Blog Central
Keep up to date...
Read blogs submitted by our partners, customers, and vendors.
Recommend this article to a friend
Subscribe to the newsletter
RSS Feed
Print
White Box versus Big Vendor
At the time, no one could have predicted what reverse engineering the BIOS of the original IBM PC would produce a quarter century later. The resulting revolution put more computing power in our pockets today than was in the giant mainframes of the world's largest companies at the time. Today, commoditization lowers prices for ever-increasing computer power and drives development of new features and products that seem to consume new resources as fast as they can be deployed. Smaller Tier 2, or “white box,” vendors now have access to the same hardware as large vendors and customers have more choice to find the right source at the right price with the right features and support.
But, while white box vendors are often first-to-market with the latest CPUs, memory and drives, a more efficient assembly-line approach allows larger Tier 1 vendors economies of scale. Customization can be expensive and large vendors usually spend more time selecting and certifying components and, in the interest of managing support costs, actually sell fewer supported configurations. If an order is big enough, customization from a large vendor is possible but often comes at a premium.
A key differentiator for white box vendors is reduced time to market for new technologies like faster CPUs, larger drives, and greater amounts of memory. For the most part, larger Tier 1 vendors accept this because their service, support, and certified whole-system integration are compelling enough to capture enterprises. These customers know that buying inexpensive but less reliable and untested hardware can actually be more expensive long term. Replacing hard drives, faulty motherboards, or CPUs fried by failing fans costs more in lost time and computing power than is gained by buying the latest and greatest hardware.
Hardware failures are one of the most expensive aspects of maintaining a data center. The speed at which white box vendors can integrate new hardware into their products often means less time certifying and testing than their larger Tier 1 competitors. While there may be no systemic problems, discovering that a new rack of servers contains hard drives from the same batch—one with a six-month lifespan—is always a painful lesson. True, some white box integrators do some integration testing, yet failures still happen and not all white box vendors offer local on-site support. And few, if any, offer global support.
The opportunity cost of a down system can make support packages offered by Tier 1 vendors more compelling and save revenue. If a white-box vendor doesn't have a service center in the area, a time-consuming shipping process is required just to get a diagnosis.
As the market gets increasingly competitive, advantages of Tier 2 white box vendors will erode and, eventually, disappear. As larger Tier 1's offer innovative technologies at better prices with more sophisticated response and support, white box providers simply won't be able to keep up. Eventually, they'll become a casualty caught between basic economies of scale and the ongoing computing revolution. A quarter century ago, no one could have predicted the effects reverse engineering the BIOS of the original IBM PC would have not just on computing technology, but the market dynamics that provide it.
Recommend this article 
Subscribe 
RSS Feed 
Print
As information technology integrates further into our lives and companies continue to expand their global presence, the importance of VoIP will dramatically increase.
In breaking down barriers to communication and productivity, Unified Communications solutions are accelerating rapidly.
IT in 2008: In an economy showing signs of fragility, integrating and maintaining the right—and the right amount of—information technology will require more planning and focus.
