A mark of how close the PC has become to a disposable commodity is the suggestion by British broadcaster ITV that it dreams of putting Chromebooks in vending machines.
The network behind TV hits such as Downton Abbey floated the idea that it would get contractors kitted out with end-point devices to cut management costs.
"We’ve even had crazy thoughts around putting Google Chromebooks into vending machines," says ITV’s former chief technology officer Paul Dale, a winner of a Citrix innovation award in 2012. "You’re a temporary worker, you walk up to a vending machine, flash your pass and it dispenses your IT."
ITV’s IT infrastructure refresh in 2010 saw legacies that had accumulated through acquisitions and mergers replaced and augmented by technologies such as Citrix Receiver, Dale says. What makes a PC vending machine possible is the improvement in management and configuration tools and remote technologies that push the desktop on to any device, Dale says.
Citrix CEO Mark Templeton told delegates at the vendor’s Synergy conference in May that the end-point in the ITV vending machine example was "pretty much… disposable".
"[ITV] doesn’t even really care about getting it back at the end of the contract," Templeton said.
Although this is an extreme example of the direction corporate IT is taking – and some may debate whether a Chromebook is even a PC – it illustrates just how commoditised PCs have become. And while analysts such as IDC noted an uptick in PC sales last quarter, it’s off a base savaged by 2008’s global downturn that led to ‘sweated’ PCs nearing the end of their useable lives.
To succeed in PCs, channel partners must provide ‘glass-to-glass’ solutions of networking, cloud, security and so on in support.
In its cautiously upbeat analysis, Gartner includes new form factors such as two-in-ones, all-in-ones, hybrids and convertibles – anything running Windows or Mac OS. Gartner’s second-quarter report found that after eight quarters of declining sales worldwide, PC sales lifted over the year by 0.1 percent to 75.8 million units. But Asia-Pacific sales fell 9.5 percent in the same period (Australian figures are unreleased). Gartner said this amounted to a "stabilisation" of PC sales.
"If we look at the historical definition of the desktop or clamshell [laptop], that portion of the market has declined a lot," says Gartner’s Singapore-based principal analyst, Lillian Tay. "But there’s a move from clunky, clamshell notebooks to new kinds of computing devices such as the ultra-mobile premium. So these are actually cushioning further decline."
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Much of the blame for the PC’s decline is attributed to tablets. New ‘light’ and casual users – also those replacing PCs – swarmed to mobile devices to snack on content while neglecting their trusty PC or laptop. "The install base wasn’t replacing a PC with a PC," Tay says. "Now there’s a slow coming-back. We’ll never again [see] PCs have double-digit growth, but we see the market has bottomed out."
Tay says the next few quarters will show if the recovery is sustainable or just a blip – especially for buyers sitting on the fence.
"People found that going to iPad may not be what they needed and have gone back to their notebook that they haven’t replaced for two years. A majority of these users understand better what their usage is, and there’s something they need to do now that prompts [them] to go out and buy an additional PC."
Tay also points to "exciting" form factors such as the Asus Yoga two-in-one for encouraging buyers back into the market: "Because I still enjoy the tablet experience but I can do more productive work on a keyboard or collaboration than just on my iPad."
Tablets, once seen as a potential successor to the traditional PC, seem to have hit the skids. The corollary to growing PC sales has already been seen in the disappointing sales results and share market performance of retailer JB Hi-Fi, which reported last month that slow tablet sales had hit revenues (overall, the retailer’s full-year results were strong, driven by a push into the whitegoods market).
Another analyst firm, Canalys, saw global tablet sales drop 5 percent to 48.4 million units in June – a ‘quartus horribilis’ for Apple; its worst result since the beginning of 2012, the analyst said.
Gartner’s Tay says the tablet market is mature and that late adopters of mobility solutions are very pragmatic. For this last group, especially, the new PC form factors are attractive.
"[Enterprises] are being quite pragmatic," Tay says, adding that Microsoft’s Surface Pro is gaining adherents and being offered alongside tablets and traditional clamshell notebooks.
"When we talk to IT managers, and chief information and technology officers, there’s the sense that a ‘tablet to rule them all’ idea is coming down to a point where they’re more practical.
"But you have to remember why they were going to tablets in the first place – two years ago, tablets were very light and portable. Now two-in-ones are just as portable," says Tay.
Breaking the cycle
The other factor stalling the spread of PCs was the poor acceptance of Windows 7 and 8. But with many enterprises sticking with the 12-year-old Windows XP and refusing to play along – at least until last April when Microsoft ended support – the upgrade cycle was broken.
"The last year, when Windows 8.1 came out, it didn’t make any dent in the PC industry at all," Tay says. "The industry wasn’t ready to behave as it used to… and users who were so attracted to iPads were doing a lot of comparisons, and when they compared Windows, the applications weren’t there at all. That was one of the areas that Microsoft failed." Tay says Lenovo is strong, growing its share even while the market contracted or stayed flat, while Acer is a "wildcard".
Intel, which is helping vendors push out new devices based on slim and frugal architectures, is gearing up for a "very good year", says the chipmaker’s Australia & New Zealand channel manager VR "Raj" Rajkumar. "The new form factor is gaining momentum in the commercial and consumer space. The two-in-one notebook is looking after my personal needs as well as my work needs. PCs, notebooks and tablet segments are accelerating, and for resellers [there are] more opportunities to sell," Raj says.
