Why PC-as-a-Service is the next big thing

Since traditional PC sales are shrinking -- and will continue to do so for the next decade or more -- what are PC vendors to do? Simply put, they need to sell buyers on PC-as-a-service (PCaaS). Here's why.

PC sales stink, but hope for bottom remains

Analysts aren't shocked by the PC market declines in the first quarter and expect enterprise upgrades to partially save the day in the second half of 2016.

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As I noted a couple of weeks ago:

  • There are 2 billion Android devices in use.
  • Apple says there are 1 billion iOS devices in use.
  • There are about 1.4 billion PCs in use (including about 100 million macOS systems)

So there are around 4.4 billion devices with processors and operating systems in use, and less than a third of them are traditional PCs.

And except for a couple of sales spikes, PC sales -- including notebooks -- continue to trend downward. Despite the naysayers, the world has discovered that you CAN do real work on a phone or tablet, and the devices can be really cheap. The rest of the world likes really cheap.

The vendor conundrum

It used to be that upgrading your PC every few years was a no-brainer. CPUs and storage got faster, memory capacities kept growing, operating systems kept improving, and displays got crisper and faster, as well as cheaper. But that stopped about five years ago, which is part of the reason for the PC sales slowdown. Why buy a new machine that is hardly any better than what you've got? 

But that dynamic is still working in the smartphone and tablet markets today, with the added benefit of having a much wider feature set to promote to consumers: better cameras, longer battery life, faster and more flexible processors, many new apps, better displays, faster wireless. These give buyers many reasons to upgrade, and that gives vendors the financial incentive to keep investing in improving smartphone and tablet technology. Given the stagnation of PC technology, how are vendors going to persuade users to upgrade? 

 Three ways:

  • Make it simple, like the smartphone annual upgrade plans.
  • Make new systems fashionable, with more colors, materials, and form factors.
  • Adding new features, such as cellular connectivity.
  • Use returned systems to penetrate price sensitive markets, turning smartphone users into PC users.
  • Finally, offering PCs as a service, including tech support, which will be especially attractive to business users.

Making it simple to upgrade will be the hardest part for Wintel vendors. It is easy to upgrade to a new iPhone, transferring local data and apps, and accessing all your iCloud data once you're logged in. 

That is alien to the PC mindset, which continues to rely on new versions of Windows to drive upgrades. You've no doubt heard that many users don't want to install OS upgrades because they're too disruptive. That has to stop.

The Storage Bits take

PCaaS will require major mind shifts by vendors and, to a lesser extent, users. Many users have embraced annual phone upgrades, and as long as the innovations keep coming, will be happy to continue. 

Pro users may be more difficult, as the greater customization many require will militate against appliance-like drop-in upgrades.

But vendors can't hide from the fact that most people are using tablets and phones for doing real work. They have to make the PC upgrade experience competitive with smartphones - which is what PCaaS will help them do. 

Courteous comments welcome, of course.