The PC in 2014: more like the windshield than the engine

bigstock_African_businessman_with_a_clo_15476588-resizedto240 In the very early days (the 1980s), PCs in business led a dual existence. Especially in technology-poor small businesses, PCs provided access to tools like spreadsheets that allowed for automation of previously-manual, hard-to-manage tasks, while in larger enterprises, they were often used as terminal emulators — essentially, windows to larger systems offering the added bonus of local processing power.

Through time, the PC became the key personal productivity tool for staff in all industries, working for organizations of all sizes. In recent years, though, the PC’s pre-eminence has been assailed by the growing use of smartphones and tablets that offer limited local processing power, but access to the vast resources of the Internet. In many environments — and in the usage patterns of many ‘multi-screen’ workers who can choose between a PC, a smartphone and a tablet for a specific task — the PC has become niched as a ‘content creation’ device, useful for building presentations or spreadsheets or complex documents, but awkward for on-demand display of these kinds of content.

A December, 2013 survey of 700 U.S.-based SMBs by Techaisle suggests that the PC may be returning to its roots as a window to broader resources, less important as a content creation machine than as a portal to cloud-based systems.

In the survey, respondents were asked to use a scale of 1-10 to indicate the kinds of PCs that they would like to see from their suppliers: a "1" response indicated that they required only Windows-based PCs, a "10" indicated that they required only Android-based PCs, and responses towards the middle of the scale indicated a preference for choice between the two platforms.

The data shown in the graphic indicates that Windows is clearly still the #1 choice for PC buyers — but it also shows that many small and mid-sized businesses are interested in having an Android alternative. In fact, in a follow-up question, 5% of small businesses and 18% of mid-sized firms stated that they would "most definitely" be interested in acquiring Android-based PCs.

Android PC preference graph

What’s behind this? It’s very likely that Android-based PCs will not have the same level of capability as Windows-based PCs — but we can assume that buyers at SMBs understand this. It appears that they are indicating that the needs associated with ‘personal productivity’ in a cloud-based world are changing" that in many cases, the PC is primarily a window into resources located elsewhere, and secondarily, a content-creation device.

Good news for the monkeys. Whither the gorilla?

An increasing market for Android-based PCs would be hugely advantageous for companies that produce tools for Android users, and especially, for providers of open-source Office suites such as FreeOffice, OpenOffice and Kingsoft. However, it is Techaisle’s belief that the availability of a fully-functional version of Microsoft Office on Android will be the essential for broad Android PC success, as many firms require these applications for local PC activities.

How should Microsoft react to these market trends? On the one hand, delivering a complete version of Office for the Android platform would open up an enormous market opportunity, giving Microsoft the potential to continue positioning Office as the lynch-pin connecting PCs and content creation. On the other hand, Android’s gains in the PC market will come directly at the expense of Windows 8, diminishing Microsoft’s control of the platform, and accelerating Windows sales declines in an already-soft PC market.

There are likely widely-divergent views on this issue in Redmond. It’s worth noting, though, that even a firm as omnipresent as Microsoft takes on risk if it attempts to thwart buyer demand for new technology. The "third hand" in the dichotomy above — that Microsoft continues not to offer full Office functionality for Android, that FreeOffice, OpenOffice, Kingsoft or something similar become embraced as ‘good enough,’ and that large swaths of the market decide they can live without Windows and Office — is clearly a nightmare scenario. We expect that as user demand mounts, Microsoft will feel increasingly-compelled to participate aggressively within the Android PC market segment, even as it touts the advantages of Windows within its native PC constituency, and as an alternative to Android (and iOS) in the smartphone and tablet environments.