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'White Box' Makers Take Up The Slack
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.
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.
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?
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.
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?
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
remember, no matter where you go, there you are
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.
photosMy Photostream
No huge surprizes here.
/. 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?
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
... 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.
My other sig is funny!
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.
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
Plexus built 20 machines, each with 2 gigabytes of processing speed
Can somebody explain to me what 2 GB of processing speed is?
Enigma
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.)
Awk! Pieces of eight. Pieces of eight. Pieces of seven... ERROR: General Protection Fault. [Paroty Error.]
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.
Damn, most pierced, painted goths have better taste in beer. Pass me a bud, and I'll install Windows 2.0 on your system.
Or, did you mean the *other* kind of bud?
Cheers
-b
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.
... 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...)
"How to Do Nothing," kids activities, back in print!
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.
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...
Get thee glass eyes, and, like a scurvy politician, seem to see things thou dost not.--King Lear
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
/. -- the Free Republic of technology.
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)
[JJ]
"Insert Dead Smart n Clever Sig Here So I Look Brainy"
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.
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.
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.
that both Dell and Gateway started out as "White Box" system builders. I wonder at which point they became important enough to be counted?
The dogcow says "Moof!"
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?
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!
This was exactly the situation ten years ago when the first wave of personal computer purchases was dying down and everybody had the DOS machines they needed
Yeah, and PC sales were in the toliet for 5 years or more.
Then Windows came along and shortly thereafter the net entered the public conscioussness and there was a real reason to upgrade
The number one reason for upgrading from the i386 era to the Penitum III 500Mhz era was Windows itself, with MS Office coming in at #2. It looks like that demon has actually been defeated. I really doubt we will ever again see software that universally makes almost everyone want to continually upgrade.
Instead, I see things going the other way -- cheaper, quieter, cooler, and smaller. Imagine a little $100 box that you just toss into a cubical, connect a monitor to and go. You don't even know or care what the Ghz value is - it's in fine print in the back of the manual.
Business. Numbers. Money. People. Computer World.
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!
- Relativistic? That's barely Newtonian!
I would have to disagree. I just installed a GB of RAM in a Dimension 4400 which we just got at work. The thing is a piece of work. The case is a blatant rip of the Apple minitower (blue-and-white, graphite, quicksilver) and folds out just like that beauty. The cables are mostly routed under the motherboard rather than out and in the way. It is a class act all around. I was very impressed by it. You can't run it open like you can a Mac, though.
s /u pgrade3_01_01.asp .
However, there is one fly in the ointment: their mobos and power supplies are proprietary. Here's the skinny on the power supply:
http://www.upgradingandrepairingpcs.com/article
I can also complain about another thing: price. You can still save money with White Boxen. Dell's cheapest refurbs are still in the $600 - $700 ballpark. However, if your boss is a "let's spend a little more money to save a lot of time" kind of guy, he could do worse than going the Dell route.
Knowledge is power. Knowledge shared is power multiplied.
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
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
-- 73 de KG2V For the Children - RKBA! "You are what you do when it counts" - the Masso
<asbestos suit/>
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.
~REZ~ #43301. Who'd fake being me anyway?
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).
~REZ~ #43301. Who'd fake being me anyway?
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
The Revolution Will Not Be Televised
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).
now we need to go OSS in diesel cars
Much nicer if you decide to upgrade or otherwise change hardware.
Tech Public Policy stuff
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.
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...
This is a backwards place but I don't feel like driving in reverse.