Do PCs Matter?

By Jeff McNaught
published: Thursday, August 27 2009

In 2003, Nicholas Carr dropped a bombshell on the technology industry with the simple question: Does IT Matter.  The thesis of his original Harvard Business Review essay was that the power and pervasiveness of IT functions was transitioning from "strategic resources" to "commodity." And furthermore that IT capability no longer was a factor that set a company apart.  Now, IT is simply a cost of doing business, like heat, electricity, and doughnuts.

It was a provocative argument that hit a nerve in the industry, and one that I've come to reconsider recently in the light of declining PC sales.  While some believe that an ongoing decline in PC sales is owing to largely economic forces, I would argue that the economy is disguising a deeper problem in the PC industry.  I believe that the fundamental value proposition of a PC is being undermined by advances in virtualization and cloud computing, combined with consumer and enterprise backlash at costly PC replacement cycles.

Carr's original essay doesn't use the term 'cloud computing' but his remarks on leading technology vendors "trying to position themselves as IT utilities" are in the same spirit.  Nor does he refer to virtualization technology, but I believe that virtualization is the means by which legitimate cloud computing is becoming practical, and why it is inevitable.

There are three factors at play in this inevitable march toward a virtual client: the decoupling of power and proximity, advances in PC replacements, and a growing recognition - galvanized by a troubled economy - of the hidden costs of PCs.

Just as early manufacturers gained a strategic advantage by building plants in close proximity to power sources, as Carr points out, so too did PC processing power.  As the PC market hits its stride, business and home users alike suddenly had undreamed-of processing power in their hands.  As a result, innovation, creativity and productivity all increased.  But just as the move to transmission and distribution of electrical power undermined the strategic advantage of plant proximity to power sources, the rise of the Internet has been slowly but surely undermining the business and personal benefits of local processing.  Today's user, both personal and professional, makes use of countless applications and Web services; to the point that the processing power of a PC is undermined by its own local storage -the hard disk.  The best operational day with your PC is the day you first use it, and as you add all those local applications, it slows, becoming less reliable.  Once you drive a PC off the lot, so to speak, the business value of the hardware takes a free fall.

What's kept the PC market growing, in general terms, is the lack of real competition.  Carr faults businesses for being "passive in their purchasing" when it comes to their PC strategy, stating:

"Every year, businesses purchase more than 100 million PCs, most of which replace older models. Yet the vast majority of workers who use PCs rely on only a few simple applications - word processing, spreadsheets, e-mail, and Web browsing.  These applications have been technologically mature for years; they require only a fraction of the computing power provided by today's microprocessors."

This is where I would disagree with Carr.  While there is a market for what he describes (we refer to these as 'task workers'), it's a relatively small market.  People want their computers to do all the things computers are capable of doing.  They will settle for limited functionality only if their employer mandates it.  Furthermore, today's task workers aren't limited to simple applications.  Until virtualization software matured, virtual desktops simply weren't up to the task of delivering all of the applications that individuals required.  In addition, the PC vs. Mac delineation is evaporating.  In a cloud computing environment, the specific hardware in the back end doesn't matter.  This is why data center software is key and increasingly a mixed environment.  That maturation is here today and is why I believe virtual desktops have reached a tipping point.  Consider a call center representative for a company such as Jewelry Television.  The CSRs there are watching a live feed of what's being broadcast on the television channel - only they're not using PCs.

The third factor at play in the growth of virtual clients is the growing recognition of the hidden costs of PC ownership.  While PC prices continue to go down, maintenance costs have not.  As one of our customers recently remarked: "It wasn't the upfront cost of PCs that made us turn to virtual desktops; the prices of PCs continue to drop and are seemingly attractive.  The long-term implications of PC upkeep, however, are substantial. You could offer me an entire fleet of free PCs and it still wouldn't make sense economically. The maintenance costs over time are too much to bear."  In a troubled economy, businesses are finding that IT can reduce costs and improve performance by replacing PCs with virtual clients.  Users also want ubiquitous computing, which is another limitation of PCs.  While they are more mobile than ever, if you want always-on access to your files and applications, you simply can't limit all of those files to one device.  You don't want your PC on all the time and you won't always have it with you.  Computing today requires multiple entry points - smartphones, PCs, virtual desktops, etc. - all accessing the same information.

Microsoft has been kind enough to let me play with Windows 7 and I was recently installing the RTM version on my home computer (at my house, there's one computer and several virtual clients, kitchen, living room, bedroom, etc.).  I was in the midst of the install when I had an epiphany.  For the first time ever, once I installed Microsoft Office, I didn't need to install anything else.  My everyday applications are already hosted; business applications and files as well as my personal data, including Quicken (how's that for trusting cloud computing).  From what I've seen so far, Windows 7 absolutely rocks, but to me the OS and the applications we base our digital personal and work lives on are no longer intertwined.  At work, I'm already fully cloud compliant.  At home now, the OS is still local but the apps and data is with my trusty cloud provider.  It felt to me like perhaps the final brick in the wall for my PC.

In 2003, Carr wrote that "When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides."  For computer users at home, the benefits of the PC still outweigh the risks because the consumer infrastructure simply isn't there yet.  For enterprises, however, the clouds are obscuring the remaining benefits to PC ownership.  PCs no longer provide a strategic advantage to a business or consumer.  Rather, it is the software and its capabilities hosted by the PC -- not the collection of plastic and circuitry that it encompasses -- that helps today's business succeed.  And those capabilities, for many, are better delivered in an anytime, anywhere access model that is increasingly cloud-based.  The value proposition for PCs - bluntly put, a chunk of hardware with a short life span, relatively high energy cost, and a propensity to fail - will continue to decline.

Breaking the Cycle of PC Addiction , Wyse