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When Should SMBs Replace Older PCs?

HP's director of SMB marketing, Brian Burch, discusses the pent up demand for new technology in many smaller businesses and how some SMBs are moving aggressively to seize new opportunities.
InformationWeek SMB: With mobile becoming more important, how do expect the balance of notebooks to desktops to play out in this refresh cycle? Do you expect to see a significant shift toward the notebooks as we've seen in the consumer segment?

Burch: I think it's going be significant, but not shocking. Historically, in the commercial markets it was around 60% desktop, maybe 40% mobile, I think you might see those numbers flip. I think that we've probably hit 50-50 already and I think in this refresh cycle, it'll probably be 6 notebooks for every 10 units bought. But I do not think it's going to be 8 and 2, because if you think about a lot of the applications of a PC, in a lot of different types of businesses, mobility isn't necessarily a virtue everywhere. One example might be a doctor's office. You don't necessarily want some of the office staff taking their computer home at night because that could create issues with patient records and stuff like that. There's a rich set of scenarios or use cases that we and everyone else have obsessed over, but there's a lot of applications for fixed desk space systems.

InformationWeek SMB: Now what about netbook phenomenon? The price points are driving significant interest, but are you seeing any businesses making an investment in netbooks or are they more ancillary equipment or, perhaps, a passing fad?

Burch: I think analytical data on that topic is hard to find, to be honest. But I'll offer a personal opinion. Let's equate it to the data we do have. We know that the average age of virtually everything in use in the SMB has been rising dramatically over the past couple of years. Without statistics I can point to, I think that use of netbooks in SMBs has happened and will continue to happen. I think some of that choice was driven necessarily in the last year or two by the fact that in the teeth of an economic downturn right, the great recession let's call it, technology becomes so important to so many different business practices that you couldn't turn to an employee who has a four and a half year old computer that doesn't work anymore and say: "Gosh, you know times are really tough then. If you could just hold out until 6 months from now and then I'll get a you a new computer. Maybe you could pull out pad and paper until then and just live without a computer until our finances get a little bit stronger." That just isn't an option. You can nurse a computer along that's working properly, but if something needs to be replaced and it doesn't work any longer, you can't say that. That's the lowest common denominator. I have to get a computer for this employee, and this may not be the perfect fit for what that person needs to do, but it's what I can afford right know.

Now in some business or verticals, like real estate, it make sense. You could easily imagine a real estate professional having a full-powered notebook to take with them when they're going to sit all day at an open-house with Wi-Fi from the homeowner, and you can imagine that same person having a netbook that they would carry with them when they're driving around showing another client homes. Both those products have huge utility for the business professional because they spend a good chunk of time someplace other than the office. They need a full performance 15-inch notebook product and since they spend time in the car traveling around and still need a connection to the internet, but maybe more than just a smart phone screen, that's where you could imagine a netbook/notebook tandem.

InformationWeek SMB: Let's close with a final questions about how SMBs are faring right now. From your perspective, Is now a good time to be an SMB? Is there opportunity on the horizon or are we still in the foxholes with our heads down?

Burch: I think there's some cautious optimism, but there's a ton of aggression. Typically successful small businesses were challenged to make it through this great recession so I'm sure there's been some winnowing of the field. We see a lot of aggression from people who recognize opportunity. They have less competition than they had before because some people didn't make it. Current customers are starting to inquire again, so businesses are starting to signal that maybe something's going to happen and that has many SMBs thinking in an aggressive mindset. They can't spend money or hire people yet, so you're not going to see a lot of growth in terms of employment yet and they're going to be very prudent about investments that they make and they are really focused and aggressive about coming out of this thing with a really full pipeline and really getting rolling. They're seeing that there might be some spectacular growth opportunities ahead and you know, to the early bird that goes the worm, right? So, I think you're starting to see some people read the signals.

Another thing that I would mention to you that we've been tracking for quite a while now is literally gigantic growth in new business starts because this great recession is the first time since World War II that the white collar work force in the US ever declined. Previous recession's unemployment members were all in the blue collar work force and so we've seen a lot of data throughout 2009 that says for the first time ever the white collar workforce experienced a decline in terms of employment and so you have a lot of very business savvy, highly educated, well resourced people who saw their industry contract by 20-40%. A lot of those jobs are never coming back and so these people are entrepreneurs almost by accident.

We've seen data from Forrester that says the number of business starts in the US is going to be 50% over historical norms per annum because of these accidental entrepreneurs that are kind of flooding the system and building very intelligently designed companies that have a very significant IT foundation. These people are not going to build cabinets, they're going to go after something web-based, they are going to use these white collar worker skills that they've developed and their graduate educations. So that's an exciting prospect and for the SMB community, it's new blood entering the space. The recession didn't work out so well for some of the companies that were little less well positioned and now there's a new wave of competition and I think the best and brightest are really going to get out ahead of it.


Benjamin Tomkins is editor of InformationWeek SMB.
Follow him on Twitter @ http://twitter.com/benjamintomkins


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