Home office gambles

Home Office Computing, Nov, 1998 by Heather Newman

Andrew Watson, vice president of marketing at Monorail Computer Corp. (www.monorail.com), says Stanchek's experience is typical. Watson, a former Compaq veteran, now makes computers with both Intel and AMD chips. "We don't see any compatibility issues, or any fear of AMD going out of business," he says. "They're both really solid chips."

Bottom Line: When the chips are down, there's little or no noticeable difference. Go ahead and buy a K6-2 or comparable clone to save some money on a high-performing machine.

4 Brand name or Brand X? You see the ads in your local paper: A no-name machine, or so-called "white box," for a very attractive price. Should you bite? Probably not. This manufacturer might be using the same name-brand components (such as graphics and sound cards) that Gateway and Compaq do, but then again, it might not. It may specialize in offering turnkey hardware, software, and networking solutions for local businesses, but it probably won't match the 24-hour tech support that home office workers get from major mail-order vendors.

Insight (www.insight.com) of Tempe, Ariz., used to make its own white box machines. But the company has since decided to go back to doing what it does best: selling familiar brands via mail order, according to vice president Brian Hicks. White boxes make up 35 percent of all United States PC sales--mostly because of large business purchasing--but Hicks says they're not a reliable choice for home businesses, which can't afford even a day of downtime. And perhaps most important, their price advantage is shrinking.

"The gap between the branded manufacturer and the white box manufacturer has really compressed over time," Hicks says. "It used to be $500 to $600. Now it's $100 to $200. The industry has taken notice of the white box, and now everybody is driving costs out of their models." Take Inca Computer (www.inca.com), a reputable but tiny computer company in Birmingham, Mich. At press time, Inca sold a well-equipped 400MHz Pentium II system for $1,699. But the price for an identical Gateway, with 4MB more graphics memory? $1,660.

Diane Schreiber, a Jupiter Communications spokeswoman, also runs a custom wedding cake business out of her home office in New York City. When she needed to purchase a new PC, she went straight for the biggest name she knew and bought an IBM Aptiva. "I know IBM has solid, solid customer service," she says. "I felt it was very important to buy brand name. I said, `I want something reliable, that I can really trust.' With prices so low, you can afford to go with a company that you have faith in."

Bottom Line: Long odds.

5 Lease or purchase? There's a long tradition of renting or leasing equipment for home offices, and major computer manufacturers are hoping you'll extend it to your PC. If you're tight for cash and need a new machine, leasing can certainly be a better option than buying a system with a high-interest credit card. "A lot of people who run small businesses don't have the cash up front," says Bob Kaufman, spokesman for Dell Computer (www.dell.com). "In our lease, there's no up-front costs. That is a really attractive option."