Summary
Hurd is right to be cautious here. There are few drivers to force upgrades and cash strapped companies are sure to delay purchases anywhere they can
Analysis
Nearly all corporations are scrutinizing every purchase and absolutely anything that can be deferred is being deferred. Most existing desktop PCs still meet their tasks well. Email, presentations, documents, and web surfing just do not put that big of a strain on PCs. A few other factors worth considering in the corporate market include,
XP End of Life? - Many corporation have been very content to continue running XP Pro. In fact, many PC OEMs are still offering the "XP downgrade" with their systems. A 4-5 year old PC runs just fine with XP and standard Office apps. There had been great hopes for a Vista led upgrade cycle. At this point, I presume that many will wait for MS 7.
Proliferation of PCs - I am aware of major corporations which have 1.5 PCs per office employee with some departments above 2. Even if some PCs begin to require service and are better decommissioned, there are ample stocks of extra PCs out there. Downsizing has left even more "extra" PCs floating around major corporations. Whether their IT departments can track and utilize these is yet another question.
I suspect that laptops could see an earlier ramp. They tend to get harder use than a desktop. Also, when a keyboard stops working on a desktop, it is easy to address. Not so easy on a laptop.
The impending Windows 7 release and Intel's comments seem to be raising hopes. However, I think that caution is still warranted. The introduction of Windows 7 later this year could be a more significant catalyst for upgrades than Vista was, with first impacts being seen on the consumer side. I do not think that anyone will bet on Microsoft hitting a release date though. As for Otellini's remarks, the people talking to end customers (PC OEMs) do not share his confidence.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
