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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.
Anurag Agrawal

Small Businesses - Newer PCs Positively Impact Productivity and Reduce Operating Cost

A study conducted by Techaisle with 736 small businesses in six countries – US, Brazil, China, Germany, Russia and India exposes the true costs of maintaining older PCs, frequency of repairs, hours lost due to system performance issues that unbeknownst to many small businesses are chipping away at their cash flows and productive work hours.

Maintaining Older PCs Negatively Affects Operating Cost

The study reveals that small businesses are spending an average of US$427 per PC that is 4 years or older on repair cost. Cost implications vary widely for small businesses of different sizes. For example, among small businesses with 50-99 employees, the average cost of repairing PCs 4 years old or older is US$521 per year. The repair cost therefore either equals or even exceeds the purchase price of some new PCs.

Older PCs Diminish Employee Productivity

As the system performance of older PCs begin to degrade and the number of applications running simultaneously increase to an average of eight for small businesses, it is not surprising to see that 25 percent of older PCs are upgraded each year by small businesses. The upgrades add another US$134 per older PC.  The average per PC cost to upgrade an older PC is highest within the 1-49 employee size small businesses. Combining the average upgrade cost across all small businesses with the average repair cost the total cost of maintenance equals US$561 per older PC. This is a “stealth” cost that drains cash flow and adds to the operating cost of a small business which they can hardly afford.

The study also reveals that an average of 42 hours is lost due to an older PC being repaired by either internal IT staff or reseller or even friends & family. Slightly over 36 percent of small businesses have 4+ years’ old PCs which create many different types of problems for the both the owner and the employees.

Newer PCs Positively Impact Productivity and Reduce Operating Cost

Small businesses using newer PCs have felt several positive impacts; among the top are improved application performance, improved productivity, and reduced operating cost. Small business owners mentioned that newer PCs allowed them to run 60 percent more number of applications simultaneously without any degradation in system or application performance as compared to PCs that are 4 years or older. This is a significant improvement as small businesses are increasingly using several different types of applications simultaneously including business productivity applications, Email and web, online chat and video, line of business applications, social media interactions, finance and accounting as well as music and games.

Improved performance directly leads to improved productivity and efficiency. Along with better manageability and reduced overall maintenance expenses, newer PCs directly impact the bottom-line of small businesses by reducing operating costs.

Financial Impact to Small Businesses

More than two-thirds of small businesses have moved away from a PC replacement policy and many others are keeping their PCs in use longer than in previous years. 47 percent of small businesses cited lack of budget as a key reason for not replacing older PCs in spite of frequent issues and lost productivity. However, these small businesses should re-evaluate their decision given the higher cost of maintaining older PCs which has a larger cumulative effect on the budget. They should consider both direct and indirect costs resulting from PC downtime, that is, both the “visible” and “hidden” costs. Replacing, rather than repairing and upgrading will reduce cost of operations and free up budgets.

For a typical small business that has six PCs - three PCs more than 4 years old and three less than 4 years old the study finds that the direct maintenance and lost productivity costs yields a total of $4,203 per year. To put it in perspective – that is equivalent to buying two to four new notebooks (depending upon specific purchase price).

 techaisle-small-business-pc-cost-study

Anurag Agrawal

Converged Mobility: 2-in-1 PCs in the SMB segment

Techaisle’s SMB research on Tablets, PCs and Smartphones usage has found that 28 percent of SMBs are aware of 2-in-1 PCs, and 15 percent are considering purchase in the next one year.  Marketers have done a generally good job of building awareness which is highest at 73 percent within the 500-999 employee size businesses in the US. However, marketers have not succeeded in creating consideration to purchase from awareness within mid-market segments.

Globally there are 265 million mobile SMB employees who are telecommuting, traveling and/or using cloud-based services.  The potential market is therefore massive. However, most SMB employees are already two-device users and are on their way to becoming a three-device user as they gain power of device choice, bringing personal experiences to work and vice-versa. The odds of a tablet and notebook both needing to be refreshed at the same time is low, and therefore it may be difficult to position a 2-in-1 PC as a replacement for either device. Nevertheless there are seven different potential market opportunity segments and each of these seven opportunity areas has scenarios in which 2-in-1 PCs might gain share – but each has its challenges.

The SMB survey data also indicates that general-purpose devices are losing ground to task-specific devices, a trend that would negatively impact middle-ground opportunity. Further, 2-in-1 PCs will likely be at a price disadvantage to Android PCs, which will begin targeting this same niche. PC OEMs will need to position the benefits of both the 2-in-1 PCs and their unique approach to these devices, while attempting to avoid the confusion that has hampered progress in the SMB market to date.

