, and even with that information available, the roads suck. Without an informed, interested Internet public, we'll see the same kinds of problems cropping up again.
      But, of course, this is all conjecture. If anybody is interested, of course let me know what you think.
    • Sometimes home built is the best - other times?

      I was a white box maker, oh, 10 years ago, and still deal with one now

      If you find the RIGHT white box maker, you sit down with a parts list of say 20 cases, 20 motherboards, etc, and spec exactly what you want. Most of the vendors I deal with will do everything from cheap no name parts to top of the line name brand

      Sometimes it just pays for them to put them together - you have to know your vendor. I've paid as little as $20 over the price of the parts to have a PC put together - and they did a nice job. My time is worth more than that

  • When you see the price tags, you understand why...

    Sure I would prefer a Sun or IBM box, but my wallet is not ok.
    And guess who decides! Me or my wallet?!

  • by blair1q ( 305137 ) on Sunday June 23, 2002 @01:52PM (#3753031) Journal
    A part's a part. Intel should be overselling its predictable sales by 100% if half the computers are jobbed. AMD's doing no better (and may be losing market share, meaning it's losing unit sales even faster than Intel).

    These guys have no real competition.

    So if the market's still so healthy, why can't they sell parts?
    • I have a friend that works at medium sized computer company, and he deals with this problem every day.

      He says that the new AMD chips seem to have manafactoring problems as of the 25 or so AMD boxes they put togeather a day, at least 1 just wont do anything.

      However he says intel chips are better, but more expensive, which in his market is not a good thing.

      Medevo
    • by dboyles ( 65512 ) on Sunday June 23, 2002 @02:11PM (#3753121) Homepage
      So if the market's still so healthy, why can't they sell parts?

      I'll tell you my theory, which is just that - a theory. I don't have numbers to back this up, it's just based on what I perceive.

      Gone are the days that we drool over our friend's new rig with oodles of megahertz and megabytes. A 400 MHz machine with 128 MB of RAM and a 15 GB hard drive will run pretty much anything a consumer requires, save for games. Before everybody you know had a computer, the machine you bought two years ago isn't fast enough now (meaning 2 years after you bought it) to run those productivity apps that really would make a difference in the way you work.

      Add to that the fact that the low-end PC market has become hugely competitive, with computers down into the sub-$400 range. Profit margins are lowered, and while methods of reducing costs have been introduced, they haven't kept pace with the dropping "going rate" for an entry-level computer.

      It used to be that $3000 would buy you a nice machine that would be a top performer, even in terms of 3D graphics. The Dell sitting next to me was about $3300 back in April '98, and it was definitely one of the nicer desktops available at the time. But to get similar performance relative to current technology now, I'd only need to spend about $2000. And there are lots of ways (including lots of companies) to arrive at that price.
      • With the price of RAM, hard drives and lower-end graphics cards being pretty reasonable nowadays, there is no real incentive to actually buy a new computer for most users.

        For example, right now I'm running a computer with an Abit AB-BM6 motherboard with 320 MB PC-100 SDRAM, 500 MHz Celeron A CPU, 8 GB hard drive, Matrox G400 DualHead AGP graphics card, a no-name PCI sound card with the Yamaha XS-DG sound chipset, and a Zoom Telephonics 2949L external V.90 modem. That's far more than enough to run Windows 98 easily, surf the Internet and run Works 2000 productivity software.

        If I were to upgrade my system so I can run games, I can easily get a 40-60 GB ATA-100 hard drive, swap out the Matrox card for an ATI Radeon 7500 AGP card, and upgrade the CPU to a Celeron 850 MHz Coppermine CPU using a special Socket 370 adapter from Powerleap.

        I think people will be surprised that a memory upgrade plus hard drive upgrade will speed up the system 50-75% pretty easily.
        • Yeah but you're still running PC-100 ram and your motherboard (which only supports up to ATA-33) will bottleneck the hard drive. Even though the 440BX chipset was a great chipset, it's not even close to todays standards for games. Try doing your upgrades and playing Neverwinter Nights.

          Anyways... another reason people get new computers is when a major part breaks and it's cheaper (or more cost-effective, anwyways) just to replace the whole unit. Example...motherboard toasts on your Slot A Athlon 700 machine. It's more worth your money just to buy a new barebones machine than to scrounge for a used motherboard somewhere and go through all the effort of replacing it. We all know what happens to Windows (even linux, admit it!) when you change motherboards.

          -kwishot
          • Actually, I have my doubts that Neverwinter Nights would push the limits of ATA-33 IDE connections, especially if you have a modern IDE drive running at 7200 rpm and sporting a 2 MB on-drive cache.

            Powerleap should soon ship the PL-370/T CPU upgrade, which will allow the installation of the Tualatin-core Celeron CPU running at 1,200 MHz on an AB-BM6 motherboard. At 1,200 MHz CPU speed that is more than enough to keep up with Neverwinter Nights, IMHO.
      • by jedrek ( 79264 ) on Sunday June 23, 2002 @02:57PM (#3753272) Homepage
        Gone are the days that we drool over our friend's new rig with oodles of megahertz and megabytes. A 400 MHz machine with 128 MB of RAM and a 15 GB hard drive will run pretty much anything a consumer requires, save for games. Before everybody you know had a computer, the machine you bought two years ago isn't fast enough now (meaning 2 years after you bought it) to run those productivity apps that really would make a difference in the way you work.

        Exactly.

        My mother's been using a dual celeron 366, a hand-me-down after I got my P3-866. It's enough for her to do everything she wants (MS Office, surfing, email, IM). It's a 3 or 4 year old machine hooked up to a 10 year old laser printer and a new monitor. She doesn't plan on upgrading it anytime soon, and neither do I.

        I run a P3-866. I do web graphics, DTP, animations, NLE, etc. on it and find it only lags while working on full pal dv clips. I plan on upgrading it to a dual athlon setup sometime within the next 18 months.

        Computers are powerful enough, really. Hell, I bought the P3 used, payed about 3/5ths of what I paid for the dual celeron 18 months earlier and it came with a larger HD, twice the ram, a better gfx card and so on. If I hadn't gotten into NLE I wouldn't even be thinking about an upgrade.

        Games run fine, I can work. What more do I need? It's the same question everyone asks. And it's about time. Not many people switch up their car every 18 months because there's a newer, faster one out. Hell, almost nobody buys a new TV every year because of some new features. It shouldn't be that way with computers either.
        • "My mother's been using a dual celeron 366, a hand-me-down after I got my P3-866. It's enough for her to do everything she wants (MS Office, surfing, email, IM)."

          What's interesting is that the dual machine your mother has now may actually be faster to her than the 866 you have. No, I don't mean that the apps are going to run faster, I mean that the Windows interface will be more responsive.

          I've noticed that my dual machine at work (550) was far more responsive than my Athlon 1.2gig at home. I think the reason for this is that Windows' multi-threading techniques keeps the interface from getting lagged on multi-processor machines. So even though I may be doing lots of stuff, Explorer/IE etc are still very responsive.

          If your mother were to use your computer, she may feel that hers is more powerful. I doubt she'd notice the megahertz difference. To think, if Intel were to sell dual processor machines to consumers, they may wait longer to buy upgrades.

