Intel says two-thirds of corporations still spending on PCs

Intel said that two-thirds of corporations are still spending on personal computers for the enterprise during the downturn.

The data is clearly self-serving, since Intel sells microprocessors for computers. So you have to view these numbers through a skeptical lens. If you had a headache, Intel people would tell you to buy two new PCs and call them in the morning.

But the data is based on a survey of IT managers interviewed by Wipro Consulting during March. The respondents are from 106 large companies and government bodies in North America (with at least 5,000 PCs per company) and Europe (with at least 2,500 PCs per company).

Roughly 60 percent of those surveyed said they haven’t altered their plans to continuously purchase new computers for the enterprise. About 32 percent said they’ve delayed purchases, while only 8 percent said they’ve started spending more.

Robert Crooke, vice president of the business client group at Intel, acknowledged that sales of microprocessors in the business market have not been doing as well as in the consumer market — a comment consistent with remarks made by Intel chief executive Paul Otellini in his quarterly conference call. But he said Intel is encouraged at the survey results, which show that demand has not entirely evaporated, and he agreed with Otellini’s assessment that the PC market has “hit bottom.”

Taking a step back, Crooke said the opportunity for PCs is still big. Governments are spending $3 trillion worldwide on economic stimulus packages. Five billion people in the world still don’t have a PC, even though there are 1.1 billion PCs in the world. And 35 percent of homes have a PC that is more than three years old.

Intel’s sales pitch is that businesses that adopt new microprocessors with built-in security and management features (under the Vpro business brand) are less costly and less risky to maintain than older computers. Crooke said it makes sense to replace a computer once every three years to take advantage of updated hardware and software, and that doing so will pay off quickly.

Crooke said that a new computer can reduce operational costs for IT staff by 52 percent in terms of the annual cost of supporting the computer. For a big company with 30,000 computers, that translates to a savings of $3 million over four years with standard computers. With Vpro-based computers, the savings doubles to $6 million over four years. Crooke said that an Intel Core 2 microprocessor-based computer pays for itself in 17 months, given the operational cost savings. With Vpro, the return on investment is 10 months. Not counted in that is the security improvement. IT departments said they saw 53 percent more security problems with older computers.

One healthcare company in Calgary, Canada, said it took technicians five days to get a patch out to just 70 percent of computers. With Vpro, which has automated remote update capability, it could patch almost all of the computers in just four hours. That translates into lower costs.

The Indiana Office of Technology, which maintains 20,000 desktops for state workers, said it installed new Vpro desktops and saw a positive return on investment of 502 percent after deploying new computers with Vpro technology. In the first year, it saw a return of $122,761 in reduced tech support visits and $1.2 million in savings over four years for reduced power costs.

I don’t expect the survey to cause a stampede to buy new computers. Many companies know they would benefit from new PCs, but they’re hurting so bad they’re taking the Band-Aid approach to new technologies.

[Energizer Bunny image credit: energizer.ca]

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