When we sift through the data on different perspectives on 2-in-1 PCs’ positives and negatives, we see that there are some core strengths to build upon, but that some design changes will be needed before these products can make a serious run at the endpoint device (PCs, Tablets, Smartphones) market’s middle ground. The moving parts needed to enable a 2-in-1 are also viewed as a drawback/potential point of failure for these products. And the overall diversity of approaches to enabling 2-in-1 functionality – ranging from detachable displays to Ferris wheel, flip/fold, swivel/twist and slider-based approaches – has confused the market. Too many options in the marketplace provide choice but also cause purchase inertia. This is a high-stakes issue for 2-in-1 PC OEMs and those with successful designs stand a much better chance of growing with the market than those whose designs are marginalized.

The aggregate opportunity for 2-in-1 PCs is compelling but there is no aggregate marketing strategy that will capture this opportunity. PC OEM marketers will need to align with the market opportunity segment that they can best develop, and ensure that their message and activity content is consistent with the conditions that govern the target area.

techaisle-tablet-pc-smartphone-continuum-blog

The 2-in-1 market is an attempt to fill a ‘middle ground’ that has been created by the trend towards multi-screen endpoint device strategies. Techaisle’s research shows a usage continuum of endpoints. On one side, there are desktop devices capable of creating content. At the other end of the spectrum, there are smartphones that lack the tools needed for content creation, but provide a lightweight, mobile option for content consumption. On this continuum, tablets are also primarily consumption devices, but can be used for light content creation, while laptops are capable of creating content, and can be used as a mobile consumption port. 2-in-1 devices are targeting the space between tablets and laptops. They are attempting to provide better creation options than are found with tablets, while offering a form factor better suited to consumption than is found with traditional laptop.

Techaisle believes that the key to 2-in-1 PC success within the SMB market will be the ability to articulate the benefits of the “middle ground” – the combination of consumption and creation that 2-in-1 PCs can address better than either tablets or traditional laptops.

More detailed data is available in Techaisle’s report titled “SMB End-Point Device Adoption Trends: Tablets, PCs, Smartphones” which covers:

  • Current and Planned purchase Intentions of client devices: Tablets, PCs, Smartphones
  • Current and Planned Tablet OS & Application adoption trends
  • BYOD trends within SMBs
  • XP, Windows 8 refresh intentions
  • New OS PCs: Chromebook, Android adoption trends
  • Converged Mobility PCs trends: 2-in-1 PCs
  • Purchase Channel and Sources of Information
Anurag Agrawal

Seven Key Trends and their Meaning: SMB Endpoint Device Market in 2014

IT markets tend to be complex and fast-moving – but even by IT industry standards, the endpoint device market in 2014 is extremely complex, and subject to significant and abrupt changes. Consider the following trends – some of which have played out over several years, and some of which are scant months old – and how they might affect buyers and suppliers of client technology this year:

#1: Migration to multiple screens: It is clear that today’s SMB endpoint device user is looking to perform specific tasks with the best possible device

    • Impact/implications: The ‘Swiss Army Knife’ appeal of the notebook – which doubled as both a mobility device and as a content creation platform – is waning. Tablets, not notebooks, are seen as the key productivity tool; and there is evidence to suggest that the desktop may have resurgence as a content creation option.



#2: Migration away from the traditional Wintel platform: For decades, “endpoint device” has been synonymous with “PC,” and “PC” has implied a device based on Microsoft Windows and Intel microprocessors. Through the course of this decade, that definition has been eroding. With the iPhone and iPad, Apple established iOS as a key smartphone and tablet technology. Google’s Android, with the support of powerful OEMs, has built a leadership position in the smartphone market, and has a great deal of market strength in the tablet market; Techaisle SMB End-Point survey results indicate that it is gaining momentum in the PC market as well. Meanwhile, low-power ARM chips have spread beyond portable devices into the PC, and even the data center.

    • Impact/implications: The proliferation of operating systems and underlying architectures creates opportunity for a wide range of suppliers – and confusion for a large number of SMB and mid-market IT managers who need to integrate, support and secure these devices. Suppliers should both exploit niche opportunities and look for strategies and tools that help IT managers to wrap niche products into existing, evolving client device portfolios.



#3: Incursion of new form factors:The acceptance of multiple screens, coupled with the availability of new platform technologies, has created a market where “endpoint devices” span a wide range of device categories: desktop PCs, notebook PCs, tablets and smartphones, as well as thin clients, All-in-Ones, and other device types.

    • Impact/implications: These form factors are differentiated by more than size and input technology; they move through different SMB channels at different price points; they appeal to different kinds of SMB buyers, who use different means to learn about and source them. The complexity associated with the proliferation of form factors will challenge marketing organizations that are accustomed to using a limited number of marketing vehicles and channel options to reach a relatively-predictable buying audience.



