Techaisle Blog

In 1818, John Keats, the famous romantic lyric poet wrote “a thing of beauty is a joy forever”. Two centuries later I opened the Dell XPS 13 9300 packaging to behold the beauty of a PC notebook. I let the XPS 13 sit on my desk for three days, lest I may spoil the serenity of the frost white / alpine white composite fiber chassis. But use it and review I must.

As an SMB analyst, I decided to evaluate the notebook through two lenses – the SMB and home user. Consumers & SMB employees already overlap in their use of technology usage between work, home, anywhere. Dell XPS 13 is a right-fit for both. The latest model that I am using is Intel 10th Generation i7 (Comet Lake six-core processor), 1TB SSD, 16GB RAM and FHD+ display.

The difference between the new Dell XPS 13 9300 and the older version XPS 13, which I am used to, is like chalk and cheese. Besides look and feel, power and productivity seem to be the core design tenets of the newest model. Productivity enhancement begins with the four-sided InfinityEdge 13.4" FHD+ Touch anti-reflective 500-Nit display. The original 16:9 screen has been replaced with 16:10 which as per Dell has 91.5% screen-to-body ratio. As a result, the 19.5mm bezel at the bottom of the display which used to house the webcam has been reduced to 4.6mm giving the entire screen an edge-to-edge display. PowerPoint and Excel or Excel and Word or PowerPoint and Word are three of the applications that I use side-by-side most often. With the new aspect ratio, I feel that I am successfully tricked into achieving better productivity because of more screen real estate. Working from home, my XPS 13 notebook is usually connected to Dell UltraSharp 27-inch monitors via a Dell dock but I remain productive even during my occasional trips to other rooms of my home (in the absence of travel). When I have to look at data all day long, full screen brightness works great for me – both indoors and outdoors.

In addition to a taller display, the edge-to-edge keyboard with larger keycaps and touchpad add to a productive experience. The left and right arrow keys are full-size, bigger than in previous models but the up and down arrow keys are still annoyingly narrow and tiny. The page up and page down keys are gone but I do not miss them. Normal travel of the keys makes for comfortable typing for both one-finger and ten-finger typists. The keyboard backlight is nice but the color against composite alpine keyboard deck threw me off initially because the contrast is unnoticeable. There is a slightly higher light bleed under the “U” key than other keys which leads me to believe that all keys may not be seated uniformly. But I am just nitpicking. It does not in any way hinder the performance, likeability and experience of the notebook. After many days of use I have managed to reprogram my muscle memory to look for delete key one space to the left because its rightful place has been taken over by the power button / fingerprint reader (which is easy to reach, perfect size and not bothersome and incredulously placed on the side in the Dell Latitude 7390). The glass touchpad is not only smooth but is also big in a small-sized notebook. In the absence of left-right click buttons the physical switch works great for me which I prefer over a haptic sensor (present in some PC brands). The ample space for palm rest is one of the best experience design elements of the keyboard.

Look back

As is the case in each year’s SMB research, Techaisle SMB survey respondents are asked to detail their plans for acquisition of different types of client devices. Two of the major categories investigated by the surveys are desktop PCs and notebook PCs. To establish a baseline understanding of PC use and demand, Techaisle asks SMB respondents to specify the number of endpoint devices that are currently in use within their companies, and then asks them to specify the quantity that they are planning to buy over the next twelve months. To provide actionable insight to our clients, the question asks separately about desktop PCs, notebook PCs and tablets. While 2016 survey is in the field it is worth looking at the trends of last two years. In 2014, both the US small and midmarket businesses were bullish about new desktop and notebook purchases. But in 2015, the percent of US SMBs planning to buy PCs had dropped by 40% from 2014 for both desktops and notebooks. However, although the average number units of desktops planned to purchase dropped from 2014 to 2015 the average number of notebooks planned to purchase increased substantially from 2014 to 2015.

Many desktop buyers were motivated to replace existing units because they were reaching end-of-life and take advantage of Windows XP upgrade path. Desktops are also more of a planned/budgeted item than other client form factors (notebooks, tablets), meaning that desktop acquisitions are more likely to appear in formal purchase plans than the mobile units, and less likely to be acquired on an ad hoc basis. Notebooks are usually ad hoc purchase items – meaning that they would be underrepresented in research of this sort relative to desktops. Additionally many users upgrade their notebooks over time (to replace damaged units, to get features like touchscreen, to obtain lighter or smaller products, etc.).

However, corporate purchase intentions do not provide a complete perspective on mobile device acquisitions.

Potential Impact of BYOD on US SMB PC Purchases

Figure below presents a perspective on corporate purchase plans and the impact of employee purchases of notebooks. The top two sections of the table, shaded in green, illustrate the proportion of businesses by employee size reporting desktop and/or notebook purchase intentions, and the number of units that they plan to acquire. These figures are used to prepare a “net increase” figure – the average number of new units expected to be deployed by businesses in each employee size category. These two grey sections are followed by a line of percentages, shaded in purple, which shows the ratio of corporate desktop purchases to corporate notebook acquisitions. It shows that microbusinesses with 1-9 employees are much more likely to be buying desktops than notebooks, and that other SMBs are planning to buy 25% to 99% more desktops than notebooks.

