Windows XP migration: Reassess your desktop IT strategy

The cost of PCs has remained pretty stable over the past year, but people are expected to pay a big premium for hybrid devices. Is it time to rethink desktop IT?

PC market share data shows businesses are buying fewer laptops and desktops. PC shipments in Europe, Middle East and Africa (EMEA) declined 16.8% in the second quarter of 2013, compared with the same quarter last year, according to Gartner.

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Apart from the immovable deadline of 8 April 2014, when Windows XP support ends, businesses have little incentive to buy new hardware.

In June, Computer Weekly asked analyst Context to compare how prices of PCs had shifted in the past 12 months.

The perception was that the prices of standard specification machines had skyrocketed since the introduction of Windows 8 in 2012, due to devices incorporating touchscreens and SSD drives, which are part of the Windows OS system requirements.

A standard specification was selected: Context looked at a laptop device running a 2.5GHz processor – chosen because it was the most common standard specification for mainstream laptops at the time – and equipped with an integrated graphics card (see table below).

In the enterprise space, Windows 8 appears to be cheaper than equivalent consumer grade PCs, said Marie-Christine Pygott, senior PC analyst at Context.

"It is cheaper in business. This could be because PC manufacturers are trying to push Windows 8 into businesses," she said.

In the notebook market, the Context analysis showed that Windows 8 notebooks are, on the whole, slightly cheaper than equivalent Windows 7 notebooks.

The situation is different in retail, however, when looking at the distributor selling price: "The take-up in retail is slow due to the poor take-up of Windows 8."

There is a lot less functionality on traditional notebooks, because they do not have touchscreens, but hybrid devices are fairly expensive.

Prices in retail are set to drop over the next month due to retailers discounting for the "back to school" season, said Pygott, but for now buyers can expect to pay around £800 for an Intel Core i5 hybrid device. For instance, a convertible device such as the Lenovo Yoga costs £780 on average, she added.

These figures illustrate the purchase price. PCs run Windows and Windows requires patching, anti-malware software and the hundreds of desktop applications that make up the corporate software image in a typical enterprise, so this must be taken into account when calculating the total cost of ownership.

But is there an alternative, especially given that many businesses will need to refresh desktop IT to migrate away from Windows XP?

Now here is the crunch for corporate IT: the consumer does not care about the OS when they are buying a device. Why not consider a non-Windows enterprise desktop?

Pygott said cheap Android devices, such as the Google Nexus tablet, are doing quite well. For a full-size desktop or notebook device, Google offers Chromebook and its desktop cousin, the Chromebox, which provide a browser-centric user interface based around a Linux variant called Chrome OS.

The consumer does not care about the OS when they are buying a device. Why not consider a non-Windows enterprise desktop
The Chromebook (and Chromebox too) is an internet browsing and email PC. It represents a new genre of non-Windows, pared down device. Pygott expects it will eventually replace the netbook.

Mark Ridley, CTO of Reed.co.uk, has rolled out Chromebox devices to the job site's 100-strong sales team. They are using a desktop Chrome OS machine to access Salesforce.com and Google Apps. Ridley said these devices are considerably cheaper than Windows PCs.

At Grass Roots Group, CIO Danny Attias has deployed Google Enterprise across the company. He said third-party apps from the Google Play store are being used as core business applications. This suggests that companies are willing to use non-Windows business software, paving the way to devices such as the Chromebook becoming part of the corporate desktop environment.

In fact, a Forrester report titled It’s Time To Reconsider Chromebooks urges IT departments to take a closer look at the Chromebook as an alternative to a PC running Windows.

Certainly, Chromebooks offer a cheap alternative to Windows. HP's Pavillion Chromebook costs around £250, but when Computer Weekly spoke to HP, the device was only available in retail. But this will change as more corporates see the benefit of such devices to provide low-cost computing with a low maintenance requirement.

A browser-based user interface means no applications need to be installed on the desktop. There is no need for IT administrators to patch machines. In theory, security can be handled at the internet gateway, so the IT environment becomes easier to manage.

According to the report’s author, Forrester analyst J P Gownder, chromebooks require very little configuration: "Pilot users say any given device can be configured for a new user in under 15 minutes.” Perhaps this is why 20% of the IT decision-makers in large enterprises questioned by Forrester said they would consider deploying the Chromebook.

But organisations have a massive Windows legacy. Dale Vile, research director at Freeform Dynamics, recommends IT managers use the Windows XP migration as an opportunity to reassess their desktop IT strategy.

“Some users in the workforce may be classed as super-users who are dependent on MS Office, but these may be a small minority. Others, like sales and marketing, may have a dependency on PowerPoint. It is fairly easy to work around this and provide alternatives,” he said.

News Analysis: The Challenge of Creating a Unified Organizational Strategy

To be clear, it is hard to do. The default behavior for human beings is to think in terms of tribes. If you work in a small department in a big company, you’re naturally going to identify most closely with your immediate colleagues. You’ll have lunch or coffee together, and maybe even socialize with them outside the office.

Other colleagues you see in the hallway and on the elevator can seem like total strangers, even though you work for the same company. Divisions fighting for resources and attention can exacerbate the problem.

It’s a theme that has come up often in my interviews with more than 200 leaders for my column, Corner Office, and smart leaders recognize that us-versus-them behavior can ultimately destroy companies.

So what should leaders do? A few tips have emerged from my interviews.

