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The pros and cons of PC-as-a-Service

Saheli Sen Gupta | June 29, 2016
With the PC sales plunging HP and Lenovo are offering PC as-a-service. Can this be a game changer?

For the last six consecutive quarters, PC sales have declined consistently and in 2016, for the first time since 2007, shipment volume fell below 65 million. IDC predicted that worldwide PC shipment is set to decline by more than 7 percent YoY in 2016 affected by financial pressures, delay in PC replacement and relying on other devices. PC vendors Lenovo and HP Inc. have begun to offer PC as-a-service (PCaaS) in order to clear their inventories. Considering PC rental works out cheaper more enterprises might replace their PCs.

This PCaaS works on an OpEx model where organizations will be provided with PCs combining hardware and services at a fixed monthly payment. It will also include configuration, deployment recovery, asset management as well as product refresh.  

"PCaaS is an alternative for companies to consider as it helps in prioritizing investments to balance user demands against cost and technology maturity," said Lillian Tay, principal research analyst at Gartner. As a single contract, it is a combination of leasing and desktop management services. She added that this will help companies "minimize the impact of technology obsolescence and reduce the management of PCs internally."

"The IT department can focus on more strategic projects rather than constantly investing in 'running the lights' work," said Manish Yadav, Senior Market Analyst, PC, IDC India. He also added that it will result in reduction in upfront payments and make disposing assets move away from end users' responsibility areas.

However, Tay pointed out that PCaaS is not for everyone because it needs an inclusive review of business issues and also a comprehensive understanding of the company's requirement and capabilities. "Miscommunication or misconceived financial expectations and ambiguities in the contract can work against the model's effectiveness," she said.

According to Yadav, while "hardware refresh cycles will become the responsibility of the OEMs", CIOs will be locked in with limited negotiation leverage with the vendors.

The pre-determined life cycle of a PC can be now periodically refreshed - an advantage for the industry as the device's lifetime can keep on extending, said Tay. Although Lenovo and HP Inc. have launched PCaaS, Yadav was sceptical about its impact on the PC market in the near future.

Yadav expressed concerns about OEMs with hardware manufacturing genes and doubted if they would be able to provide services at acceptable levels to the customers. "While PCaaS has been explored by OEMs, we haven't observed a lot of traction for this construct," he said.

"However, given the intrinsic advantages, as global organizations experiment with this format successfully in other regions of the world, there may be a trickle down adoption in India as well," said Yadav. 

Lenovo's service is based on a cycle of 36 months and can be tailored by partners to meet the requirements of the customer. The service can be tweaked to be provided either as a fully or a partially managed offering. According to Pankaj Harjai, Director, Commercial Channel of Lenovo India, PCaaS is a highly feasible model. "With close to 10 million enterprise and SMEs in the ecosystem, we've reached a penetration level of hardly 35% of companies that actively use computers. SMEs and startups in India can definitely benefit with PCaaS and it is a huge opportunity," he said.

 

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