An "A+" for Integrating with Intel Building Blocks How does a four-year-old computer products company ensure success as it expands its market focus and enters new, previously uncharted, segments?		Intel® PRO/100 Adapters: Server, Desktop

For California-based Private Label PC Inc., the answer lies in executing a business strategy based on quality and agility—and building systems with Intel® Desktop Boards and Intel® PRO Network Connections.

Private Label PC currently boasts annual revenues of $425 million. It entered the personal computer market by selling desktop systems directly, and through various value-added reseller and retail channels, to corporations, governmental entities and consumers. Just last year, Private Label PC decided to test its business model in the lucrative education market.

A good call: "Huge numbers of desktops are sold to the education market," asserts Rachel Luke, Private Label PC's President. "And educators can be very loyal customers." In a carefully constructed move, Private Label PC hedged its bet on a Southern California School District, and assembled a top-quality product line that promised "design flexibility for changing budgets." Today, the education business comprises nearly a third of its annual system sales.

Meanwhile, Private Label PC's corporate, governmental and consumer businesses continue to develop at impressive rates. Altogether, Private Label PC is now selling 40,000 desktops a month, from entry-level Intel® Celeron™ processor-powered PCs to high-end Intel® Pentium® III processor-based solutions, and its annual volumes have been growing at a rate of 32%. Every desktop system sold is based on an Intel Desktop Board, which means they can be quickly assembled and easily upgraded to incorporate cutting-edge technologies, from the latest Intel PRO Network Connections to sophisticated graphics capabilities.

According to Luke, Private Label PC's "A+" performance is directly related to its choice in integrating with Intel Desktop Boards and Intel PRO Network Connections.

The Quality Lead: A Textbook Example
One of Private Label PC's earliest lessons in the commercial and consumer markets has helped it stand in good stead during its move into the untested playing fields of education: build with quality, name-brand components.

"When we first started selling systems, we were integrating with generic motherboards," explains Luke. "Our return rate was as high as four to five percent."

In switching to Intel's Desktop Boards, Private Label PC expected to reduce its return rate to the one-percent level. The company also hoped that the change would help it penetrate altogether new markets—particularly those preferring brand-name systems.

"As soon as we started using Intel Desktop Boards, our expectations were met, and our motherboard-related return rate dropped significantly," says Luke. "And the trust we developed in the reliability of Intel Desktop Boards meant we could forgo time-consuming, expensive, pre-production board testing, a procedure that required five technicians per each pre-test." Freed from the pre-testing process, Private Label PC could then allocate more technicians to its product builds.

This extra manpower on the assembly line came in the nick of time: once Private Label PC began touting the Intel® name, and explicitly marketing its choice in integrating with Intel building blocks, it started winning a whopping 80% of the bids it submitted. "All of a sudden, we were getting tremendous volumes of business from the segments that previously turned us away because of our clone image," states Luke.

"Today, customers definitely know that the quality of a system's components translates directly into the quality of the system itself," explains Luke. "The desktop board is a key component."

The Intel® Desktop Board D815EEA and Intel® PRO/100 S Network Adapters—Meeting the Needs of the Education Market
By the time Private Label PC made its move into the education arena, it had established an unequivocal commitment to build systems with Intel® components. Private Label PC had also conceived a clear communications strategy: its selection of Intel building blocks would be pivotal to its sales presentations.

Sure enough, in early 1999, during its first School Board presentation, Private Label PC readied itself with a team of accompanying Intel engineers. "The Intel team conducted a needs analysis for the school district, drafted a five-year blueprint for a complete networking environment, and specified appropriate evaluation systems," states Luke.

Private Label PC was awarded the contract for servicing 10 "multimedia classrooms," each with 25 desktops and one dedicated Intel® processor-based server, "The support of the Intel team played a major role in our win," explains Luke. "When the School Board opened our evaluation boxes and saw that every major component was branded with the Intel name—the processors, the NICs and the desktop boards—it was clear that we had an edge over competitors who built name-brand boxes with generic components."

Reliability to Keep Classrooms Humming
To schools, the Intel® brand name has become synonymous with reliability. "High schools are no longer using computers to teach word processing and spreadsheet skills, they're actually running video editing and AutoCAD applications, where a high-performance desktop with a rock-solid reliable networking solution is mission critical, " explains Luke. As "school accountability" grows in importance, with increasing scrutiny at both the local and national levels, a reputation of disrupted classes—whether due to systems or staffing problems—is likely to draw unfavorable attention.

