Changewave Research: Corporate PC Buying

ChangeWave Research: Corporate PC Buying

Corporate PC Buying – 90 Day Outlook:

Business PC Purchases Rising – But Will it Help Windows 7?

Overview: ChangeWave’s latest Corporate IT survey shows U.S. tech spending in the process of rapidly stabilizing – with a dramatically improved outlook for the 3rd Quarter.

The findings also point to the first uptick in business PC spending in 18 months, with a 4-pt jump in the percentage of respondents who say their company will buy laptops (71%) or desktops (68%) in the 3rd Quarter.

So what does this mean for the major PC manufacturers – and for the upcoming release of Microsoft's Windows 7?

Slight Uptick in Dell Corporate PC Market Share Going Forward

Corporate sales account for nearly 80% of Dell’s (DELL) PC business – and almost without exception Dell has been losing market share in our ChangeWave corporate surveys since it peaked back in August 2005. The current survey, however, shows a slight 2-pt uptick for Dell in planned 3rd Quarter Desktop (31%) and Laptop (30%) purchases.

All told, this represents Dell’s first rise in the business PC market in nearly 4 years – but we caution that this is coming after Dell hit its all-time low in our previous two surveys.

Apple Rises in Corporate Market

Apple’s (AAPL) corporate PC market share continues to grow, with 9% of respondents saying their company plans on buying Apple Laptops and 7% Desktops next quarter – up 1-pt and 2-pts respectively.

Both numbers represent all-time highs for Apple in the business computer market.

The data comes on the heels of our latest corporate smart phone results, which also show Apple hitting an all-time high in future market share among planned corporate purchasers – although this growth in iPhone sales is occurring primarily in small- to medium-sized companies.

In another positive for Apple, our corporate respondents estimate that 17% of their company’s workforce would choose to use Macs if it were left up to the employees – even though only 6% are currently using Macs – which points to additional growth opportunities for the Cupertino, California manufacturer.

Hewlett-Packard

Hewlett-Packard’s (HPQ) corporate PC sales appear stable going forward – with planned laptop purchases (16%) up 1-pt and desktops (16%) unchanged since our February survey.

Note that about 70% of H-P’s sales come from outside the U.S. – while our ChangeWave surveys focus primarily on the U.S. market.

Microsoft’s Windows 7 Operating System

Microsoft (MSFT) recently announced that Windows 7 should be available before the end of the calendar year, just in time for the holiday season. With business PC purchases finally rising, this would appear to be an optimal time to launch – but is the new OS ready for primetime?

In the current survey, 118 Microsoft Windows 7 beta testers were asked a series of questions on the new platform, beginning with their overall satisfaction with the MSFT Operating System:

Overall, how satisfied are you with Windows 7?

A total of 34% said they were Very Satisfied and 58% Somewhat Satisfied – a good overall rating although the Very Satisfied percentage did decline 10-pts since our February survey (note that the Somewhat Satisfied group rose 11-pts during the same time period).

Most importantly, the Windows 7 satisfaction rating remains much higher than the initial reaction to Microsoft Vista, where only 10% of Beta testers said they were Very Satisfied back in a February 2007 ChangeWave survey.

Window 7 Likes. One reason for the more enthusiastic reaction to Windows 7 lies in the introduction of a virtualized “XP Mode” – which is essentially a way to run Windows XP within the Windows 7 environment. Importantly, nearly half of beta testers (49%) say this option makes their company more likely to upgrade to Windows 7 in the future.

Other features respondents like about Windows 7 include its speed, lower system requirements and improvements in overall performance.

As Beta tester BRA03904 puts it, “Windows 7 is cleaner, faster, and has a better user interface.” RGL19684 adds “It comes with a good selection of hardware drivers, and compatibility does not appear to be a big problem.”

At a minimum, most testers agree Windows 7 is a big improvement over Vista:

· MAW64692 writes, "Works well and many of the Vista bugs are gone"

· CUR09136 writes, "Runs well on older PCs and laptops that Vista could not run on."

· HUD7578 writes, "Less resource intensive and it’s easier to integrate other software that didn't work with Vista"

· BOB0172 writes, "Very stable beta and Release Candidate 1 (RC1), and seems to execute better than Vista"

Perhaps JNR10054 summed it up best, “Windows 7 is fast and uses less memory than Vista."

