Velocity Micro Buys Overdrive, Puget Next?

[TheQuadfather]

Velocity Micro bought out Overdrive PC. Further consolidation in the high end pc enthusiast industry is likely.

[PCC-Richard]

Yeah, I found that interesting.

The other consolidations made sense to me: Voodoo+HP. Dell+Alienware. I was surprised that Velocity Micro was shopping around, and I honestly don't know anything about OverdrivePC besides their "Porn for Geeks" ad campaign =P

It's a weird industry. It runs on super thin margins most of the time, at least as far as Dell, HP and Velocity Micro are concerned. Meanwhile, boutique builders tend to charge larger margins because they don't have the super-contracts that the giant corporations do, but the trade-off is that you offer superior choices, support, service, warranties, etc. So I can see the incentive for a company like Dell to buy a high margin business like Alienware, and then supply them low-cost parts from their super-contracts, and make a killing in the margins. This model only works if they continue to offer the same level of quality. I don't have any first hand experience with Alienware support, so I can't comment.

It'll be interesting to see how these new mergers develop, and whether they're good or bad for the industry.

[jdbrown_82]

you said "So I can see the incentive for a company like Dell to buy a high margin business like Alienware, and then supply them low-cost parts from their super-contracts, and make a killing in the margins."

i thought that same thing the moment i read they bought alienware. i have an alienware area 51 pc right now. (dont worry fixing to order one from puget ..lol!) i have had my system for about 4-5 years and was happy with it overall. based on what i have been reading and the pics i have been seeing; they are not doing as good on the build quality end of things. and when you call tech support, as usual you get someone who can barely speak english.