VARs See PC Demand Picking Up, But Windows 8 Adoption Still Lagging

Several solution providers that participated in a CRN Roundtable discussion at D&H Distributing's New England Technology Show in Quincy, Mass., Tuesday said they are seeing significant improvement in PC sales. The reasons for the increased demand ranged from general economic improvement to outdated hardware and the forthcoming end of Windows XP support next April.

Jay Shah, vice president of Compu-Tech in Wethersfield, Conn., said the general economy is improving this year and that's having an effect on all sales, from PC hardware to networking and software. "We're seeing general demand, especially with small and medium businesses, improve as people are loosening up their budgets a bit and spending money," he said.

[Related: VAR Roundtable: Why Windows 8 Is Struggling (Video) ]

Meanwhile, Bob Gregory, president of system builder Ocean State Computers in Providence, R.I., said businesses are now being forced to leave behind aging PCs that can no longer cut today's IT demands.

"We're seeing an increase in business, primarily because a lot of clients are running 7- and 8-year-old machines and they know it's time [to upgrade]," Gregory said. "A small percentage of that might be driven by the end of support for Windows XP and Windows Server 2003, but we don't even count that because it's so small."

Some VARs, however, are seeing the end of Windows XP generate new business. Larry Gold, president of Computer-EZ in Mendon, Vt., said he's seeing new hardware sales as a result of customers replacing older XP machines. In many ways, Gold said, Microsoft was a victim of its own success with Windows XP because the OS lasted much longer than most people expected -- which elongated the PC refresh cycle and delayed new hardware purchases.

"Regardless of the lackluster economy, we're finding the Windows XP end-of-service [deadline] pushing a lot of sales," he said. "We've been nursing a lot of these XP machines for a while. Microsoft is having a hard time wrestling XP out of the hands of business users, and that's a testimony to how good it was."

But even as new PC sales pick up, VARs say Windows 8 is still struggling to gain a foothold with business customers.

Aristeo Torres, owner of Post Computer Systems in Wilbraham, Mass., said his hardware sales are strong because customers are coming to his business to find new Windows 7 systems -- which are nearly impossible to find through retail outlets.

"We've seen recent growth in hardware sales, and Windows 8 is actually driving -- but not because we're selling Windows 8," he said. "The great majority of customers that are buying hardware from us are buying Windows 7 machines. And, our sales are being driven by the fact that Windows 8 was such a radical departure." There are also migration issues looming; Windows XP systems can be directly upgraded to Windows 7 -- but not Windows 8.

"Migration issues from older OSes are very important," said Richard Trahant, president of Land Computer in Peabody, Mass. "We feel Microsoft could do a much better job migrating servers and desktop OSes. In the old days, it was simple upgrade paths that worked quite well. So in a lot of respects, Microsoft dropped the ball [with Windows 8]."

Despite Windows 8's struggles, VARs said the death of the PC has been exaggerated. "We just don't see that happening," Ocean State's Gregory said. "The majority of the customers we have still need that PC for business. They might need a tablet or a convertible [tablet-notebook], but that's in addition to their PCs."

Pat Donovan, director of inside sales at D&H Distributing, said the SMB distributor is also seeing a significant increase in PC sales recently. "We had a very strong year-over-year month in July with notebooks, and we saw that growth across a lot of categories and a variety of channels," Donovan said. "We're excited about the XP end-of-life process because we think that's going to help drive new sales."

PUBLISHED AUGUST 7, 2013