The next section of the table, shaded in blue, begins with the BYOD penetration statistics that appear at the bottom of the figure. It then calculates the impact on notebook purchase intentions if this ratio is fully reflected in notebook purchases (the “at 100%” line) and if employees were to buy notebooks at half of the BYOD penetration rate (“at 50%), showing both corporate and employee purchases of these devices. These revised figures are used to calculate the desktop to notebook PC purchase proportions shown in the second set of purple-shaded cells. Here, we see that if employee purchases of notebooks are equivalent to current BYOD penetration levels, new notebook units would be about equal to new desktop purchases in most employee size segments, while a 50% scenario would result in ratios ranging from about 1:1 to 1:6 in all but the smallest employee size category.

 

Techaisle’s SMB research on Tablets, PCs and Smartphones usage has found that 28 percent of SMBs are aware of 2-in-1 PCs, and 15 percent are considering purchase in the next one year.  Marketers have done a generally good job of building awareness which is highest at 73 percent within the 500-999 employee size businesses in the US. However, marketers have not succeeded in creating consideration to purchase from awareness within mid-market segments.

Globally there are 265 million mobile SMB employees who are telecommuting, traveling and/or using cloud-based services.  The potential market is therefore massive. However, most SMB employees are already two-device users and are on their way to becoming a three-device user as they gain power of device choice, bringing personal experiences to work and vice-versa. The odds of a tablet and notebook both needing to be refreshed at the same time is low, and therefore it may be difficult to position a 2-in-1 PC as a replacement for either device. Nevertheless there are seven different potential market opportunity segments and each of these seven opportunity areas has scenarios in which 2-in-1 PCs might gain share – but each has its challenges.

The SMB survey data also indicates that general-purpose devices are losing ground to task-specific devices, a trend that would negatively impact middle-ground opportunity. Further, 2-in-1 PCs will likely be at a price disadvantage to Android PCs, which will begin targeting this same niche. PC OEMs will need to position the benefits of both the 2-in-1 PCs and their unique approach to these devices, while attempting to avoid the confusion that has hampered progress in the SMB market to date.

When we sift through the data on different perspectives on 2-in-1 PCs’ positives and negatives, we see that there are some core strengths to build upon, but that some design changes will be needed before these products can make a serious run at the endpoint device (PCs, Tablets, Smartphones) market’s middle ground. The moving parts needed to enable a 2-in-1 are also viewed as a drawback/potential point of failure for these products. And the overall diversity of approaches to enabling 2-in-1 functionality – ranging from detachable displays to Ferris wheel, flip/fold, swivel/twist and slider-based approaches – has confused the market. Too many options in the marketplace provide choice but also cause purchase inertia. This is a high-stakes issue for 2-in-1 PC OEMs and those with successful designs stand a much better chance of growing with the market than those whose designs are marginalized.

The aggregate opportunity for 2-in-1 PCs is compelling but there is no aggregate marketing strategy that will capture this opportunity. PC OEM marketers will need to align with the market opportunity segment that they can best develop, and ensure that their message and activity content is consistent with the conditions that govern the target area.

The 2-in-1 market is an attempt to fill a ‘middle ground’ that has been created by the trend towards multi-screen endpoint device strategies. Techaisle’s research shows a usage continuum of endpoints. On one side, there are desktop devices capable of creating content. At the other end of the spectrum, there are smartphones that lack the tools needed for content creation, but provide a lightweight, mobile option for content consumption. On this continuum, tablets are also primarily consumption devices, but can be used for light content creation, while laptops are capable of creating content, and can be used as a mobile consumption port. 2-in-1 devices are targeting the space between tablets and laptops. They are attempting to provide better creation options than are found with tablets, while offering a form factor better suited to consumption than is found with traditional laptop.

Techaisle believes that the key to 2-in-1 PC success within the SMB market will be the ability to articulate the benefits of the “middle ground” – the combination of consumption and creation that 2-in-1 PCs can address better than either tablets or traditional laptops.

