White Box Market Changing but Growing

by Drew Robb

The white box server sector may have changed, but it's big, it's thriving and it has a powerful friend in the business — Intel.

A decade back, white box vendors were a dime a dozen. Every town, every suburb had its "guy" who built servers to order — often in some dingy back office or garage. Like mom-and-pop video stores before them, however, those days are gone. Just as Blockbuster took over in the video/DVD game, vendors like HP, IBM Corp. and Dell cornered the x86 space with the right combination of reliability, performance and price.

"The x86 server market is highly consolidated with the top three vendors (HP, Dell and IBM) accounting for more than 70 percent of both revenue and shipments," said Jed Scaramella, an analyst with IDC of Framingham, Mass. "IDC estimates the white box market is roughly 10 percent of the x86 segment."

However, far from slowly fading away over time, the white box server segment is alive and well and it has even found a patron: Intel. That's right. Intel Corp. of Santa Clara, Calif., has found itself a nice market niche in the form of server building blocks for the reseller and integrator community.

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"Intel has been a driver in server building blocks for more than 10 years when we first began selling boxed server boards, as a way to help more customer segments realize the benefits of server technology," said Todd Garrigues, North American channel manager for products at Intel. "The Intel Server Board S5000PSLSATAR is currently the most popular dual processor server board from Intel."

The Intel Server Board S5000PSL supports a variety of chassis configurations and processors. This includes the quad core Xeon processor 5400 series and 5300 series, as well as the dual core Xeon processor 5200 series, 5100 series and 5000 series.

It's based on the Intel Chipset 5000P and supports two processors.

System bus speeds available are 667 MHz, 1066 MHz or 1333 MHz. A total of 32 GB of memory capacity is available via 8 DIMMs. Two Gigabit Ethernet connections are part of the package, as is RAID support. Intel Embedded Server RAID Technology II provides RAID 0, 1, 10 with optional RAID 5. Pricing in the channel ranges from mid-$400 range to $600 based on features.

"The largest single segment served by the white box segment is SMB, for e-mail, office, Web hosting and so on," said Garrigues.

So where have all the white box vendors gone? Garrigues pointed out that Intel has established a network of more than 4,000 resellers building servers in North America, a business he said is growing fast, not shrinking. This organization has been established on the quality mantra. The company spends about 60 to 70 man-months testing and validating each building block to ensure it is compatible with third party hardware and software and meets with different regulatory specifications.

Ocean Office Automation Pty Ltd, manufacturer of Octek PCs, Workstations & Servers, is an Intel Authorized Server Assembly Centre. Based in Australia, all Octek servers are built using Intel building blocks and Intel-validated components. Fully configured servers are further validated by Intel before release into market.

Another member of the Intel server fraternity is systems integrator DTR Business Systems in Walnut, Calif. It builds custom boxes mainly for smaller ISVs. As high availability is paramount in such operations, DTR switched to Intel as the primary source for key components for the one thousand or so servers it ships each year. It's a move that has really paid off, too. The company is expanding rapidly and it has retained its clientele despite a hike in prices due to the Intel switch. It didn't take their clientele long to realize the value of top quality goods almost exclusively based on Intel motherboards and server chassis.

Breadth of Products
Intel doesn't just provide a few flavors for resellers. It offers an extensive breadth of server chassis, several blades, carrier grade servers and a whole bunch of 1U to 4U tower and rack servers products — from a front-end fileserver with one processor up to an enterprise server with four quad-core Intel Xeon processors. The company has also been working to expand its product range even further.

"Storage and blade-type servers are growing rapidly, as is the uni-processor segment (moving up from desktop machines)," said Garrigues. "Network management and virtualization are also rapidly growing segments."

The Intel Storage Server SSR212MC2, for example can either be used as an application server with its own internal storage or as a dedicated NAS or SAN appliance. This 2U machine is built to support up to 12 TB of capacity, up to 32 GB memory and supports connectivity options such as quad port Gb Ethernet, 10 Gb Ethernet, Fibre Channel, or Infiniband. On the processor side, it can have one or two dual-core or quad-core CPUs — the 5100 series or the 5300 series. Its Intel RAID controller SRCSAS144E supports SAS and SATA, and provides RAID 0, 1, 5, 10 and 50 capabilities.

"With more than twice the performance improvement over our previous product generation, the SSR212MC2 hardware platform provides resellers and integrators a high-performing building block upon which they can build effective solutions," said Mike Wall, general manager for the Intel Storage Group.

Another big attraction of Intel white boxes is software. As well as Intel's server management software, these boxes come with a host of software options. On the storage side, for example, Intel can call upon its vast partner network to bring in a diverse ecosystem of suppliers such as Microsoft Corp. of Redmond, Wah, FalconStor Software Inc. of Melville, N.Y., Emulex Corp of Costa Mesa, Calif., and Wasabi Systems Inc. of Norfolk, Va.

"Intel has made it easier and more cost-effective for storage solution providers to bring enterprise-class storage solutions to businesses of all sizes with this customizable system," said Wall.

The company gains more kudos from the reseller community by refusing to sell its servers off the shelf. Only authorized resellers and systems integrators can have access to their server building blocks.

Buyer Beware
Stories abound within IT of dodgy white box products that contained second hand connectors, poor quality power supplies and cooling fans that didn't work properly. Resellers can now defend themselves about such claims by highlighting the reliability of the Intel brand.

"If you must buy white boxes, make sure that a solid warranty is in place, and that the components are well supported by available device drivers for multiple operating systems," said Clive Longbottom, an analyst with U.K.-based Quocirca Ltd. "As you move higher up the value chain, it's probably better to go for named equipment."

Scaramella of IDC agreed with Longbottom that where commodity items are required and pricing makes sense, white boxes are a good way to go.

"Enterprise customer purchasing non-branded servers are not all that different than consumers — price is the still primary driver," he said. "Solution providers that also package white box servers as part of a large solution represent a major proportion of the white box market."

This article was originally published on Wednesday Feb 20th 2008
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