Windows 7 Dislikes. The three biggest dislikes uncovered by Beta testers to date include system instability, incompatibility issues and Windows 7’s big learning curve.

SLM00554 finds the new OS is “more complex, less intuitive, and the system crashes in CADD mode."

RKZ37471 says he is having difficulties "forwarding certificates to other applications – requiring additional sign-on software," while INT8286 says using the new virtual XP mode is "very cumbersome."

In terms of training, CUR09136 finds that "changes in the interface are always hard on those who have used Windows for years, and Windows 7 has lots of user interface changes."

Impact of Windows 7 on Vista. To gauge the impact of Windows 7 on corporate upgrade plans for Vista, we asked respondents if their company was going to skip a Vista upgrade altogether to wait for Window 7 or were they going ahead with a Vista rollout.

More than half (57%) said they plan to skip Vista altogether while just 14% said they are still going ahead with a Vista rollout.

Bottom Line. In comparison to Vista, the initial reports on Microsoft Windows 7 from our Beta testers appear quite promising for the software giant. Moreover, the timing of the Windows 7 launch is fortuitous – coming at what looks to be the tail end of the recession and after the first recorded uptick in planned corporate PC purchases in 18 months.

Summary of Key Findings

The ChangeWave Research Network is a group of 20,000 highly qualified business, technology, and medical professionals – as well as early adopter consumers – who work in leading companies of select industries. They are credentialed professionals who spend their everyday lives on the frontline of technological change. ChangeWave surveys its Network members weekly on a range of business and consumer topics, and converts the information into a series of proprietary quantitative and qualitative reports.

Helping You Profit From A Rapidly Changing World ™

www.ChangeWave.com

Table of Contents

Summary of Key Findings 4

The Findings 6

(A) Corporate PC Buying Plans for 3rd Quarter 7

(B) Operating Systems 12

(D) Corporate Server Purchasing 16

ChangeWave Research Methodology 17

About ChangeWave Research 17

I. The Findings

Introduction

ChangeWave’s latest Corporate IT survey shows U.S. tech spending in the process of rapidly stabilizing – with a dramatically improved outlook for the 3rd Quarter.

The survey, conducted May 11-20, 2009, was composed of 1,849 corporate IT buyers.

So what does this mean for the major PC manufacturers – and for the upcoming release of Microsoft's Windows 7?

(A) Corporate PC Buying Plans for 3rd Quarter

Here are the survey results on corporate PC buying plans for the 3rd Quarter.

(FOR THOSE COMPANIES BUYING COMPUTERS IN 3RD QUARTER 2009) Who is the manufacturer and what computer type(s) is your company planning on buying? (Check All That Apply)

Desktops

Current Survey May ‘09 / Previous
Survey
Feb ‘09 / Previous
Survey
Nov ‘08 / Previous
Survey
Aug ‘08 / Previous
Survey
May ‘08
Dell - Desktop Computer / 31% / 29% / 29% / 31% / 31%
Hewlett-Packard (including Compaq) - Desktop Computer / 16% / 16% / 14% / 15% / 15%
Apple - Desktop Computer / 7% / 5% / 5% / 5% / 6%
Sony - Desktop Computer / 0% / 0% / 0% / 0% / 0%
Lenovo (formerly IBM) - Desktop Computer / 5% / 5% / 5% / 5% / 5%
Acer (including Gateway and eMachines) - Desktop Computer / 2% / 1% / 1% / 1% / 1%
ASUS - Desktop Computer / 1% / NA / NA / NA / NA
Other - Desktop Computer / 2% / 2% / 2% / 2% / 3%
Don't Know / 7% / 5% / 6% / 5% / 7%
Not Buying Desktops in 3rd Quarter / 32% / 36% / 36% / 33% / 32%