    • A part's a part. Intel should be overselling its predictable sales by 100% if half the computers are jobbed.

      Not necessarily Intel, everyone I know who builds computers as a hobby, myself included uses AMD. I'm sure there are quite a few Intel building hobbyists out there but as far as a percentage of sales, I think it is safe to guess that hobbyist sales make up a much more significant percentage of AMD's sales than Intel's.

      • That's because the gray market lowers your chip prices. Big OEMs more than about 5,000 units a year have to purchase from AMD at the prices they sell 1,000 units for (its about 50% more than you pay. However, really big OEMs especially in Europe can get a better deal on larger volumes 10,000+. So order more then they need to get the discount and sell the extra for very large discounts. The pricewatch vendors, or their wholesalers buy these and sell them to you for very large discouts. AMD chips are not nearly as cheap as the relative street prices would seem to indicate. Intel's street prices do not seem to follow this pattern. Street prices are about 10% below wholesale. I don't know if Intel controlls their channel better or if they don't make the same level of price breaks if you order in very large quantities. That's why hobbiests can build AMD systems for so much less than Hewlett-Packard or Gateway.
    • I would think Intel, and to some point AMD, would sell slightly more than predicted if the PCs are custom-built.

      Every time I build a computer I use AMD processors, but if I were building it for someone else, I would use Intel. It would not be my choice, it would be the client's, because trying to explain to them that the processor doesn't have to be a "Pentium" would be a futile waste of time and would not save ME any money.

      People want a little bit of brand recognition when they don't know what they are buying, and the people that make any difference in the statistics do not. If they are buying a Dell, they will be confident with whatever is inside, but if they are buying a PC assembled in some local shop, they will want to make sure it's a "Pentium computer" and that it runs "multimedia".

      Companies like Dell and Compaq have more leverage to push non-traditional processors in order to save money. As far as I know, there are consumer products using the Crusoe. But a white-box assembler will try to minimize risk and stick to what they can advertise to the customer, Intel and now AMD processors, which are mainstream.

      Of course, that doesn't mean they are buying the processors Intel and AMD want them to buy. A cheap Duron or Celeron running at 1Ghz may be more convincing than that Pentium 4 Intel is dying to sell.


    • Please, learn how to use an apostrophe and/or 's' for everyone's sake:

      Usage: Possessive
      Example: Mary's coat.

      Explanation: The apostrophe and 's' here are used to indicate that the coat belongs to mary. Leaving the apostrophe off would indicate that there are several Mary and they are some sort of coat, quite confusing if I might add.

      Usage: Plural
      Example: Leaves on a tree.

      Explanation: The 's' is used here to indicate that there are several leaves (more than one). Please note that there can not be an apostrophe on leaves, since the verb 'on' is usually not used possessively (as most verbs are not used possessively).

      Usage: Contraction
      Example: It's a nice day today.

      Explanation: Notice in this expample that if you think of the apostrophe 's' as a possessive usage, the sentence is quite confusing (the object 'it' has an 'a' which is then the object of 'nice day today' - huh?). The 'It's' is part of a special family of words called contractions in which two words are shortened into one word (for pronuciation purposes I believe - such as in Spanish and the combination of 'de el' into 'del'). Only certain combinations of words can be shortened under this contraction method, and generic nouns typically can not be shortened. I believe proper nouns such as AMD and Intel can never be contracted. Also not that when using a possessive 'it' the additional 's' does not include an apostrophe.

      Your paragraph should have been:


      A part is a part. Intel should be overselling its predictable sales by 100% if half the computers are jobbed. AMD is doing no better (and may be losing market share, meaning it's losing unit sales even faster than Intel).

      These guys have no real competition.

      So if the market is still so healthy, why can't they sell parts?
    • An interesting tale of moderate in this thread:

      The original post asks: if it is true that the computer market is still fine, it's just that sales are shifting from brand-name makers to white-box makers, why don't the statistics we are seeing from Intel and AMD reflect a healthy market? If it's just the brand-name makers who have a weak computer market, but white-box sales are up and are making up for the weakness in the brand-name market, why are overall CPU sales still weak?

      Ok, that gets modded 4, Insightful, as it should.

      dboyles responds that the reason CPU sales are weak is because people no longer need to upgrade - they can do everything they want with a four year old machine still.

      This is a good point, but it is not at all related to the point originally being made, which is that if white-box sales really are making up for weak brand-name sales, the CPU makers' statistics should show this, but are not. Moreover, dboyles' point isn't even related to the point in the article.

      dboyles' posts gets a 5, Insightful, higher than the original post.

      MtViewGuy responds by reiterating dboyles' point that old computers are already fast enough for most computers, and then makes the additional point that if you do need a faster computer, you can just upgrade your existing computer instead of buying a new one. This is a valid point, except that it does not actually explain the weakness in the computer market. After all, are upgrades cheaper relative to the cost of a new computer now than they used to be? Are more people comfortable with upgading their own computers now than used to be? These factors would have to be determined (SlugLord speaks to one of them in another thread) before we could know if the ability to upgrade our computers had anything to do with the weakness in the computer market.

      Moreover, because MtViewGuy specifically mentions upgrading by buying a new CPU, he doesn't answer to blair1q's original post - which is that if only the brand-name market is weak, then why are CPU makers' sales weak too. If people are upgrading by buying new CPUs, then CPU makers' sales would still be strong even though brand name sales of boxen were down.

      MtViewGuy's post is moderated as 3, Informative.

      jedrek posts saying that existing computers are already powerful enough for most people, repeating the point made by MtViewGuy and dboyle.

      jedrek gets moderated 3, Insightful.

      asv108 tries to contradict blair1q's original post by saying that people who build custom boxes use AMD, not Intel, therefore the fact that Intel's sales are weak does not show that the overall computer market is weak, not just brand-name manufacturers. This would be an ok point, except that he relies on selective quoting. He quotes blair1q saying "Intel should be overselling its predictable sales by 100% if half the computers are jobbed." But he ignores blair1q's next sentence: "AMD's doing no better (and may be losing market share, meaning it's losing unit sales even faster than Intel)." This sentence, of course, disproves asv108's whole point.

      asv108's post has a score of 2.
  • understandable (Score:2, Insightful)

    by SlugLord ( 130081 )
    This is quite understandable, considering the increasing population of computer-confident consumers, who are no longer worried that they don't have 80 years of tech support and a pretty logo (though some of the white boxes come with pretty logos now). My father is convinced that for his needs, a big national manufacturer is the best way to go, but as for me, I want more bang for my buck, a sentiment I think is becoming more common.
  • by Anonymous Coward on Sunday June 23, 2002 @01:54PM (#3753041)
    From the article:

    "Plexus built 20 machines, each with 2 gigabytes of processing speed and the ability to run the thousand-dollar video card needed for the engineering program"

    I wonder if he put 900MHz or memory into the machine?
  • by Medevo ( 526922 ) on Sunday June 23, 2002 @01:55PM (#3753048) Homepage
    With the (United states) economy the way it is struggling to stay out of a recession this is a natural step.

