Four years after Y2K and the end-user hardware upgrades it inspired, IT decision makers again face a major refresh of desktops and notebooks.
Cautious spending attitudes will continue to prevail in most industries, but PCs purchased prior to 2000 have long since reached the end of their life cycles. While many organizations began upgrading hardware last year, price erosion and a greater push by vendors to justify the return on investment for mobile computing will be big drivers this year as IT buyers begin desktop and notebook refreshes.
Although it is still too early for optimism regarding 2004 IT spending, positive economic news and GDP (gross domestic product) growth will drive IT managers to spend modestly more than last year on IT overall—an estimated 1.7 percent, according to Forrester Research Inc., in Cambridge, Mass.
Desktop and hardware vendors eWEEK Labs spoke with said they have seen renewed interest in spending on end-user hardware. In addition, in a survey by Forrester of 818 technology decision makers in North America, more than 40 percent of enterprise IT buyers said they considered new end-user hardware and Windows upgrades to be a priority for this year. The report was released in November.
Although IT executives are cautious about their 2004 spending forecasts, Forrester is projecting that pent-up demand for replacement PCs will push hardware spending into positive growth for the first time in four years—jumping from an estimated $77 billion in 2003 to $84 billion in 2004.
This is not to say that IT buyers will be spending frivolously. Rather, they are hunting for bargains and pushing vendors for the best deals possible.
As evident in a recent conversation with eWEEKs Corporate Partner Advisory Board, IT buyers are still looking for performance at the best price.
“In general, were looking at early next year as being a very conservative time for buying,” said Gary Gunnerson, an eWEEK Corporate Partner and IT architect at Gannett Co. Inc., in McLean, Va. “And well do what we always do, which is go after the best-bang-for-the-buck machines.”
Vendors say IT buyers are looking for systems that ease user frustration, decrease IT costs and increase productivity. Flexibility in the hardware infrastructure—as provided by docking stations, power adapters and peripherals that can be used across the board by different products—is also in demand, vendors said.
Executives at IBM, Dell Inc. and Toshiba America Inc. say 2004 hardware lineups will support better compatibility. Dell, for example, is pushing across-the-board peripheral and power adapter compatibility among its Latitude desktop and notebook offerings.
Interest in lightweight mobile computing devices remains focused on Intel Corp.s Centrino platform. The platform, which includes the Pentium M and the Pro/ Wireless 2100, Intels integrated wireless networking solution, made its debut last year.
With better battery life and faster processing speeds, Centrino-based laptops and Tablet PCs are something to be excited about. Interest in such systems will likely pick up when Intel releases a dual 802.11b/g Wi-Fi chip for its Centrino platform this quarter.
Sumit Agnihotry, product marketing manager for the notebook business unit at Acer Inc., in San Jose, Calif., said his company plans to release the new Wi-Fi chip in its TravelMate TM C300 Tablet PC line as soon as the chip becomes available. Toshiba is expected to follow suit with its Portégé lineup.
A little more than a year after the release of Microsoft Corp.s Tablet PC platform, officials from Toshiba and Acer said theyve seen growing interest in and larger purchases of tablets by nonvertical organizations. Sales divisions, for example, are big consumers of the form factor, they said.
The release last year of Microsofts Office 2003, which includes enhanced capabilities for the Tablet PC, is also a driver for tablet adoption. Organizations that require or desire pen-based input capabilities will want to consider the benefits of tablet-optimized programs such as Microsofts Office 2003 and OneNote as they make their purchasing decisions. Microsofts plans to release the second version of its XP Tablet PC operating system in mid-2004 should also generate buzz among buyers.
While weight and mobility are always concerns for road warriors, vendors said desktop replacements with large displays and ample power remain in demand. IBM officials, for example, said the companys ThinkPad G Series and R Series desktop replacement notebooks appeal most to users who want to migrate from a desktop system to mobile platforms while maintaining processing power.
Power users who require the latest and greatest in system performance will turn to hardware in the high-end desktop category. This includes PCs built around 64-bit processors from Advanced Micro Devices Inc. and IBM.
The 64-bit processors have more power and address space, but they also feature improvements in memory use and I/O capability. And, most important to enterprise buyers, they allow backward compatibility with the 32-bit world.
Finally, two of the Corporate Partners who participated in the Roundtable said that monitors are much slower to die these days but that when they do, flat panels are often the replacement form factor of choice.
Indeed, as price points for flat-screen monitors begin to drop, vendors said theyre seeing an increase in interest for the space savers. Executives at Dell said the technology in flat-panel monitors is getting to the point where the refresh rates are almost equivalent to those found in CRT monitors.
Senior Writer Anne Chen can be reached at [email protected].
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