Laptops

Current Survey May ‘09 / Previous Survey Feb ‘09 / Previous
Survey
Nov ‘08 / Previous
Survey
Aug ‘08 / Previous
Survey
May ‘08
Dell - Laptop Computer / 30% / 28% / 28% / 30% / 32%
Hewlett-Packard (including Compaq) - Laptop Computer / 16% / 15% / 13% / 14% / 14%
Apple - Laptop Computer / 9% / 8% / 7% / 7% / 8%
Sony - Laptop Computer / 1% / 1% / 1% / 2% / 2%
Toshiba - Laptop Computer / 4% / 3% / 3% / 3% / 4%
Lenovo (formerly IBM) - Laptop Computer / 10% / 10% / 10% / 10% / 10%
Acer (including Gateway and eMachines) - Laptop Computer / 2% / 2% / 1% / 2% / 1%
ASUS - Laptop Computer / 1% / NA / NA / NA / NA
Other - Laptop Computer / 1% / 1% / 2% / 1% / 1%
Don't Know / 7% / 5% / 6% / 5% / 7%
Not Buying Laptops in 3rd Quarter / 29% / 33% / 33% / 32% / 29%

Slight Uptick in Dell Corporate PC Market Share Going Forward

All told, this represents Dell’s first rise in the business PC market in nearly 4 years – but we caution that this is coming after Dell hit its all-time low in our previous two surveys.

Apple Rises in Corporate Market

Both numbers represent all-time highs for Apple in the business computer market.

Of the employees at your company who use a computer, what percentage would you say currently use an Apple computer? (n=839)

Current
Survey
May ‘09 / Previous
Survey
Feb ‘09 / Previous
Survey
Nov ‘08 / Previous
Survey
Aug ‘08 / Previous
Survey
May ‘08
Consensus Estimate / 6% / 6% / 6% / 6% / 5%
Current
Survey
May ‘09 / Previous
Survey
Feb ‘09 / Previous
Survey
Nov ‘08 / Previous
Survey
Aug ‘08 / Previous
Survey
May ‘08
None / 56% / 58% / 58% / 57% / 61%
1-2% / 17% / 15% / 16% / 17% / 17%
3-5% / 9% / 9% / 7% / 8% / 7%
6-10% / 6% / 6% / 6% / 6% / 6%
11-20% / 4% / 4% / 4% / 3% / 3%
21-30% / 2% / 2% / 1% / 2% / 2%
31-40% / 1% / 2% / 1% / 2% / 1%
41-50% / 2% / 1% / 2% / 1% / 1%
51-60% / 1% / 0% / 1% / 0% / 1%
61-70% / 0% / 0% / 1% / 0% / 0%
71-80% / 0% / 0% / 0% / 0% / 0%
81-90% / 1% / 0% / 0% / 1% / 1%
91-100% / 2% / 3% / 2% / 2% / 2%

And if employees could choose their own computers, what percentage do you think would choose to use an Apple computer? (n=743)

Current
Survey
May ‘09 / Previous
Survey
Feb ‘09 / Previous
Survey
Nov ‘08 / Previous
Survey
Aug ‘08 / Previous
Survey
May ‘08
Consensus Estimate / 17% / 19% / 19% / 18% / 18%
Current
Survey
May ‘09 / Previous
Survey
Feb ‘09 / Previous
Survey
Nov ‘08 / Previous
Survey
Aug ‘08 / Previous
Survey
May ‘08
None / 19% / 18% / 18% / 18% / 19%
1-2% / 11% / 8% / 8% / 8% / 9%
3-5% / 10% / 11% / 12% / 12% / 10%
6-10% / 18% / 15% / 16% / 18% / 18%
11-20% / 14% / 14% / 12% / 12% / 12%
21-30% / 9% / 11% / 10% / 10% / 7%
31-40% / 4% / 5% / 6% / 6% / 7%
41-50% / 5% / 6% / 5% / 5% / 6%
51-60% / 4% / 4% / 4% / 4% / 3%
61-70% / 1% / 2% / 1% / 1% / 2%
71-80% / 1% / 2% / 2% / 2% / 3%
81-90% / 1% / 1% / 1% / 1% / 1%
91-100% / 4% / 3% / 4% / 3% / 3%

Hewlett-Packard

Hewlett-Packard’s (HPQ) corporate PC sales appear stable going forward – with planned laptop purchases (16%) up 1-pt and desktops (16%) unchanged since our February survey.

Note that about 70% of H-P’s sales come from outside the U.S. – while our ChangeWave surveys focus primarily on the U.S. market.