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ANALYSE THAT: Making a note of refresh opportunities

ANALYSE THAT: Making a note of refresh opportunities

The cascading price of notebooks was always going to have an impact on the sale of desktop PCs in the business arena. Hard evidence of that change has emerged in a new survey, which looked at the buying strategies of 300 Australian companies for PCs and notebooks.

It found almost one in six already started to replace PCs with notebooks. A further 19 per cent of respondents said they would follow suit within the next two to four years

The survey — conducted by new Australian-focused research company, ITR — highlighted the utilities sector as the most aggressive in its adoption of notebooks. Almost one in three respondents from this vertical suggested the PC was living on borrowed time in their organisation.

More than half (53 per cent) of respondents in large and medium-sized companies expect to embark on a complete replacement of PCs with notebooks within three years. Of five key verticals covered by the survey, government was the most reluctant to replace PCs with notebooks, with 15 per cent of agencies vaguely indicating they would make a switch “at some time in the future”.

Other industry sectors — such as manufacturing or finance and banking — are certainly more bullish about a replacement strategy. But given the buying capacity of government, the survey’s findings still indicate substantial opportunities exist in the notebook market at state and federal level.

Healthy appetite

Many organisations are now reviewing their hardware commitments as they approach their so-called “Y2K refresh” — a quirky industry phrase referring to the need for organisations to update personal computers after they blew their money on Y2K compliance back in 1999 and 2000.

One of the lessons of that era has clearly been that you can stretch out your refresh cycle, perhaps by two years, without significant penalty.

The survey found companies and government agencies were giving serious consideration to server-based computing, leveraging remote access technologies and improved bandwidth availability to increase the life of a desktop.

Nevertheless, many organisations retain a healthy appetite for hardware — 29 per cent said they would increase their budgets for desktops and notebooks for 2004-05, more than half claimed budgets would remain steady and only 15 per cent indicated they would reduce spending.

The survey has also revealed strong indications of where the money is headed. Compaq, which retains a strong brand in this sector, has lost some lustre compared with a similar survey conducted 12 months ago. But that slack appears to have been picked up almost entirely by HP, which swallowed up Compaq in the industry’s largest-ever takeover.

HP and IBM have very similar profiles in the minds of buyers, according to the survey — their machines are trusted, but considered expensive. Dell, and to a lesser extent Acer, have entrenched themselves as cheaper alternatives. Dell wins the laurels for good value.

However, it is debatable whether respondents would actually know good value if they tripped over it. Only a third of organisations said they measured the total cost of ownership (TCO) of their machines. And of those who did, an incredible 92 per cent conduct that measurement internally.

Vendors and channel partners that are tired of having their prices compared with Dell’s — and there are plenty of them around — should do more to exploit the total cost of ownership (TCO) issue. Buyers indicated in the survey that they would appreciate assistance in measuring TCO and understanding better the true cost of their computing environment. With a large-scale switch from PCs to notebooks under way, this is as good a time as any to begin that conversation.

Mark Hollands is a former Gartner vice-president and editor of The Australian’s IT section. He is now principal of ITR, a new research company established to provide exclusively Australian market research for the local IT industry. It launches next month. For further information, Mark_hollands@itresearch.com.au


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