    A good computer can cost as much as $4000 from a large computer corporation. If you buy the same PC you could expect to pay less (in the range of 250-500). This is quite a sum of money and most people will jump at the chance to save this on their new PC.

    What the large computer companies need to do to stay competitive is find way to cut corners like the smaller companies. Skipping the $300+ dollars a box for M$ would be a natural step.

    Medevo
    • A good computer can cost as much as $4000 from a large computer corporation. If you buy the same PC you could expect to pay less (in the range of 250-500). This is quite a sum of money and most people will jump at the chance to save this on their new PC.

      I think that you probably ought to qualify your statement by defining a "good computer." At the company where I work (45,000+ desktops) our standard PC is an IBM Netvista, and they usually run about $1000 each without a monitor. We do have a very limited number of Intellistation workstations that we use for financial modelling and forecasting, but even those don't cost us $4000.

      If by "good computer" you mean a multiprocessor Pentium 4 Xeon system with RAID 5 Ultra160 SCSI, gigabit fiber NIC, 4 gigs of RAM, and a 128MB Nvidia super-duper-ooper video card and a DVD-R, then I could see your point. But I've seen systems advertised with an Athlon XP 2200+, 256 MB DDR RAM, 64 MB Nvidia card, 80 GB hard disk, a DVD-ROM, CDRW, and a 17" LCD display for around $2200, with an inkjet printer thrown in for kicks.

      Back in 1993-1994 it was not uncommon for a "top of the line" desktop PC to cost $4000, but of course the "average" PC cost $2500-$3000 at the time. Nowdays the average PC retails for under $1000 with a monitor, and "top end" consumer or business models rarely go over $2000.
    • Sorry was thinking in CAN dollars
      A $4000 can computer would cost about $2500 American

      Medevo
    • What the large computer companies need to do to stay competitive is find way to cut corners like the smaller companies.
      Having worked for a white box retailer not too long ago, I can tell you there isn't that much room for shaving in the large company. Your local white box retailer, especially if the pond is sufficiently small (like Paso Robles, CA), can afford to underpay their help significantly. Dell or Compaq, they's city people, which enlarges their talent pool to burn through but increases the local wage.
      Skipping the $300+ dollars a box for M$
      Is that what it's up to now? About five years ago, it was $110 for a bundle with all sorts of MSFT and non-MSFT crap^Wsoftware^Wcrap, of which the only piece of marginal utility was the Windoze CD and then only because it had COMMAND.COM on it.

      Frankly I wouldn't mind seeing RealPlayer dragged into the street and run over repeatedly by a half-track, but an out-of-date version of that comes free with many OEM bundles too.

      -jhp

      • Skipping the $300+ dollars a box for M$...
        Is that what it's up to now?

        Yep. I paid about $120.00 for the Win2K Professional that was bundled with my new white-box PC, but I assume the vendor had the favorable OEM pricing.

        Win2K Professional is about $300.00 retail in a typical mail-order catalog.

        Granted it's not Microsoft's low-end operating system, but the point is that yes, you can pay $300.00 for just the OS now, on a single PC.

  • "Plexus built 20 machines, each with 2 gigabytes of processing speed and the ability to run the thousand-dollar video card needed for the engineering program."
    I have always dreamed of a machine with such processing power.
  • No huge surprizes here.

    Well, ignoring the spelling error, I am still pretty surprised. Among my friends, nobody has ever had a "local shop" assemble our computers - Theyre either HPs, Dells, or DIY projects. Of all the people I have helped get computers, They never go with the local shop - They seem more comfortable purchasing from a big, stable company, like Dell. I do not know anybody that has a local shop computer, and yes, I do live in an area where there are local shops. But I have never seen anyone with a White Box computer.

    However, I can see how a local shop computer might be cheaper or more reliable. So that said...Do any /. readers have a white box computer? Were there any significant issues regarding warranty, price, or component quality? And most importantly, would you recommend a White Box over a Big Name for people looking to purchase a new computer?
    • buying a dell is a waste of money
      buying a hp is a waste of money

      however if you have the money to waste, that's not a problem.

      Your tired of using your room mates/mothers/fathers/sistesrs/brothers computer? want your own? just got a 500$ pay check?
      Let's go buy a case, board, ram, keyboardmouse, harddrive, and borrow an operating system! yay our own computer for 499$! and since your indian you get a 8% sales tax cut.
    • Re:Im surpized (Score:2, Informative)

      by timothy ( 36799 )
      Well, surpisingly, both spellings are listed by the American Heritage dictionary, but it *was* a goof, so I changed it :)

      timothy

    • Re:Im surpized (Score:3, Interesting)

      by drinkypoo ( 153816 )
      Really the only advantage of a prebuilt system from a big name is the support contract. If you can find a local shop with good support, then you're better off with a handbuilt, and here's why: You get the good components. Why have some stupid proprietary motherboard only replacable by the same part by one manufacturer? Even if it doesn't have a bunch of onboard crap, it's still unreplacable by going down to fry's and picking up the latest greatest ATX board with the latest CPU form factor.

      I built my own machine, of course, but someone else could build a system for what I paid, and I paid a lot less than a prebuilt for my functionality, plus everything in my system (except my dvd-rom) is a top name brand; abit, creative, plextor, adaptec, etc. Maybe not my video card... is visiontek a top brand now? :) but it's a GF3Ti200 64mb, and I got it for $94 shipped.

      The GOOD thing about buying from dell or similar; You can get a support contract for a couple hundred bucks which doesn't even require you to take your PC in somewhere; Someone will actually come to your house and replace your crappy proprietary hardware. But really, if your local shop has good service, you're better off being able to walk in and yell at someone.

      • Re:Im surpized (Score:3, Insightful)

        If you can find a local shop with good support...

        In my experience, the inability to find such a shop is the #1 reason for turning to Dell/Gateway.

        You get the good components. (at a local shop)

        While it is more likely you'll get good components from a trustworthy local vendor, it can be very hard to find one that is trustworthy. It's easy for me to spot the scum, but it is very hard for people who are not so tech savy like my parents. When a normal person goes computer shopping, they see some numbers like 1.4GHz, 512 MB Ram, 20 GB hard drive. They have no idea what an AGP/PCI slot is, what it means to have onboard sound/video/ethernet/modem. They don't recognize brand names like Asus and Abit. Local dealers often take advantage of this by selling you a system with cheap/slow RAM, crappy offbrand all in one motherboards, in a case with an inadequate power supply.

        That said, 5 o'clock computers [5oclock.com], best shop I know of. Won't buy anywhere else.
        • That said, 5 o'clock computers, best shop I know of. Won't buy anywhere else.

          Right on! I'm from the Dayton area myself, but now living in Oklahoma, and I order parts from 5 O'Clock all the time, both for personal systems and boxen at work. Their prices are great, and I've had a lot of good experiences in their store (the Beavercreek one; I haven't been to the Springboro one yet). It is so nice to have a good screwdriver shop near home...just wish I had one down here.

          Perhaps somebody can start a site for rating local shops, so we can pool knowledge?

