Custom Systems Rule Server Market

Custom-system builders are the king of both the PC server and Unix server markets in the channel, according to the latest CRN Monthly Solution Provider Survey.

Solution providers say unbranded systems remain their best-selling servers. Much of that growth came at the expense of Hewlett-Packard, which lost 7 percent and 10 percent of its share in the PC server and Unix server spaces, respectively, between April 2003 and April 2004, according to the survey, based on interviews with more than 300 solution providers.

White-box PC and Unix servers were the channel's best-selling brands in April, the second month in a row that custom systems finished at the top in those categories. In fact, custom-built Unix servers were reported as the best-selling line by 30 percent of VARs surveyed. That compared with 21 percent for IBM, 10 percent for Hewlett-Packard and 14 percent for Sun Microsystems.

The results, perhaps, are a testament to Advanced Micro Devices' and Intel's efforts to push their 64-bit processors into the white-box arena. But some system builders believe that as IT spending rebounds after a three-plus-year hiatus, customers see the channel providing a broader, more reliable lineup of products and services than before.

"We've been promoting the idea of white-box servers for the last five years," said Ted Roller, president of Oxford Systems Integration, a Troy, Ohio-based system builder and solution provider.After having seen Oxford Systems Integration provide quick, reliable service on the PC side, customers are now more open to engaging with the solution provider on the server end, Roller said. "What we're all seeing out there [in the server market] started with the level of consistency and capability with [custom-built] PCs. People are thinking more about the costs with PCs than with the features. That's carrying over to servers."

Other white-box players also say server activity is rising. "We're seeing quite a bit of new business each month," said John Llewellyn, marketing manager at Personal Computer Systems, a Knoxville, Tenn.-based system builder and solution provider that makes desktop PCs and servers. "We're starting to head more strongly into the corporate area, too."

Llewellyn said Personal Computer Systems is positioned strongly against branded computer vendors, in part, because it has also been providing a greater lineup of offerings along with the hardware, such as server management seminars and a nascent look into higher-end integration.

Besides detecting continued brisk business in the custom server field, the CRN survey found that the channel's optimism about overall IT spending remains at or near all-time highs. Overall, solution provider expectations for IT spending were virtually identical to the levels during the height of the dot-com boom in May 2000, with forecasts for notebook sales leading the way.

"The difference I've noticed between the last six months and now is that people are going out to buy something as opposed to thinking about buying," Roller said. "That is a great thing."*FOR THE FULL CRN MONTHLY TECHNOLOGY SPENDING OUTLOOK, CLICK HERE.