#4: Opportunities to redefine product categories: Buyer openness to new screen types has emboldened suppliers to redefine categories, or to create entirely new device classes. Some of these attempts (like the Ultrabook) have had limited success, but others, such as the 2-in-1 tablet/PC, show promise.

    • Impact/implications: There is arguably more opportunity to define net-new endpoint offerings today than there has been for decades. There is an additional requirement on suppliers to segment accurately, to be in tune with the needs and preferences of target segments, and to move quickly to address new demand drives – but there is also new opportunity to translate this acumen and agility into substantial marketing-driven success.



#5: Solution opportunities: As endpoints become more capable, buyers – especially the emerging class of SMB business decision makers (BDMs) who wield increasing power in IT decisions – will move past the device itself, to a need for solutions (such as mobility) that capitalize on the capabilities of the new units.

    • Impact/implications: To date, endpoint device suppliers have focused on building and selling screens, not the solutions that connect the screens. Marketers who understand how to connect their products to business-relevant solutions have an opportunity to differentiate those products, attracting new SMB customers and partners.



#6: Changes in buying points: The impact of SMB BDMs was mentioned above, but this point really should be considered as a trend unto itself. The IT industry has been told for years that BDMs (and especially, CMOs) would displace CIOs as the key IT decision makers. This certainly has not come to pass, and it is not clear that this shift will ever result in CIOs being displaced from their technology strategy roles. However, it is very clear that BDMs possess a great deal of power in many environments, and that their preferences and requirements are an important factor in shaping overall IT priorities.

    • Impact/implications: If BDMs gain power by joining rather than supplanting the IT decision maker (ITDM) “at the table”, the net effect is that the decision making unit within SMB customer accounts is getting bigger and more diverse. This may offer new opportunities for one-off point technology sales, but is likely to increase decision time and complexity in many organizations – particularly, within larger businesses.



#7: Product and information distribution logic: In a market dominated by the ITDM, vendors could rely on IT-focused information sources to reach prospective buyers, and IT channels to manage relationships with these buyers. Like the ITDMs themselves, these requirements persist in the current market – but are joined by a new set of inputs. SMB Business buyers do not look for the same types of information that ITDMs require, and they are looking for different kinds of information to help shape requirements and preferences. Meanwhile, the traditional channel plays an essential role in distributing traditional endpoint device types (desktop and notebook PCs), but other channels (carrier, retail) are key conduits for other product types. Effectively managing the mix of information and buyers, and products and channels, is becoming a key factor in vendor success.

    • Impact/implications: Increased complexity in information sources poses a challenge for marketers, who must find multiple ways of reaching customers. The imperative for success in this activity is increased by the common belief that buyers are using online resources to get much deeper into the purchase cycle before they contact a vendor; this increases the importance of effective content marketing, as direct sales alone will have difficulty in shaping needs and associated preferences. At the same time, the channel’s support needs are changing, and the vendor’s need to expand its channel by engaging with new kinds of partner businesses is becoming clear. Vendors need to both help traditional partners to succeed in their business transformations, and to establish relationships that reach new buyers within customer organizations.



Any one of these trends would be noteworthy against the backdrop of the SMB endpoint device opportunity, which accounts for a clear majority of all IT hardware spending, and affects literally every user of technology. Taken as a whole, these seven factors indicate potential for substantial market upheaval, creating risk and opportunity for current market leaders and new market entrants alike.

Any one of these trends would be noteworthy against the backdrop of the SMB endpoint device opportunity, which accounts for a clear majority of all IT hardware spending, and affects literally every user of technology. Taken as a whole, these seven factors indicate potential for substantial market upheaval, creating risk and opportunity for current market leaders and new market entrants alike.

To help illustrate potential opportunities and pitfalls in the 2014 endpoint device market, Techaisle has produced the The SMB Endpoint Device Adoption Trends report. This report is based on survey of SMBs, and includes both BDMs and ITDMs across each SMB size category.

About the Report

Coverage:

    • Current and Planned purchase Intentions of client devices

 

    • Tablet OS & Application software adoption – Behind the Screen

 

    • BYOD: Employers vs. Employees, or Micros vs. Larger SMBs?

 

    • Across the OS generations: XP, Windows 8 refresh intentions

 

    • The Android Opportunity: Google in the PC Market

 

    • Converged Mobility PCs: 2-in-1 PCs

 

    • PC Purchase Channel and Sources of Information



More details about the report can be found here.

