Ingram touts lifecycle PCs

Through a strategic initiative by Mississauga, Ont.-based Ingram Micro Canada, white box builders are finding it easier to offer customers a full 36-month PC lifecycle contract, where the customer can pay a monthly fee and receive brand-new systems in three years. In the past, these customers would have had to pay for the entire purchase price up front.Greg Tobin, senior director of sales for Ingram, said system builders couldn’t compete with Dell in leasing. Ingram has given them the same leasing and lifecycle contract tools along with trade-in credit.

Some system builders have tried lease, but they would have had to partner with a third-party finance company, which he claims would have been difficult because these companies would not know much about the white box business. “Ingram Micro knows what white box market is and we can do it,” he said.
Besides Dell, system builders are finding pressure from Acer, and Hewlett-Packard.
The market for system builders on the desktop side is drying up, according to Tobin. Citing an IDC Canada study, he said 43 per cent of all desktops shipped in 2003 were white box. In 2004, that number sharply declined to 36 per cent and last year it was in the mid-to-high 20s.
“Large OEM vendors have moved into this space and they are a strong threat,” he said.
The white box server market, however, is still lucrative, he added. “The server has some uniqueness and the system builder has a better chance for repeat sales with white box servers, especially if there is an embedded application with it.”
Currently, Ingram Micro is seeing between 200 and 300 per cent growth in white box servers. The distributor program in this area offers chassis, storage and motherboards.
Tobin also said that through this program the distributor has managed to cut the usual eight-week lead time to have products available to system builders in 48 hours.
Raymond Kwan, president of Amsdell Inc., a Markham, Ont.-based white box server maker, agreed that Ingram has improved its delivery of components. “In the past, Ingram Micro did not have enough stock, and you can’t wait four weeks for server components,” Kwan said.
He added that Ingram has also helped him compete against Dell, especially on Intel-based white servers.
“Dell could not provide the service (my customers) wanted,” Kwan said.
“Customers are smart and they can compare quality, service and price. And, price is not the No. 1 issue for the purchase,” he added.

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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