More detailed data is available in Techaisle’s report titled “SMB End-Point Device Adoption Trends: Tablets, PCs, Smartphones” which covers:

• Current and Planned purchase Intentions of client devices: Tablets, PCs, Smartphones
• Current and Planned Tablet OS & Application adoption trends
• BYOD trends within SMBs
• XP, Windows 8 refresh intentions
• New OS PCs: Chromebook, Android adoption trends
• Converged Mobility PCs trends: 2-in-1 PCs
• Purchase Channel and Sources of Information

To set the context for a BYOD discussion Techaisle’s survey on end-point technology status of SMBs provide an intriguing set of statistics through which we can assess recent endpoint trends. BYOD is clearly a major force in the US SMB market. BYOD purchases accounted for 13% of all new laptops, 17% of all new tablets, and 22% of all new smartphones purchased by US SMBs in 2013. This creates challenges for both IT management, which needs to establish methods of managing these devices, and for suppliers, who need to work with SMBIT to secure their position in the main endpoint categories, and also appeal to business managers and individual buyers to ensure that they are not left out of a major portion of the market. Techaisle’s SMB End-point survey data shows that approaches to BYOD –brand selection, reimbursement, application download and support – vary with employee size, with small SMBs leaving most of the decision, cost and support to individual users, and larger SMBs tending to involve business and/or IT management in these activities.

The survey data also shows that overall frequency of device purchases, which speaks to the erosion of the notebook market as emphasis shifts to alternative screens; in 2013, a higher percentage of US SMB employees were using tablets and smartphones than notebooks purchased within the year.

Suppliers need to recognize the distinctions that are apparent across employee size categories, and structure their offerings accordingly. IT vendors courting the very small business (1-19 employee) segment should recognize that employees are most likely paying for and supporting these devise themselves; as a result, IT vendors will need to offer financing and vendor/carrier-supplied, business-grade support options. In larger SMBs, specifically, mid-market businesses, funding and support is more likely to come from business and IT management; in these segments, OEMs are advised to establish programs that make it easy to onboard, secure and support new devices and users. In both cases, there are gaps in policies; suppliers who help businesses to establish and implement effective BYOD practices may be able to position their products favorably as a result.

SMB employees driving much of the activity is also creating sales and marketing challenge for suppliers: opportunities to sell brands and configurations that are outside corporate specifications, and challenges in aligning channel strategies to a market that includes both IT and individual employees (business management) as important buying groups.

Within the SMB context, BYOD itself comes in several ‘flavors.’ Techaisle survey data shows that on hand an SMB employee both selects and pays for a new device, delighting the CFO, but causing problems for IT. On the other, the SMB employee pays for the device, but selects it based on guidelines or an approved list – an approach (referred to in some cases as CYOD) that appeals to both the CFO and IT, but might not be completely satisfactory for the employee. BYOD can take any one of these paths and add some level of reimbursement for the purchase from the company and/or technical support for the devices, which has both upside (because the employee selects technology that he/she is comfortable with) and downside (the cost burden rests, at least to some extent, with the company rather than the employee) for the SMB business owner. And regardless of the approach chosen, some SMBs are instituting formal contracts that provide them with authorization to secure and (if necessary) ‘wipe’ employee-owned devices.

Who selects the BYOD brand?

The most critical BYOD question for IT manufacturers revolves around brand selection: is it done by the employee or the employer? Survey data shows that the answer depends largely on the size of the SMB business.

Who pays the BYOD bill?

One of the contentious issues in BYOD is the matter of responsibility for funding the device purchase. Many employees view BYOD as an attempt by their SMB employers to shift costs from the business to its staff. Many SMBs, on the other hand, see BYOD as a means of ensuring that employees have access to the technology that they like best. Some employers view paying for the devices as a means of building goodwill with staff (and/or as a means of building a basis for exerting management control over the devices), while others believe that simply allowing the devices to be connected to corporate assets represents contribution enough.

Who is responsible for BYOD support?

In our survey, we asked respondents to identify the ways in which their organizations support BYOD devices. The findings provide a fascinating insight into the ways in which BYOD devices are integrated into the corporate endpoint portfolio from no support at all to commitment to full integration of BYOD devices.

What is the policy with respect to app downloads on BYOD devices?

One of the key employee benefits associated with BYOD devices is that employees have a platform on which to run personal applications. What, though, is the implication for business applications? Are employees free to select any app that they choose, or should the business play a role in directing or determining the selection of business apps? Results from the survey suggest that the degree of formalization associated with app selection and installation varies from no formal policy to a very structured approach.

Is there a contract in place to govern BYOD use?

The final BYOD issue investigated by our survey related to the creation of contracts between employers and employees. Techaisle considers these contracts to be important to the success of BYOD strategies, as they provide explicit employee agreement to IT activities necessary to safeguarding corporate apps and data and we expect that this will become standard HR practice in BYOD-friendly SMBs over time.

About the Report

Coverage:

• Current and Planned purchase Intentions of client devices


• Tablet OS & Application software adoption – Behind the Screen


• BYOD: Employers vs. Employees, or Micros vs. Larger SMBs?


• Across the OS generations: XP, Windows 8 refresh intentions


• The Android Opportunity: Google in the PC Market


• Converged Mobility PCs: 2-in-1 PCs


• PC Purchase Channel and Sources of Information

More details about the report can be found here.

Related Research Articles

Seven Key Trends and their Meaning: SMB Endpoint Device Market in 2014

SMB Purchase Intentions for Android PCs

Key Attributes of Successful SMB Mobility Solutions