He points to two-in-ones and the Next Unit of Computing (or ‘NUC’, in Intel parlance) as standout performers in the enterprise.
On desktops, NUC is homing in on the zero-client and iMac because its tiny 10 centimetre-square box clips behind VESA-compliant LCDs. The latest NUC version, based on Intel’s Haswell Core i5 chip, sits between a Raspberry Pi and Mac Mini in terms of packaging and application because its kit can be integrated into a solution. And Raj says it is suited to digital signs, where ruggedness and management are factors: "NUC is taking resellers into new categories."
"The small form-factor NUC is accelerating the growth of the desktop," he says.
In the second half of the year, Intel’s recently announced 14 nanometre processes ("Broadwell Core M") for chip die manufacture will spur further innovation and sales, Raj says. Intel says this is because the new process allows for thinner devices that run cool, which is needed by the next generation of smart appliances destined for the Internet of Things, mobile devices and servers. Although the first products will ship by year end, original equipment makers won’t broadly adopt Core M until next year.
"The new segment of low-power processors will accelerate tablet and two-in-one segments further. I see a lot of opportunities for resellers across all sectors," Raj says.
"The challenge is they need to understand the new form factors and position the right kind of devices to their customers. If they do so, there’s plenty of opportunity [for PC fleets] to be refreshed."
Next: Preconceived notions
Evan Williams, Microsoft small and midmarket solutions and partners group manager, says migration from Windows XP to version 8 has helped the past quarter sales "and will continue to the next quarter".
"XP was an operating system that coped quite well for a long time and was very successful. Windows 7 was [also] very successful, then Windows 8 came out and tried to drive a mobile focus and we recognise we didn’t look after that desktop experience as much as we innovated in the mobile space.
"Now, with [Windows] 8.1, that’s brought back the desktop features so that hit through that June quarter, that functionality. It’s too early to say if 8.1 has helped the desktop, but we listened to feedback and put back that desktop functionality in, and as we go forwards we have those users in mind."
Williams says partners may need to push back against customers’ pre-conceived notions.
"With one of our larger customers, they have a buying panel with a fully fledged notebook and a two-in-one device. When users were asked which they wanted, the majority went for a notebook. When we did readiness training showing what a two-in-one device could do with the latest software, there was a big turnaround for what people were asking from that panel."
And for partners, especially systems integrators and independent software vendors building solutions for customers, having a single platform also cuts development time, he says.
"You’ll have a platform that will enable developers to create an app across screen sizes with very limited rework and no rework in the future," Williams says.
"Resellers should look at that and go, ‘Wow! I have an app I’m going to write today and works on a phone and desktop, I can see where Microsoft is going with the operating system, I can provide value by being ready to go across screen sizes.’ "
Where once features and ‘grunt’ drove upgrades, now staff mobility and simplified management gets buyers to issue purchase orders.
Safi Obeidullah, Citrix Australia & New Zealand director of sales engineering, says workers need to get at their data wherever they are and on whatever device they have to hand. Virtualisation and cloud are playing their part.
"[Computing] is less about the traditional notion of a desktop and about the applications and data," Obeidullah says. "For any reseller delivering a solution, how do people get access to their apps and data because the traditional PC… the notion of a rectangular box with cables coming out of it will go away soon."
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And with more applications moving to data centres and cloud, the need for PCs to do heavy lifting on the desktop is evolving, he says.
Lenovo Australia executive director Matt Codrington says devices such as the Yoga have revived the struggling hardware segment.
"You have that clamshell and keyboard and that’s still the best mode, but in terms of consumption, the tablet mode has distinct advantages as well so that’s still a PC for us," Codrington says.
He says schools present unusual hazards and students have a taste for high-end machines. PCs must be tough enough to survive a bag fight, be light, and go six hours between recharges. Fashion is also important.
"I sell very few of the base models, there’s a lot of X series, Carbons and Helixes especially in private schools. As much as you can get a Chrome device, how you get data in there and the robustness is still very relevant."
Codrington sees the PC being around in five years, although research into gestural vocabularies, face recognition and other input modes will cause it to evolve. "It’s how to make an efficient interface beyond the keyboard that’s intuitive, efficient and consistent, and once you crack that the PC evolves very quickly to the next form factor."
For all the optimism, distributor Bluechip Infotech managing director Johnson Hsiung sounds a reality note.
"The two-in-one… obviously it creates a lot of discussion and interest in the channel. But most people I know are already using multiple devices so they have no rush to use the two-in-one," Hsiung says.
"With a decent notebook or mobile phone, I can [surf] the net and I have a tablet that I can use just for reading. Nowadays, the tablet is so cheap and the smartphone is ubiquitous, so why should I rush out and buy a two-in-one?"
Hsiung is not a believer in touch for input on enterprise devices, especially those running popular productivity applications such as Office: "I don’t think the applications on touch is popular because most applications don’t require touch."
He says resellers must couple device implementation tightly to solutions to be profitable. "The demand for storage and infrastructure is huge. From the channel point of view, hardware is no longer the focus – it’s the solutions, software and the service."
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