Local assemblers follow all-Intel route

In a bid to increase their share of the server market some local assemblers are climbing on the all-Intel component bandwagon, and Intel is coming to the party with technical and sales training. Intel's Scott Gilmour says local assemblers have been successful in delivering client PCs, 'so we're trying to help them broaden their client offerings to the server and networking infrastructure.'

In a bid to increase their share of the server market some local assemblers are climbing on the all-Intel component bandwagon, and Intel is coming to the party with technical and sales training.

According to market research firm IDC, locally assembled servers (not including PC Direct which is now owned by Gateway) make up 9% to 11% of the total server market. IDC New Zealand general manager Dinesh Kumar says with Intel's keen support that percentage will continue to increase.

Intel New Zealand general manager Scott Gilmour says local assemblers have been successful in delivering client PCs, "so we're trying to help them broaden their client offerings to the server and networking infrastructure." Intel is providing technical training on how to build advanced systems, addressing issues such as redundancy, operating systems (Linux, Sun Solaris, Novell NetWare, SCO Unix or Microsoft Windows), manageability, reliability, testing and validation of components. Sales training is also available and Intel will help companies put together a marketing campaign. "Initially we had about 10 local companies which we identified as having the technical depth and financial strength to get into the server space. Now we'd like to take it out to the next tier," says Gilmour.

Last year Intel came out with specifications for a standard high volume (SHV) server comprising Intel components such as CPU, motherboard, chassis and case. Christchurch-based Cyclone Computers, which was already in the server market, started building Intel SHV servers last year. "People like having a brand-name server for comfort," says Cyclone general manager Richard Morgan. "With the Intel SHV programme you can pick and choose from a list of Intel components that have all been tested in the United States. As long as you stick to their recipe they undertake that it will be a sound certified server."

Cyclone has also had Intel training and Intel has spoken to Cyclone customers. "We were pretty well advanced as far as building servers goes but certainly the servers are of a higher standard now than what we were building a couple of years ago. Their top-of-the-line product can be scaled to four Xeons [high-end server chips] and takes up to 1Gb of RAM. We wouldn't have played in that market earlier. We've also sold a lot more dual-Pentium servers in the last year."

Auckland-based Ultra Computers decided to start building higher end machines after a meeting with dealers last year. The company moved to a server designed around an Intel case, chassis and motherboard, says Ultra's Mark Forbes. "Our dealers have a lot more confidence knowing it's an Intel box from the ground up. It enables us to take on some of the traditional server names like HP, Compaq and IBM.

"Our percentage of server units has risen by about 20% in the last 12 months. We've gone from the $5000 range 18 months ago to the $15,000."

However, one local assembler that won't be going down the all-Intel route is Compucon. The Auckland-based firm, which is part of an Asia-Pacific group with part-New Zealand ownership, uses Intel CPUs but sources other components from elsewhere and will continue to do so, says national sales manager Kevin Langley.

"What Intel is doing is commoditising the product which we don't believe in. We have associations with other component manufacturers overseas and they give us input into their product design."

Langley says Compaq's acquisition of Digital reduced customer choice and left a gap in the server market.

Meanwhile, Intel's CPU rival Cyrix has exited the PC business and says it will concentrate on Internet appliances.

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