    • My company used to use white box computers. They were made with quality components. (I don't remember their prices, but if they were too high, we probably would have bought from someone else). When we had problems with the equiptment, they always shipped replacement parts quickly and were helpful. Then again, we were probably one of their largest customers.
    • I have a couple of white box systems.


      Reason why, is that I work tech support for a big OEM, but since I'm a contract worker I get no discounts, and I need to know the latest os's from MS and a couple of the major software packages.


      Why does that mean that I would need whitebox systems? Well quite simply because I also run a small pc repair business and CAST (the canadian equivilent of the BSA) has been quite active in the area for the last few years. Whitebox systems vendors generally will sell you the oem version of windows or other software at cost or at a very low price. It would have cost me *more* to purchase windows 2000 pro and office 2000 pro so that I can support them better then getting a new system to run them on and adding it to my kvm switch.


      So quite simply for anyone running a small business it's a matter of CYA.

      • You can legitimately, and within licence terms, purchase an OEM copy of Windows and/or Office without buying a complete 'Whitebox' system from a local vendor. The requirement from Microsoft is (or has, in case they've changed it quite recently) been that the OEM bundle has to include a motherboard and processor, or a hard drive. I wanted another OEM W2K copy about a year and a half ago, so I went to the local parts dealer and bought a Hard drive and the copy of W2K, which cost $160 bundled that way.

        About 10 months ago, I bought a big old SCSI hard drive for another project, off eBay. It cost me all of $30. The vendor bundled in a free copy of Office 97 OEM (unopened, full copy) that I hadn't even noticed mentioned in the fine print of the deal. That's old Office software, but it's always handy to have another 'legitimate' copy to be able to trace back to if The Man comes looking.
    • Do any /. readers have a white box computer? Were there any significant issues regarding warranty, price, or component quality? And most importantly, would you recommend a White Box over a Big Name for people looking to purchase a new computer?

      I bought a white-box in 1994. At the time I felt that it was a better deal because I knew that I could go to someone locally and raise hell if I had any issues. At the time, the white-box builders were really the only people who were doing the "build to order" thing as well.

      At the time the price and warranty were pretty comparable to the big brands. I imagine that the terms are comparable today. But the benefit of a Big Three (or is it Big Two now?) warranty is that it is often times an onsite warranty, which can be very much convenient. As far as component quality...well...it can be hit or miss. The key is finding a reliable screwdriver shop. The real issue is that it's hard to compete with the economy of scale that Dell or HPaq have, so usually the "pre-packaged" options from the local shop will be using less expensive components. Usually integrated motherboards with lower performing parts but sometimes they will be just plain substandard (PC Chips, anyone?). As long as you know what you are buying from a local shop, there shouldn't be much of an issue there.

      As far as my recommendation, it depends. If you don't have a lot of computer knowledge or experience, I'd say go with one of the Big Three. They usually have different offerings tailored exactly to your needs (i.e., software bundles targetted at kids, home finances, etc). Most white-boxes don't come with any software besides the OS.

      The Big Three also tend to be much better at supporting clueless newbie types. Plus, most of them offer 24/7 support lines while with a screwdriver shop you're usually left with the 9-5 guys. Also, for the less experienced it's usually better to have the onsite warranty than to drag your system in. Unplugging components tends to freak them out.

      Some people say that the expandability of having a standard white-box PC will beat having non-standard components when it's time to upgrade. This is true, but only if you a) intend to upgrade at some point and b) have the knowledge to do it. Don't even get a newbie started on upgrading the processor or system board.

      That being said, if you are a computer literate and you know what you want, and you know that you can largely support yourself, and you trust the shop then go white-box.
    • Just as a note, I've had some very good and very bad experiences with White Box systems, although I'd never buy a pre-fab machine despite the bad. The ability to pick what goes in is more than worth it. However, it's all about where you get it from.

      Personally, the biggest mistake I ever made was to buy a custom box from CompuSmart (for all of you Canadians out there). They originally were good on price but the system was a nightmare. The power supply was wrong for my Thunderbird 800, and consequently burned out the motherboard and processor. Of course, this was only on the fifth trip into the shop that they discovered this. Unfortunately, all my parts were on warranty there. They kept telling me it was either the RAM had slipped out or that it was somehow my fault that the system wouldn't boot. Then, they took an agonizing four weeks to get a replacement motherboard (and wrote nasty messages into their in-store computer system about me when I kept coming in and checking up on it (yeah, I saw those messages, Jerks)). Finally, once the four weeks were up, I took it home and couldn't get the network card to work, combined with the machine sporadically restarting and giving me registry errors. Another trip to tech support and they diagnosed that the processor was screwed (way to check that out the first time, guys). Another SEVEN WEEKS later, I got my new processor. Luckily I got a replacement/loaner or I would have snapped. Then they tried to tell me that it was my fault that the network card didn't work, despite the fact that it had been sitting on THEIR DESK for the four weeks that the motherboard was out they were the only ones who touched it during that time. Only a fresh reformat fixed the problem.

      At this point, I swore never to buy from them again. When the SAME PROBLEM came back two months later, I took it to another local small-time business who diagnosed it correctly and fixed the power supply in three days. I will definitely be buying my next system from them (PC-Place (the small-time shop in Saskatoon, Sk)).

      So as a lesson, white box is the way to go, make sure you know who's building your computer, and NEVER BUY FROM COMPUSMART!
    • Re:Im surpized (Score:2, Insightful)

      by LadyJessica ( 583659 )

      I got my last two computers from a local shop less than two miles from my apartment. They're called GamePC [gamepc.com] and they're great.

      They had a wide range of high-quality components so I could choose my own motherboard and case and stuff. They also burned it in for 48 hours and gave me a good warranty. I also got custom restore discs plus regular Windows CDs. They'll also install RedHat Linux if you want.

      My next computer will be from them also. They're not dirt cheap, but high-quality and I don't have to cut myself up trying to put together my own system. :-)

      I also like the idea of supporting a local small business.

    • Yes. I've got a white box. Bought it 2 1/2 years ago. Had to replace the HD, but I don't think the shop can be blamed for that. The shop I got mine from is Spectrum Peripherals in San Francisco.

      While I'm happy with the company and the service (had to take the computer in once), next time I'd spend a few more dollars and buy from a small shop local to me... where taking it in for service is a lot less work.

      I got a good deal on an OK computer. If I'd been able to afford great, they would have been happy to sell it to me. I'm satisfied, and any of you readers who live around SF could do far worse than to check them out yourself.

  • by Anonymous Coward

    when this article talked about "white box" makers, i thought they were talking about dtmf tone boxes:

    http://www.kontek.net/pi/boxes/white.gz

    makes me feel old.
  • by Anonymous Coward
    'pooter bidness
    No huge surprizes

    What's with this new ghetto Slashdot?

    I think this story takes the cake for worst spelling. And it's not even by Taco. :)

  • 45% of the machines sold do not come with windows
    unless the buyer actually wants to pay for it.
    • If you're buying Windoze, you get either the OEM version or the full retail box... (plus driver disks), NOT the "disk recovery image" provided with name brand computers. If the shop you buy from won't provide this, buy with no OS or buy somewhere else.

      Much nicer if you decide to upgrade or otherwise change hardware.

