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The challenges of a saturated PC market

Longer PC lifespans mean resellers need to change their value proposition to stay competitive

One of the biggest challenges facing the Canadian PC market in 2008 stems from its past wins. The industry is, in a way, a victim of its success.

The number of installed PCs has reached an all-time high. Adoption rates have been robust for both corporations and consumers. And thanks to advancements in processor, storage and memory technologies the average PC has a longer lifespan. Compared with the previous two to three year duration, PCs – both desktop and notebook – are now enjoying a three to four year corporate lifecycle. And in small businesses, they can last even longer.

The benefits of the longer lifecycle are numerous for purchasers, as IT budgets can get pushed out slightly, but this change renders challenges for solution providers and vendors as they look for new business opportunities.

Previously, the release of each new operating system ushered-in the need for increasingly robust hardware. With the more powerful machines, however, even OS upgrades are getting delayed. The introduction of a new OS is no longer a primary reason to upgrade systems, according to recent Info-Tech Research Group survey results.

The PC is at the core of the corporate IT refresh cycle. Replacing servers and storage certainly garners revenue opportunities for both solution providers and vendors; however, they carry even longer refresh cycles than the PC.

Over the past couple of years, there has been a focus towards providing service and consulting contracts. Vendors and solution providers offer services to corporate end-user clients to increase touch points and generate revenues. Certainly, if a solution provider is in regular client contact, new business opportunities become increasingly obvious, and the provider is present to offer solutions.

This trend must continue to ensure future viability.

Another pressure hitting solution providers is the strength of the Canadian dollar. While it has fluctuated over the past couple of weeks, its strength is definitely causing end-user clients to source hardware south of the border. The cost savings of U.S.-purchased product is enticing for corporations.

A long-term strategy is required, one whereby solution providers develop strong business acumen to address the needs of customers. The conversation must revolve around understanding and pinpointing the customer’s pain points, instead of, “do you need new PCs?”

This conversation has already started. This conversation must continue. This conversation is the way to realize new business opportunities, and to longevity within the maturing Canadian IT market.

Michelle Warren is a senior analyst with the London, Ont.-based Info-Tech Research Group.