MicronPC To Make Its Own ServersMicronPC To Make Its Own Servers

MicronPC LLC is rolling out a new server line, aimed at small and medium businesses, and this time, it's doing the manufacturing for itself. The company, which posted a profit for the first time in two years this past quarter, has been paying Hewlett-Packard to make its servers.

But MicronPC says it is making the new NetFrame 3500, which starts at $1,999 for a unit with a single 933-MHz Pentium III, 128-MB of SDRAM, and an 18-Gbyte hard drive. Expect more server lines made by MicronPC next year, says Alex Smith, manager of MicronPC's server product development group.

HP will continue to manufacture the co-branded NetServer servers it makes now, such as the NetServer LC 2000, LPr, LT 6000r, and the E 800. But all newly minted MicronPC models will be made by MicronPC, according to the company.

MicronPC gains greater pricing flexibility by making its own, says Lindy Lesperance, a Technology Business Research analyst. That's critical, considering price matters more than it did six months ago. In the past two quarterly customer-satisfaction surveys conducted by Technology Business Research, companies indicated a growing emphasis on price when it comes to buying servers, says Lesperance.

The company will also take a more unified service approach with NetFrame. Previously, MicronPC handled next-day warranty problems for HP-made servers, while HP handled problems needing same-day attention. By early next year, HP will take care of both service levels for the NetServers it makes, says Smith.

To increase its historically small share of the server market, MicronPC has to fight the 800-pound server gorilla, Dell Computer, says Gordon Haff, an Illuminata analyst. It's tough to match Dell's pricing, which, he says, is due to Dell's widespread automation. But MicronPC might be better than Dell at giving small businesses more personalized treatment. MicronPC's "higher touch," says Haff, can mean more training and customization options.