Computacenter move hints at declining powers of the PC

The news that Computacenter is exiting the market for distributing PCs to the trade should come as no surprise to those of us who have observed the declining margins and prices in the sector, not the declining importance of the devices themselves.

In a statement [https://production.investis.com/ccenter/news/rns/rnsitem?id=1231830017nRnsM5146L], Computacenter said it will focus on servers, storage and other higher-margin equipment even though getting out of desktop distribution will leave a hole of about £70m in its P&L statement for 2009. This was itself a reiteration of an announcement made in November and does not affect Computacenter’s sales to end-user organisations. Clearly, Computacenter has taken to heart the old adage of “revenue for vanity, profit for sanity” and decided that the vast volumes available in bulk distribution of PCs are not sufficient compensation for the wafer-thin profits available.

Computacenter has long been a juggernaut when it comes to supplying PCs but the PC market that has long been a bloodbath is now next to unworkable – or at least deeply unattractive — to many. As Computacenter chief executive Mike Norris told us: “I’ve got better things to do with my money. I feel sorry for people in PC distribution because they don’t have a choice.”

But it’s also worth noting that the broader fundamentals of how mainstream companies provision desktops are changing fast.

Where 20 years ago, the standalone PC was dominant and 10 years ago the networked PC reigned, the increasingly common environment now sees desktop systems acting as glorified terminals hanging off all-powerful servers that contain provisioning, virtualisation and application streaming capabilities. Admin is centralised, security is centralised, deployment and maintenance are centralised and applications are becoming centralised. The desktop has a disk so users can manipulate Office and other tools, and to provide a cache and secondary storage medium.

Where once NetWare or NT controlled the x86 server and provided core messaging, file and print operations, the new server is all-powerful and the PC has become diminished to the point that it is a cheap box hosting a cloned, partitioned image. The PC was once king but the king is dead. Long live the king – and the new king is the server.