  • ... considering that I can build a machine that easily ties and/or outperforms a Dell and has better components for several hundred ($CAN) less than a Dell. A few months ago I couldn't beat them on low end systems, but now I can by the above margin. The margin increases as the performance goes up (I heart Athlons).
    It's quite easy to see that small local stores can easily out price the big boys right now, and at the same time make a tidy profit too.
  • And ... So? (Score:3, Insightful)

    by Scotch Game ( 442068 ) on Sunday June 23, 2002 @02:04PM (#3753091)
    This article is interesting in that it talks about "... surging white box volume" and the industry taken as an aggregate -- because Plexus' stated 150 units by themselves aren't going to impress anyone but Plexus -- is an ever-more-important market for components manufacturers and for customers in the position to consider alternatives.

    But I don't think anyone really ever disagreed with his final point: "The lesson: Publicly traded companies are not the whole computer industry, and the publicly traded stock market is not the whole economy." Was this ever a source of controversy?

    The reason Dell and Gateway and large manufacturers are so important have to do with the support contracts they offer, the shipping options, the warranties, the phone support, the willingness and ability to ship next-day in the event of component failure: In short, the security blanket that makes department managers at large companies feel comfortable purchasing those systems.

    Now we could argue back and forth about how you know some guy that purchases systems all the time from Little White Box Manufacturer and they're great and cheaper and you don't know why everybody doesn't do it, and that makes sense because to the Slashdot community those white boxes are very, very important. For many of us it's our job and for the rest if it isn't directly our job then it's an important facet. But for the typical purchasing manager the irony is that they are just white boxes. If he feels he can *safely* cut costs he might, but he will check on the support features and he might not want to be bothered with long term concerns about equipment. Not that small manufacturers don't have excellent support. But he doesn't know them and here enters the important issue of brand value, identity, and leverage.

    Not to mention that the Dells and Gateways can, in fact, ship in the hundreds of units per day, manufacture in the thousands per week and purchase components in the billions of dollars per year. That's why they're important and has that really ever been a mystery?

    This reporter got a good story and then took the wrong angle.
    • Re:And ... So? (Score:5, Insightful)

      by marxmarv ( 30295 ) on Sunday June 23, 2002 @03:19PM (#3753338) Homepage
      But I don't think anyone really ever disagreed with his final point: "The lesson: Publicly traded companies are not the whole computer industry, and the publicly traded stock market is not the whole economy." Was this ever a source of controversy?
      This article wasn't published in a trade publication, but in a daily newspaper. Most often the business press wants to hide facts like this from the average Joe, and it's good to see reminders of that in print every now and again so I don't get the urge to fsck myself with another salaried job.

      The reason Dell and Gateway and large manufacturers are so important have to do with the support contracts they offer,
      White box firms can roll almost instantaneously and often have parts and systems in stock.
      the shipping options,
      See above.
      the warranties,
      See above.
      the phone support,
      Ah, here's a possible failing of the small retailer. The phone support is often relatively weak -- but phone support is pretty much a non-issue when you have minimally sharp desktop people of your own on hand (which you do, if you're a large company).
      the willingness and ability to ship next-day in the event of component failure
      White box companies can roll almost instantaneously and often have parts and systems in stock.
      In short, the security blanket that makes department managers at large companies feel comfortable purchasing those systems.
      Corporations are best known for swallowing their own bullshit. It's the same reason COTS software is so prevalent in large organizations, the same reason schmucks pay six and seven figures for crap like Vignette or BroadVision or Dynamo: they want someone they think they can blame, even if they can't.
      But [the typical purchasing manager] doesn't know them and here enters the important issue of brand value, identity, and leverage.
      Better the devil you do know than the devil that lives entirely in one's mind? It's just another excellent example of the corporation swallowing its own bullshit. I once had a manager describe in hushed tones the Aura of the Brand, of how a brand represents an experience, much like how an infant saying "ma-ma" /* FIXME needs localization */ results in the goddess figure of its life appearing.

      Except when it doesn't.

      Ladies and gentlemen, we have put the economy and our very lives in the hands of imaginary colossal infants, and THEY NEED SPANKED.

      Not to mention that the Dells and Gateways can, in fact, ship in the hundreds of units per day, manufacture in the thousands per week and purchase components in the billions of dollars per year. That's why they're important and has that really ever been a mystery?
      And this is important why? This is worth paying extra and getting depersonalized service to who? White-box builders are no less capable of shipping hundreds of barebones systems per day, to order. Dell and Compaq both OEM their finished notebooks from an outfit called Compal [compal.com]. They're not a contract manufacturer, but a turnkey solution for notebook design and manufacturing.

      This is what several companies do for the white box market.

      This reporter got a good story and then took the wrong angle.
      For PHBs and others invested in the worldwide corporate circle-jerk, perhaps. As it is, it's a testament to partial decentralization.

      -jhp

    • This article is interesting in that it talks about "... surging white box volume" and the industry taken as an aggregate -- because Plexus' stated 150 units by themselves aren't going to impress anyone but Plexus -- is an ever-more-important market for components manufacturers and for customers in the position to consider alternatives.

      Do Plexus's 150 computers represent evidence of the economy strengthening when you guesstimate the profit they earned? Margins are low for the white-box builders. What is the gross profit on your $600 computer? $100 maybe? And they built 150? That is only $15K.

  • ... "Two gigabytes of processing speed".. ???

    I stopped reading at this point!
  • This isn't an article. It's more of an ad that resembles an article. Why?

    They take 1 example from some defence contracter. So what. The next thing they praise themselves doing is making computers cheaper than what the big boys sell. You either buy parts and assemble it yourself or buy buy service and parts from big comp store. That works out as follows:
    parts(cost) + your time(no cost) = parts(cost) + their time(cost)

    No big secret. Now my big question: How is this news? Please respond Timothy. I'm sure you've made a computer from parts and noticed how it was monetarially cheaper and better in quality than the big boys do (your time is another matter).

    And no I'm not trying to be flamebait to the slashdot article. Slashdot just is a reprinter, like all news sites do (most via Reuters or the (dis)associated press). I am amased how this crap of an article(at sunspot) got through the reporters.
  • Hard to swallow. (Score:2, Interesting)

    by jag164 ( 309858 )
    45% custom built. That number to me is a bit hard to chew. Yeah, most geeks are going to build there own systems and even build them for their friends. I used to to this but gave up b/c I became tech support and started to lose my social life so I quit. Now I've got a Dell sitting on my desk, a POS compaq as my token winbox and a franken-clone as my wall to the outside world.

    Now back to that 45% number, go into your friends houses, or better yet friends of your kids; go into virtually any business that employs more than 100+ people and you'll see a plethora of Dells and IBMs. Besides one friend of mine and the one sitting on my floor, I have not seen a custom built machine out in the wild for 4+ years.

