Brand Name vs. Beige
Up front, I want to say that there are many first-rate custom PC builders. In fact, the top system builders of last several years were purchased by Dell (Alienware PC) and Hewlett Packard (VooDoo PC) in 2006. Dell and HP did not buy these system builder companies for their low cost, high volume machines; they wanted to capture the high-end gaming and graphics systems that Alienware and VooDoo are known for by their customers.
The market for “high-end gamer” systems in hometown Iowa is not large, so a local computer business is going to sell mainstream computers. The question for the computer buyer is whether to go with custom built beige box systems or brand name machines like Hewlett Packard and IBM. For this article, I will concentrate on three primary arguments in favor of buying brand name PCs from technology professionals over custom built systems. The three reasons are local and manufacturer technical support, product quality assurance, and training costs.
Service, support and reliability are factors that make life long customers for computer resellers. Since computers and the components that make up PCs are commodity items, it is important to spend money on brand name PCs to ensure quality and consistency. Brand name vendors engineer solutions that a produced with a high degree of reliability, a solid supply chain, and support for driver downloads and forums to solve problems. A local reseller of brand name computer systems has resources and support from a team of people at the manufacturing and sales level that customer computer builders cannot easily match.
OEM computer builders will cite their machine’s speed advantage or the quality of components as reasons to buy their computer. However, most customer computer builders have trouble keeping a consistent set of machine specifications with similar hardware in production for more than a couple months. In order to keep a competitive edge, customer computer builders will change the components in their systems, often reducing reliability and stability of their systems.
Custom computer builders often make an argument saying, “People are feed up with the computer giant’s lack of service or support.” In reality, those computer buyers are buying basement bargain PCs from Wal-Mart, Best Buy, or direct from the manufacturer. However, if you think about it, people who buy $400 PCs should not expect much service from those computer giants. In order to compete, OEM computer system builders must provide value-added service and that adds costs to the machine.
Technical support costs in terms of human knowledge, skills and labor are large factors in the price of PCs. With a budget PC purchase, you are going to get little or no technical support. Likewise, if the customer computer builder does not factor in a margin for PC support, their business model is bound to fail against the retail giants. Whether a purchase is made from Dell, HP, or the local beige box builder — there is no such thing as a free technical lunch.
As a final point, computer builders generally have some technical know how and want to build PCs and make a business out of it. Many of these system builders started out in the early 1990s and built solid businesses at that time. However, as the level of technical knowledge and rapid change of technology grew, the requirements to keep current on technical advancements grew; the custom computer builders were often left behind in many technical areas. The cost to maintain their education on technical topics was not factored into their business model.
In order to be a successful local computer reseller, companies must have highly trained employees and provide information technology services to customers that generate revenue to maintain technical expertise. In today’s technology world, IT employees will have higher education degrees including master’s degrees in area like computer science, mathematics, business administration and communications. This cost is part of the PC retail business and must be accounted for in reselling, servicing and maintaining computer systems.
To summarize, buying a computer from a local reseller who sells brand name PCs have several important advantages over customer computer builders in today’s marketplace. These advantages include technical support, a consistent supply of machines and components, and continuing education of information technology specialists.
This article was written by Perry Lund on Thursday, May 24, 2007. Permalink.