Create a ‘One Company’ Culture

Symbolism is important, in both the language that leaders use and the organizational chart they create.

Here’s how Kathleen L. Flanagan, the chief executive of Abt Associates, tackled the issue.

“We’ve grown from $180 million in annual revenue a few years ago to $425 million today. As the company grew, more business units were created, and so we had more silos in the organization. My objective two years ago in coming into this job was to take down the silos. So I reorganized the company. It used to be organized around lines of business — international, U.S.-based, data collection — and there used to be senior vice presidents who led each of those big businesses. I took those senior V.P. positions away and hired one executive vice president for global business who shared my vision for what I call One Global Abt.

At the heart of that is taking down the walls so people can collaborate more freely, so that we can leverage all of Abt. We now ask people to pick their heads up out of their project work or their division focus and look across the whole company. So I now ask my managers to wear two hats. Everybody’s got their job in the big picture of the company, but they all have to wear an Abt hat. It’s really easy, given the time pressures and the pace of our work, to put blinders on and be very project-focused. It’s harder to take a step back and ask, “How does this apply to the whole company?”

Simplify the Scoreboard

A big part of a leader’s job is to establish a simple set of performance metrics so that everyone in the company can feel as if they’re part of a broader team, and can understand how the work they do contributes to the broader goals. Chief executives have to choose those metrics carefully because, as the saying goes, what gets measured gets managed.

A powerful example of this came from Shivan S. Subramaniam, the chief executive of FM Global, a commercial and industrial property insurer, who shared with me how his team worked hard to develop very simple goals.

“We call them key result areas, or K.R.A.’s. We’re multinational — we’ve got 5,100 people, 1,800 of whom are engineers. We’re very analytical. But we have three K.R.A.’s, nothing terribly fancy. And everybody focuses on them. One is on profitability. One is on retention of existing clients. And one is on attracting new clients. That’s it.

You can talk to people in San Francisco, Sydney or Singapore, and they’ll know what the three K.R.A.’s are. All of our incentive plans are designed around our K.R.A.’s, and every one of those K.R.A.’s is very transparent. Our employees know how we’re doing. And, most importantly, they understand them, whether they’re the most senior manager or a file clerk, so they know that ‘If I do this, it helps this K.R.A. in this manner.’”

Communicate Relentlessly to the Entire Staff

There’s a reason that so many companies hold regular all-hands meetings (and with technology, it’s possible to do them in large and sprawling companies now). Again, it’s about tribal behavior. You have to bring everybody together and speak to everyone as a group for people to identify themselves with the broadest group. Leaders then have to take their simple plan and hammer it home, again and again, even if they feel like everybody has heard it before a hundred times.

It’s a lesson that Christopher J. Nassetta, the Hilton Worldwide chief, told me that he learned over time.

“You have to be careful as a leader, particularly of a big organization. You can find yourself communicating the same thing so many times that you get tired of hearing it. And so you might alter how you say it, or shorthand it, because you have literally said it so many times that you think nobody else on earth could want to hear this. But you can’t stop. In my case, there are 300,000 people who need to hear it, and I can’t say it enough. So what might sound mundane and like old news to me isn’t for a lot of other people. That is an important lesson I learned as I worked in bigger organizations.”

Steve Ballmer’s challenge as the chief executive of Microsoft is not unlike the challenge that it faces with technology: how to take something very complicated — be it a software program or a sprawling organizational chart — and make it simple to operate. This may be the toughest task of his career.

As Nook sales tumble 34%, Barnes & Noble rethinks tablet strategy

Barnes & Noble said Nook sales dropped 34% in its fiscal fourth quarter.

After sales of the e-reader and tablet line fell 34% in the company's fiscal fourth quarter, which ended in April, Barnes & Noble (BKS, Fortune 500) executives said Tuesday that it's time for a change in strategy.

The bookseller will stay the course on its e-reader business, but Barnes & Noble plans to pursue a partnership to help it make Nook HD tablets. The company will continue to sell Nook tablets in stores, but future devices might be co-branded with the new manufacturer's name as well as the Barnes & Noble logo.

"We are 100% not exiting the device business," insisted William Lynch, CEO of Barnes & Noble, on a conference call Tuesday.

Lynch did not name the company that Barnes & Noble will partner with, but he said that more information on device strategy would be released in coming months.

The news comes on the heels of an industry rumor that Microsoft (MSFT, Fortune 500) is considering the purchase of the Nook brand. The software giant already invested in the Nook business, taking a 17.6% stake in April 2012.

Microsoft declined to comment about its future plans for the Nook.

The bookseller's stock fell by about 18% after the earnings report was released Tuesday morning.

Barnes & Noble said the Nook HD has simply become too costly to produce, despite the fact that its has successfully reduced overhead costs in recent months. The company spent $26 million less on the Nook when compared to the previous fourth quarter.

The bookseller said it will continue to build its digital catalog and add thousands of e-books every week. Its digital sales decreased by almost 9% for the fourth quarter, but Barnes & Noble noted that the decline is party due to drop in device sales and also because popular novels, such as The Hunger Games and Fifty Shades of Grey trilogies, were best-sellers a year ago.

Overall, Barnes & Noble reported a fourth quarter net loss of $118.6 million, nearly double its loss from a year ago. Revenue fell by 7.4% to $1.3 billion.

Consistent with prior years, Lynch expects the company to open five new stores in the coming year while closing between 15 and 20 stores.