Dell signs up resellers in white box drive

Dell is openly recruiting resellers to capture more of the corporate PC market for the first time in its history.

Dell is openly recruiting resellers to capture more of the corporate PC market for the first time in its history.

Dell, whose strong direct sales model has proved a winner among users and consumers, plans to target smaller businesses that outsource their entire IT department.

Dell said such businesses would be offered custom PC configurations, similar to the custom configuration service it offers consumers on its Web site.

Its first offering for the so-called "white box" market will have a base price of $499 (£327), and will be sold exclusively to IT service providers that register with Dell.

The service providers will then resell the PC to their clients at whatever price they choose, she said. Specific criteria for entrance into the programme have not yet been determined.

The PCs will be available in a variety of configurations. The base configuration comes with a 1.7GHz Intel Celeron processor, 128Mbytes of RAM, a 20Gbyte hard drive, a CD-ROM drive, and Windows XP. It does not include a monitor.

The margins on this product are comparable to Dell's other desktop systems available through its Web site.

Michael Dell, the company's founder, chairman and chief executive officer, has said he expects the programme to account for no more than 1% of Dell's revenue over the next four quarters.

The white box market is extremely fragmented. While some PCs sold by small IT service providers are self-built, 60% purchase white box PCs for their clients from other manufacturers. Dell said it could provide this market with higher-quality PCs at an equivalent price to those purchased from smaller manufacturers.

Dell will offer a one-year warranty on parts and technical support to the IT service providers in its programme.

Dell's usual build-to-order sales model will apply. Service providers will have to order PCs from Dell and be responsible for selling their stock to avoid inventory costs.

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