Further growth is expected in desktop management and outsourcing deals in 2004, driven partly by a new wave of PC refreshment. The IT spending slump has elongated PC refresh cycles beyond the recommended three years, and there are a lot of PCs in organizations still running outdated versions of Windows.
Many IT departments will need to update their platforms over the next two years.
IBM [IBM] Global Services and EDS [EDS] have targeted desktop outsourcing with renewed vigor in recent months, while Dell [DELL], a services newcomer but a giant in its own right, is also targeting the market aggressively.
Both EDS and IBM GS have announced new utility-based pricing models for their desktop services, while Dell recently launched its desktop services for large clients in Europe, and revealed plans to pilot such offerings for small and medium-sized businesses early next year. HP has announced its arrival as a major force in the space following its $3 billion contract win with Procter & Gamble [PG] that will involve it managing desktops for the manufacturing company across 160 countries.
The cost of managing a desktop has fallen over the past year, partly due to the intense competition between service providers, with Hewlett-Packard [HPQ] and Dell pushing more established players such as IBM, EDS, and Computer Sciences Corp [CSC]. But the sector continues to grow, driven by the increasing number of clients looking to reduce costs in their non-core IT infrastructure through managed services and outsourcing initiatives.
This growth, far beyond other sub-sectors of IT services such as the stagnant consulting and systems integration markets, is one of the main factors that has turned the big players’ attention back to desktop outsourcing – despite the fact that such services encompassing help desk, desktop procurement and installation, break and fix support, and network management, are comparatively low-margin and commoditized.
There are a number of reasons why this market has relit a fire under the big players. First, desktop outsourcing is a great route into the growing number of organizations that are turning to outsourcing for the first time, driven by the economic downturn. Second, recent technological developments such as client self-service, remote management, and self-healing technologies, have all contributed to make it easier to generate economies of scale in the desktop management business.
This article is based on material originally published by Computerwire.