    Disclaimer: I don't hang out with too many true geeks
    • Out of 11 Intel based computers in my apartment, the only name brands are one Gateway server that I bought for $499 during a $400 off promotion and a HP laptop. All the rest are homebuilt. I don't hang out with any other true geeks, but my roommate and I are sys admins.
    • If I go to the majority of my friends' houses, I see one or two computers they built themselves, and maybe a Dell their family bought after they left home for school. If I go to my family's houses, about half the time I see computers built by myself or another of the few nerds in my family. If I go into my company, which employs about 1000 people (~800 at my location), and produces a product that the vast majority of nerds have used or at least heard of (though I'm not going to say which), every desktop box, running either windows or linux, has been built at a local white box retailer. Many offices have two or three of these (each with a different OS). The only non-custom boxes in the company are Suns, SGIs, Apples, and HPs (running HPUX, so not the ones you find in stores).

      Just because you don't know any nerds and don't frequent the right companies doesn't mean they don't exist.
    • Our company has 120 employees, and we build and maintain our own computers. It takes about 20-30% of the time of one of the IT guys to handle building and maintaining systems.

      Scaling that up, one full time IT guy could manage building, upgrading, and supporting at least 300 systems. It's a hell of a lot cheaper, and more efficient than buying packaged systems. Even compared with next day onsite contracts, we can have a system back up in a matter of hours, keeping just a couple spares of each part in stock.

      You'd also have to consider, even if you bought some huge contract from Dell, you will need some sort of in-house support for trivial problems and for custom apps. Having your employees call Dell directly for support is inefficient, as they have to walk them through the problem over the phone, when your in house guy can come to your desk and resolve the problem in a matter of seconds usually.

      Anyway, I'd venture to bet there are a lot of mid-sized companies with 100-300 employees that do the same thing we do. I see want ads for technicians that imply they do also.
    • Not where I live. Not a single person I know bought from Del, IBM, etc. unless it's a notebook. Everyone owns machines built for them in local independant shops, with a spattering of Macs here and there.

      At work the corporate standard for a desktop is Compaq, but I refuse to buy them for the proprietary software we run. I don't know if Dell and IBM are similar, but the extra "features" such as bios control on the drive instead of a chip and what appear to be custom cuts of the OS with reams of useless junk almost assures the apps will break on a Compaq.

    • Besides one friend of mine and the one sitting on my floor, I have not seen a custom built machine out in the wild for 4+ years.

      That's largely a matter of your environment. Three of my five systems are custom built (of the others one is a laptop and the other I bought from work for $25). Two of my parents three computers are custom (the third I bought for them from work for $25). Out of the dozen or so friends that I have (most of which have multiple PCs) I only know of three non-custom systems. One of those is a laptop, one of them is another $25 "special" from work that I gave him for a firewall (that he uses with his 3 custom boxes), and the third is a Mac.

      Outside of laptops and Macs, the only non-customs I see outside of work are ones that I bought from work on the cheap.
    • Last fall, ComputerUser magazine published a Gartner Group study on where all PCs sold presently come from. As best I can reproduce the numbers from memory (but this is real close):

      44% clones (white box/local shop)
      23% Dell
      18% Compaq
      7% Gateway
      6% HP
      2% others

      Clones were holding steady, Dell was growing, all other OEMs were losing market share (down by an average of 20% or so from the previous year).

      Doubt all you like, but the numbers are real, and are dead-on with what I see in Los Angeles.

    • BTW just for S&G I counted all the complete, working systems in my house, and of 14 live computers, 12 are clones. (Plus there are enough odd parts to build 8-10 more.) My OEMs are a 14+ year old PS/2 and an 8 year old Packard Bell. Also, of my regular SOHO clients, only three have OEM systems (two EMachines and one HP).

  • From the article:
    Plexus built 20 machines, each with 2 gigabytes of processing speed

    Can somebody explain to me what 2 GB of processing speed is?

  • Interesting... (Score:1, Interesting)

    by Anonymous Coward
    Interestingly, if Microsoft Windows comes on almost all OEMs (~50%) of the market, then what happens with the rest? Can you validly argue that
    reason of Microsoft's (supposed) monopoly is
    OEM equipemnt with Windows?
  • With http://www.pricewatch.com/ out there to help folks find the best deal on a Whitebox, pricing has even become competitive in that field. Having had a number of folks who look to me to help them find a good deal on a PC, I've done lots of shopping and talking to people. I would suggest that it comes down to a couple of things.

    1.) How much can you spend?
    2.) Avoid such and so, who have bad track records.
    3.) Does the local shop/whitebox builder have good support, if we have a problem?

    If you get #3, and they don't use questionable hardware, then usually the'll have a fair price. Anywho..just my $0.02.. (which is probably only worth a red cent.)
    • I find using pricewatch and then going to a local shop (where you are likely to get better support than buying from xyz out on the west coast or something), and tell them how much I *could* get it for, then they will go down to around that price and I end up with a fairly good deal.

      It's all nice to have a place like MicroX-press in the area where you can buy stuff and pick it up at their warehouse instead of paying shipping.
  • Speed!! (Score:4, Funny)

    by jag164 ( 309858 ) on Sunday June 23, 2002 @02:16PM (#3753142)
    2 gigabytes of processing speed

    This is not a typo. It's a new technology. Humans have had speed for a while. Take some and it's speeds up the heart rate and some other things.

    CPU's are now taking advantage of digital speed. These new white boxes have 2 GB of processing speed. You just need to set up a cron job to realease a couple bytes of speed into the CPU every few hours. It'll give it a wonder boost in processing power. Be careful, give the CPU too much at once though and you'll fry it.
  • by Anonymous Coward
    In the past year I have worked for a university's help desk and I see plenty of white boxed computers. Most of the white boxed computers I have seen however suck ass. Usually people (at least students) by the cheapest POS they can find, so those types of computers tend to have a lot of problems.

    Personally I have never owned a big name brand computer (except for a 386 sx16 from IBM, but, well it wasn't really mine it was the family computer) since I was 12 I have built my own computers. I find that by building my own PC I get several benefits a) quality components b) upgradability c) lower cost.

    Not all white boxed computers are shitty however. Before working for the University I worked for a small computer chain (well, if you consider 7 stores small). If the customer was willing to pay for a nice system, they would get an extremely nice system. Nicer than anything that has ever come from dell/compaq/gateway/IBM. The company I worked for built computers just as nicely as I did for my home computer(s).

  • by dpbsmith ( 263124 ) on Sunday June 23, 2002 @02:38PM (#3753205) Homepage
    ... well, maybe not always, and 45% is even higher than it used to be, but I remember in the early nineties a study showed that at that time screwdriver shops accounted for 30% of all PC's, making them collectively bigger than any single computer company.

    This is a systemic problem with the trade press, which has blinkers in a number of ways. Some are related to who buys advertising (Dell was a slightly iffy outfit back in the days when they called themselves PCs Limited; they basically bought their way into respectibility via advertising). Some are related to the mystique of bigness (reporters would rather rub shoulders with a captain of industry than with a little storefront operator).

    I live in a town of 40,000. It has about three screwdriver shops within the town itself. The closest other places where you can buy computers are: one Staples within the town; an OfficeMax nearby; and a number of electronics retailers nearby (Best Buy, Circuit City, some department stores).

    ALL the screwdriver shops have been in business, same location, same management, for over ten years. Common sense says they must be reasonably successful, and a reasonable important element in local computer sales.