Private Label PC has been tremendously pleased with the Intel® PRO/100 S Server Adapter. The Intel PRO/100 S includes advanced reliability technologies, such as automatic failover, PCI Hot Plug and Active PCI* to help provide 24x7 availability, and also Intel® SingleDriver™ technology to simplify installation and maintenance. "The Intel PRO Network Connections are offered as a complete solution, from networking to hub and switch," states Luke. "With the Intel® PRO/100 S Desktop Adapter, our schools can utilize the management capabilities in the networking cards so they can update programs remotely or fix PCs during 15-minute class breaks rather than interrupt a classroom."

Design Flexibility to Accommodate Changing Budgets
Winning a state school contract may be a challenging initial "sell," but once a systems integrator has garnered its schools' trust, the loyalty payoff is surely ample. A state seal of approval lets Southern California school districts not only pay for Private Label PC systems with state grant money, but also make further purchases from Private Label PC without repeating the onerous vendor-qualification process.

This is important, Luke explains, because schools are often ready to upgrade by the following year's budgetary review. And with the flexibility inherent in the Intel Desktop Board D815EEA, Private Label PC can readily accommodate its customers' upgrade demands.

"Versatility is one of the most powerful features of the Intel D815EEA board," Luke asserts. "This one Intel SKU can satisfy every system requirement, from an entry-level Intel Celeron desktop to an advanced Intel Pentium III desktop that takes advantage of sophisticated technologies such as Ultra ATA/100 disk support and CNR for networking. So our customers know that we can easily upgrade their initial investments."

Competing in the Corporate Arena
The flexibility of the Intel D815EEA desktop board has also contributed to Private Label PC's accomplishments in the corporate computing market. Luke is convinced that for a "Tier 2 OEM whitebox builder" to be successful in the corporate market, it must compete by building a system equivalent in quality to the best "Tier 1 OEM," but at greater value. Because Private Label PC's production-line learning curve is flattened by the cumulative experience it gains by building a wide variety of configurations with a single Intel SKU, it is nimble enough to cost effectively operate in this segment. "By having a single SKU that offers the flexibility to go with the highest-performing AGP graphics card or the greatest-value integrated solution, we can differentiate ourselves as a high-quality low-cost OEM," says Luke.

What's more, rapid time-to-market and price/performance are made even more eminently feasible by the D815EEA board's incorporation of required system integration items, from the Intel® Express Installer to floppy cables and an I/O shield.

Mission-critical Service to VAR Customers
Luke believes that the value gained by integrating with Intel building blocks is enhanced further still by Intel's multi-layered support services. Because Private Label PC sources such a high volume of Intel products, it can take advantage of Intel's Country Leader Program, and receive regular on-site product training and roadmap education by a dedicated Intel account team. Additionally, Private Label PC can access the self-help content available on the Intel Business Link (iBL), a secured, encrypted and password-protected e-commerce application containing pertinent product information.

Finally, and perhaps most importantly for its VAR business, Private Label PC is given the opportunity to test and qualify pre-production building blocks in its own chassis, with the peripherals and operating systems of its own choice, a good 45 to 60 days ahead of an Intel product launch. With this lead on the qualification process, Private Label PC can assure its VAR customers that their new state-of-the-art platforms will be ready for action the very day of Intel's launch—and not a moment later than those of its competitors.

"Intel's early sample program is mission critical to us," explains Luke. "It means that we are synchronized with Intel so that our VAR customers can commit to their accounts and win vital market share."

The Future: Leading Technology. Together.
With Intel factored prominently into its business model, Private Label PC is executing to its strategy of quality and agility, and winning significant market share across multiple segments.

When asked about Private Label PC's future direction, Luke states that the company will most certainly continue to incorporate Intel's newest desktop board and networking technologies into its product line. In the immediate future, Luke is looking forward to introducing its corporate customers to Intel's latest breakthrough Network Adapter technology.

"Corporate customers recognize the urgency of encryption—studies are showing that 71% of corporate network security breaks are inside jobs**—and now, for the first time thanks to Intel's innovations, they can enjoy the protection of encryption technology without sacrificing CPU power," revels Luke. The Intel PRO/100 S Server Adapter features the new Intel® 82550 Fast Ethernet controller with integrated security co-processor that offloads encryption from the server's CPU, conserving processor resources for other crucial tasks.

"Also, " adds Luke, "advanced server features like Adaptive Load Balancing will give our corporate customers the peace of mind they need to assure their customers of 24x7 uptime."

The ever-sought after "peace of mind," for the sure-bet reliability and ultimate desktop design flexibility demanded by schools; top-notch security and 100% availability needed to compete in the corporate sector; and mission-critical time-to-market needs of VAR customers.

Intel® architecture and Private Label PC: synchronized in promise to lead technology together—the essence of success in the competitive systems integration world.

**FBI/CSI Corporate Crime and Security Survey 2000.