Related Research Articles

Techaisle survey data shows BYOD is a major force in the US SMB Market

SMB Purchase Intentions for Android PCs

Key Attributes of Successful SMB Mobility Solutions

Anurag Agrawal

SMB Purchase Intentions for Android PCs

29 percent of SMBs say that PC OEMs should offer Android OS PCs; 5 percent intent to purchase

Techaisle’s recent survey of SMBs in North America (UK, Australia data coming in March; China, India in April) suggests that the PC may be returning to its roots as a window to broader resources, less important as a content creation machine than as a portal to cloud-based systems. In the survey on SMB end-point device adoption trends, respondents were asked to use a scale to indicate the kinds of PCs that they would like to see from their PC suppliers: a “1” response indicated that they required only Windows-based PCs, a “10” indicated that they required only Android-based PCs, and responses towards the middle of the scale indicated a preference for choice between the two platforms.

techaisle-smb-android-pc-adoption-blog

The data shown in the graphic indicates that Windows is clearly still the #1 choice for PC buyers – but it also shows that many small and mid-market businesses are interested in having an Android alternative. 29 percent of SMB respondents said that PC vendors should offer Android OS based PCs.  In fact, in a follow-up question, 5 percent of small businesses and 18 percent of mid-market businesses stated that they would “most definitely” be interested in acquiring Android-based PCs. Almost twice as many BDMs (Business Decision Makers) as ITDMs (IT Decision Makers) are in the “most definitely” group.

What’s behind this? It’s very likely that Android-based PCs may not have the same level of capability as Windows-based PCs – but we can assume that buyers at SMBs understand this, particularly the traveling business decision makers. It appears that they are indicating that the needs associated with ‘personal productivity’ in a cloud-based world are changing, that in many cases, the PC is primarily a window into resources located elsewhere, and secondarily, a content-creation device.

The PC in 2014: more like the windshield than the engine

The PC has been a ‘content creation’ device in world dominated by consumption-oriented smartphones and tablets. Is its position eroding?

In the very early days (the 1980s), PCs in business led a dual existence. Especially in technology-poor small businesses, PCs provided access to tools like spreadsheets that allowed for automation of previously-manual, hard-to-manage tasks, while in larger enterprises, they were often used as terminal emulators – essentially, windows to larger systems offering the added bonus of local processing power.

Through time, the PC became the key personal productivity tool for staff in all industries, working for organizations of all sizes. In recent years, though, the PC’s pre-eminence has been assailed by the growing use of smartphones and tablets that offer limited local processing power, but access to the vast resources of the Internet. In many environments – and in the usage patterns of many ‘multi-screen’ workers who can choose between a PC, a smartphone and a tablet for a specific task – the PC has become niched as a ‘content creation’ device, useful for building presentations or spreadsheets or complex documents, but awkward for on-demand display of these kinds of content.

Good news for the monkeys. Whither the gorilla?

An increasing market for Android-based PCs would be hugely advantageous for companies that produce tools for Android users, and especially, for providers of open-source Office suites such as FreeOffice, OpenOffice and Kingsoft. However, it is Techaisle’s belief that the availability of a fully-functional version of Microsoft Office on Android will be essential for broad Android PC success, as many businesses require these applications for local PC activities.

How should Microsoft react to these market trends? On the one hand, delivering a complete version of Office for the Android platform would open up an enormous market opportunity, giving Microsoft the potential to continue positioning Office as the lynch-pin connecting PCs and content creation. On the other hand, Android’s gains in the PC market will come directly at the expense of Windows 8, diminishing Microsoft’s control of the platform, and accelerating Windows sales declines in an already-soft PC market.

There are likely widely-divergent views on this issue in Redmond. It is worth noting, though, that even a firm as omnipresent as Microsoft takes on risk if it attempts to thwart buyer demand for new technology. The “third hand” in the dichotomy above – that Microsoft continues not to offer full Office functionality for Android, that FreeOffice, OpenOffice, Kingsoft or something similar become embraced as ‘good enough,’ and that large swaths of the market decide they can live without Windows and Office – is clearly a nightmare scenario. We expect that as user demand mounts, Microsoft will feel increasingly-compelled to participate aggressively within the Android PC market segment, even as it touts the advantages of Windows within its native PC constituency, and as an alternative to Android (and iOS) in the smartphone and tablet environments.

More detailed data on end-point device preferences is available in Techaisle’s upcoming report titled “SMB End-Point Device Adoption Trends: Tablets, PCs, Smartphone” which covers:

    • Current and Planned purchase Intentions of client devices

 

    • Tablet OS & Application adoption – Behind the Screen

 

    • BYOD: Employers vs. Employees

 

    • Across the OS generations: XP, Windows 8 refresh intentions

 

    • New OS PCs: Chromebook, Android

 

    • Converged Mobility PCs: 2-in-1 PCs

 

    • Purchase Channel and Sources of Information



More details about the report can be found here

Related Research Articles

Techaisle survey data shows BYOD is a major force in the US SMB Market

Seven Key Trends and their Meaning: SMB Endpoint Device Market in 2014

Key Attributes of Successful SMB Mobility Solutions

Research You Can Rely On | Analysis You Can Act Upon

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