    (And, no, I don't work for any of them--and, as a Mac user, I've never bought from any of them...)
    • I know a fair number of "screwdriver shops" in the Baltimore area that do perfectly well. One of my best friends owns one, and he makes his living supplying high-end custom servers to academic institutions and government agencies.

      Interestingly, 95% of what Joe sells runs Linux. If we saw accurate stats from all the small boxbuilders like Joe, I suspect we'd see a lot higher percentage of Linux use than we see in most popular surveys and analysts' reports.

      Joe has never been featured in the Baltimore Sun, a newspaper that has gone downhill to an alarming degree in recent years (I used to write freelance op-ed for them, but now I don't even bother to submit any). I must admit that I am surprised and glad to see an article in the paper's business section that goes beyond the basic "rewrite the big company press release" level.

      Daily journalism -- especially newspaper business journalism -- in this country is in sad shape. Maybe someday I'll get tired of the online rat race and apply to a small daily or two, but chances are they'd turn me down. The newspaper business is not only contracting, but is becoming increasingly insular.

      Isn't it sad that an article like this is rare enough to deserve a Slashdot mention? Not that anyone in the newspaper business is ever going to listen to me (sigh).

      - Robin

  • It's really the same thing as Open Source, stated in hardware.
    If you've the time/interest/skill to cook from scratch, you may well save time and money.
    Then again, the lack of professional integration might wipe out whatever savings you thought you were going to realize...

    I priced out two boxes, a DB and a web server, something like 1GB Athlons with 1GB ram and suitable drives, with supporting cast, at ~1,500.
    Running Linux, I think I'll be set for graduate studies.
    Can't say I'd take the same path with mission-critical stuff, e.g. the billing system at my vapor-ware outfit...
  • My computer 6 months ago consisted of an AMD-K6 300 processor, 64MB of SD-RAM, AWE 64 sound, an ATI 3D Rage Pro 4MB and the rest of the usual suspects (CD/Floppy/etc).... now it consists of an AMD-K6 300, 256MB of SD-RAM, AWE 64 sound, and a Hercules Prophet 4000XT 32MB gfx card. Have you got it yet? **Upgrade as you can afford it** Owning a "white box" has brought the greatest amount of computing pleasure and none of the headache's that a pre-built Compaq clone would. Now on to the OS ::cough:: =o)
  • A dubious lesson (Score:2, Insightful)

    by NFNNMIDATA ( 449069 )
    The fact that white boxes are at 45% would seem to me to indicate that the PC market is indeed in the toilet, as they should probably be less than 20% in a healthy market. They aren't doing more business, they are just doing a bigger percentage because the industry's total volume has shrunk.
  • by Animats ( 122034 ) on Sunday June 23, 2002 @03:03PM (#3753297) Homepage
    Many small business buy from those little shops because they'll come over, set up your LAN, wire everything up, install the software, and leave the customer with a working office system. If the stuff breaks, there's someone nearby who has the parts.

    If you want five PCs for your plumbing supply company, that looks like a good deal. Buying your own machines at Costco means figuring out how PCs work, which is a distraction from plumbing.

    • by Roblimo ( 357 ) on Sunday June 23, 2002 @07:20PM (#3754335) Homepage Journal
      Not only that, but the ability to run a broken box over to a local shop and have it fixed *while you wait* if it's an emergency is something only a local business can provide. It's also nice to deal with a human being instead of some crappy voice mail system that runs you through five layers of menus before you get to someone who can actually solve your problem.

      There is a huge market for local systems integrators that serve other small local businesses. This is, BTW, the way Linux *should* be sold, but not many "Linux vendors" seem to have caught on to this.

      If you had a small business, which would you rather do:

      1) Call faceless operator at GiantComputerCo with a customer number.

      2) Call your computer-hip Chamber of Commerce buddy Al at LocalCompouterCompany, who knows your name, your favorite brand of beer, and your opinion about the Orioles' chances in the playoffs this year?

      I have more faith in Al, who I run into at the local bar all the time, than I will ever have in HPDellIBMGatewayCostcoBigCompany. I know where Al lives, he knows where I live. He is going to do his best to keep my computers working because I am important to him. Michael Dell and Carly Fiorina could care less about me. This makes a difference.

      Maybe I'm just old-fashioned, but when I buy anything critical to my business, I like to deal with people I know, who know me too.

      I'm a Slashdot editor and possibly one of the 10 or 20 most widely-read tech/IT journalists in the world, and emails I sent to several major laptop manufacturers over a week ago still have not been answered. But when I call my local buddies in the computer business, the Slashdot thing and all the tech journo hotshotness mean nothing. They respond to me quickly and politely, same as they respond to everyone else.

      I am a major small business believer and booster because I have always gotten better and more reponsive server from local small businesses. Small businesses don't need to buy CRM [Customer Relationship Management] software. The good ones have CRM *wetware* and the bad ones go broke.

      Not that I'm against big business or anything, or that I invented the OSDN self-serve ad system [osdn.com] specifically to give small businesses a chance to compete head to head with big ones online or anything....

      - Robin

      • It's also nice to deal with a human being instead of some crappy voice mail system that runs you through five layers of menus before you get to someone who can actually solve your problem.

        Exactly! I'd also like to point out the relationship you build with your local computer shop is incredibly important. YOu can't put a price on the benefit of an established, trusting relationship between you and a local computer shop run by hard working, decent folks. In my case, when I get a part that doesn't work, I just take it back to my local shop and tell them. They hand me a replacement, apologize for my inconvienience, and I'm out the door. Try that with a Dell or HP.

        "Sir, I need you to restore the software to the same state it was in when you receieved your PC from us..."

        The local shop knows me, I know them, and we both know that each other knows what they're doing. That's why I buy locally and build my own. This relationship is something you can't put a price on.
      • I'm a Slashdot editor and possibly one of the 10 or 20 most widely-read tech/IT journalists in the world

        I hope you're not seriously referring to /. as journalism...

    • By making custom machines, local integrators do not have to lock themselves into those mass quantity deals that they need in order to make sure their huge volume stays consistent. This lets them pick and choose what's cheaper today, while Dell and the other big computer makers are stuck taking shipments from their long term contracts. Only if there comes to be a parts shortage will the situation reverse.

      As for the service part, the one thing you left out is that when the local integrator does send a tech out for on-site service, it's more often the very same guy who therefore knows more about the problem history the customer might be having, and won't start over from the beginning every time like you'd get if Dell sends a different sub-contracted tech out each time.

      Also, if the problem is due to some incompatible piece of hardware, the local integrator is much more free to use some different brand or model of part to replace it and get things working, while the sub-contracted tech from Dell has to stick with the Dell brand products (so the next tech will understand it).

  • Pluses and minuses (Score:2, Informative)

    by GammaStorm ( 221702 )
    For a reasonably brave person, building your own system is certainly the way to go. Compaq has come a long way in business models away from the proprietary format but its home models will probably stay the same, especially since being acquired.

