Jun 20 2016

What Does a Slower PC Upgrade Cycle Mean for Small Businesses?

Holding on to older notebook and desktop computers for longer means more money for other IT investments but also brings security risks, according to an analyst.

Intel CEO Brian Krzanich said earlier this month that the “replacement cycle for the PC has extended. Four years was the average. Now it has moved to about five to six years.” For small businesses, that development is both a blessing and a curse.

On one hand, small businesses save money by waiting to update PC hardware and can use that money to make investments in cloud, mobile and other technology solutions. On the other hand, hanging on to legacy notebook and desktop computers can increase companies’ security vulnerabilities stemming from outdated software, according to Ray Boggs, vice president of small and medium business research at IDC.

Intel needs to work on releasing the right chipset and technology innovations so that people will be motivated to upgrade PCs quickly and easily, Krzanich said at the Bernstein Strategic Decisions Conference in New York, according to the IDG News Service. “Right now, it's easier to move your phone to a new phone than your PC to a new PC,” he said. “We've got to go fix some of those things.”

Reasons Behind the Slowing Upgrade Cycle

Krzanich indicated that one of the main reasons the timeline for PC upgrades has lengthened is because older Intel-based PCs can still capably run new software, such as Microsoft’s Windows 10.

Boggs agreed with that assessment, and in an interview with BizTech, he added that unlike in the past (when upgrades to Intel chipsets coincided closely with upgrades to Microsoft’s operating systems), hardware performance upgrades now aren’t needed as much.

Small to midsize companies also tend to generally wait until the last possible moment to upgrade hardware and software, Boggs said, with the mindset being, “if I don’t have to change something, I won’t. They’re always squeezing the last bit of life out of the technology they’ve got, especially because it’s already paid for and people know how to use it.”

Another reason why PC upgrades may be slowing is because businesses are investing more in smartphones, tablets and other mobile devices, which need to be replaced sooner and where technology advancements matter more, Boggs says.

Additionally, some users may not need a desktop or notebook PC to do their jobs effectively and can rely on tablets or smartphones instead, Boggs adds. Those who create documents and spreadsheets or work in professions such as law or accounting are more likely to need a PC, he says. “It’s getting almost function- or role-specific in terms of what capabilities you have,” he says.

The Implications of Waiting

One effect of a slowing PC upgrade cycle is that it gives companies more money to invest in cloud software, such as Microsoft’s Office 365, which will create a shift from traditional spending patterns to alternative approaches, Boggs says. That will include new ways to access and deploy software, especially via the cloud.

Small businesses are facing increasingly competitive economic environments, and customers who are expecting more, and thanks to e-commerce, they need to compete with much larger enterprises, Boggs says. As a result, small businesses need to work smarter and more productive, pushing them to invest in technologies that sharpen business processes, such as mobility and cloud.

“It won’t be an investment in the same old stuff,” he says. “It will be an investment in new stuff that allows me to be even more effective in getting my job done.”

According to an IDC survey from November 2015, 39.8 percent of small businesses with 100 or fewer employees said their top 2016 technology spending priority was upgrading or adding new PCs; 26.8 percent pointed to security enhancements as their top priority, and 16.6 percent cited cloud resource enhancements. For companies of 100 to 99 employees, 49.3 percent said their top priority would be upgrading or adding PCs.

Companies may know they need to upgrade PCs but are prioritizing other IT spending first, including addressing network security vulnerabilities, Boggs says.

However, delaying PC upgrades can lead to security issues. Small businesses may be able to push PC upgrades by a year, Boggs says but pushing much beyond that could create software compatibility issues. “That becomes a false economy,” he says. “I end up paying more for it in the long run in terms of vulnerability or poor performance results.”

Small businesses used to see security as a cost to minimize, Boggs says, but adding security now makes it possible to have cloud-based resources and more mobile devices. “You don’t want to cheap out on security,” he says.


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