    Now for larger scale installs, I stay away from the white boxes for one single reason: different hardware. Time and time again I've seen orders filled that all have different hardware even though it was asked of them to use *exactly* the same in each machine. This creates a nightmare when you are trying to clone a large number of machines for things like labs, or even in a large scale deployment in an office. While drive space is cheap enough to store different images, it still takes unnecessary time to prep all those different configs.

    The other upside to buying business class computers for large organizations is getting replacement parts pretty quick. I deal with Compaq a lot and their turn around time is less than 24 hours on parts ordered by a certain time. Plus I don't have to go through hoops for them, we order then all online. No phone time with a tech or anything. I'm sure there are a few white box vendors out there with good support like that, but I doubt its a high percentage.
  • by InodoroPereyra ( 514794 ) on Sunday June 23, 2002 @03:13PM (#3753321)
    The is really good:
    • It implies more competition, better wealth distribution, and less likelyhood of a vendor-level monopoly (than it would be in case big vendors dominated the market)
    • M$ Tax: M$ bullies the big vendors, and forces them to sell Windows-only PCs. But they cannot go after the thousands of small, independent vendors. Half percent of the US market is out of their monopolic hands in this sense.
    • I bet the numbers are even more favorable to white-box vendors in the rest of the world. At least my feeling is that in poorer countries most of the PC sells are white-box type.
    • Actually, they do go after the small guys- just not maliciously- I have a friend who runs a small computer company [runtimecc.com] and he's told me hows he's gone to some Microsoft conferences, and they loaded him and other small companies up with goodies (including 10 or so free XP licenses, he can do as he wishes with them), and gave them the tools to do automated setups (He still had to program a lot of it himself, but he's a frickin' genius anyway). We've talked about this stuff alot, and he never said anything about restrictive licenses-he does sell other OS's.

      Incidentally, check them out if you need parts- they don't pull any creative bullshit with shipping charges, test everything in house, and have a good return policy. Plus the prices are good.
      Yeah, he's my best friend. So call me biased.
    • "I bet the numbers are even more favorable to white-box vendors in the rest of the world. At least my feeling is that in poorer countries most of the PC sells are white-box type."


      In my biased opinion (I'm from "rest of the world" ;-) ) I can only agree. There are fewer customers ready to pay much more just to have PC from big US vendor. Major local vendors still take smaller profit margin; local white box vendors are even cheaper. With possibility of purchasing components from warehouses importing them directly from manufacturers (mostly in US, Taiwan and China) systems some twice or more cheaper that brand system with same configuration.

      The importance of service is also altered here - service of big vendors may be not as great and fast as in US, sometimes you have to wait quite long for servicing stuff. Besides, I had never any problems with return policy with small vendors e.g. at "PC components flee market" (Yes, there are some in some parts of the world); and I had some with big market players.

      So in my region main customers for boxes from large vendors are large international companies that want to keep standard throughout the world; and perhaps some nouveu-rich. Other customers would rather pay less and have better service....
      What's more: usually in my country you have to wait ca. 3 weeks for delivery of hardware from Compaq, HP etc.; white boxes come much sooner.

  • by fidget42 ( 538823 ) on Sunday June 23, 2002 @03:30PM (#3753367)
    that both Dell and Gateway started out as "White Box" system builders. I wonder at which point they became important enough to be counted?
    • And look what happened!

      I remember 2-3 years ago when Dell was a highly reputable brand, and a great white-box, CUSTOM PC company. So was gateway (even earlier. does anybody remember their old, huge 486 series pcs?).

      Each built PCs custom, by hand. They used good parts, sold direct, and gave the savings to the consumer. They used whatever parts gave the best performance or the biggest bang for the buck.

      Now that they're on top, their brand sells itself. They get lazy. They cut corners. They took more profit, they made deals with large-name suppliers (Intel and Dell - while some would argue that Intel beats AMD, AMD certainly has more competitive pricing). Their brand sells itself for a few years. After that, their laziness catches up to them and they decline (compaq did this, IBM did this with their Aptiva line, Dell is about to do this, Gateway is on the virge of doing it (if they already haven't). If anybody's studied the Chinese Dynastic cycle, you know exactly what I'm talking about (if not, you can safely ignore that sentence).

      Right now, I would tell my friends to buy a White-Box PC. None listen. They buy a dell, they have a horiffic experience with it, but figure it must be a coincidence since they ARE #1. If they buy a White-Box PC and have an incident, they blame it on the manufacturer, and assume that every PC has serious issues and never buy from the brand again, and tell their friends (while it may be true, 95% of the time, it isn't. companies can't' stay in business if all their products are crappy (yes... even microsoft). Eventually you arrive at the point when one asks themself what IS a good Big-Name PC? I'd tend to reccomend Micron or IBM - they both seem to be big enough to throw the support of a multi-million dollar company behind their products, and offer quality PCs and support.

      Of course, look at Apple. Most people get 5+ years of use out of a Mac. Most PCs last for 3. Honestly, I like Macs quite a bit. The only problem is that apple no longer allows the mac clones (which did hurt apples business A LOT, and would hurt apple's business model if allowed to continue (ie. universal standardization, etc)). Either way, Apple makes great computers which commonly outlast their PC counterparts. I know of SEVERAL Apple ][s that are still used DAILY.

      Dude, you're gittin a dell!
  • News from overseas (Score:4, Interesting)

    by atomico ( 162710 ) <miguel.cardo@gmai[ ]om ['l.c' in gap]> on Sunday June 23, 2002 @04:20PM (#3753520) Homepage
    In my country (South-Western Europe), you will only find brand PCs in government or big corporation offices. At universities, schools, small businesses , homes, everywhere else you will just see white boxes, apart from the odd Macintosh. Even in the laptop segment unknown brands are quickly gaining marketshare.

    The reason is quite clear: big brands use different pricing strategies outside the US, they usually are much more expensive, while 'white box' makers go shop their components directly from Taiwan and pass on the savings to the customers. I am pretty sure big names have given up the home and educational markets here.

    So this 45% mentioned in the article seems quite believable from here, the figure seems to me even low!

  • by selan ( 234261 ) on Sunday June 23, 2002 @07:17PM (#3754312) Journal
    Okay, now that we've all gotten the "2GB" jokes out of our system, let's not beat up the author too much. This is a column in the business section, not a tech article. We all know the difference between column and article. The dude's an accountant, not a techie. Lay off!

    <asbestos suit/>

  • Lessons Learned (Score:2, Informative)

    by toaztke ( 566886 )
    I "was" the proud owner of a Dell pc. Then my graphics card went bad. Happens right? SO, upon trying to replace it, by way of freak accident, my mother board fried. No biggy, I went out and bought a brand new one. And, since I was buying a new board I figured why not upgrade to a better one? So I did. Then I went to put it back in. As it turns out, the power switch and the power supply were both proprietary. I had to buy a new case and new power supply to accompany my new motherboard. Next computer I get I'm building myself. I would suggest that the average user go to the small timer who builds their machines using all standard parts. Then upgrades are possible without paying through the eyes for the proprietary part. My new motherboard is twice what the old one was, at half the cost (and the replacement Dell was refurbished too). I used to be a Dell fan...

A sine curve goes off to infinity, or at least the end of the blackboard. -- Prof. Steiner

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