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From Australia to Italy, from Canada to Columbia and from the U.S. to South Africa, pragmatism is the order of the day for IT departments as they struggle to stretch their 2010 budgets and resources to make much needed infrastructure upgrades in the face of a still uncertain and tight economy.
Those are the results of a new 2010 IT & Technology Trends survey which polled over 500 respondents from 18 countries worldwide on IT budget and staffing issues for the year ahead. ITIC partnered with Stratus Technologies and Sunbelt Software to poll C-level executives and IT managers. The results indicate that businesses are in a better place now than they were at the close of 2010. And there’s even a hint of cautious optimism in the air. The survey results indicate that by and large organizations of all sizes and across all verticals will maintain IT staffing levels and budgets during 2010 as they continue to implement upgrade and migration projects that began in 2009.
Nearly one-third of organizations – 31% — revealed that their IT budgets will remain the same in 2010, while 27% say their budgets will increase and an 17% minority said IT budgets will decrease in the New Year. Interestingly, 15% of respondents said their 2010 IT budgets are still not approved and 10% remain unsure of their budgets for the next 12 months.
Among respondents who indicated their budgets will increase, the largest percentage – 27% — say the increases will be modest in the four-to-six percent range. Only 3% indicated their budgets would rise by 30% or more while 50% are unsure.
And among the 17% minority of respondents who say their budgets will decrease, the cuts will be minimal or modest. Some 7% say they will decline by one-to-three percent, while another 11% say they will decline by four-to-six percent. Only 7% of the respondents indicated their firms will slash 2010 IT budgets by 21% or more; 68% said they weren’t sure how big the budget declines would be.
IT Hiring: Modest but Stable
Based on the survey responses it is apparent that IT staffing levels are stable. However, it’s safe to say that very few firms would consider themselves fully staffed or even at pre-December 2007 levels, which was when the U.S. Government officially said the recession began.
And while the economy has not fully recovered, there is a sense from the survey respondents that the worst may be behind them. Over half of those polled – 52% — said their organizations will maintain current IT staffing levels for 2010. In a sign that business is improving, 25% of those polled say their organizations will hire additional IT staff as needed in the coming 12 months. Only a very small 2% minority say their firms are planning layoffs. Another 14% of respondents, say their organizations have made no decisions on hiring and are taking a wait and see approach.
Current IT staffing levels: Surprisingly just over one-quarter — 26% — of survey respondents indicated their IT departments are smaller now than they were in 2008. The biggest percentage – 42% — responded “No” while another 32% say their IT staffing levels are about the same as they were a year ago.
The anecdotal responses from around the globe all shared a common thread: pragmatism and a desire to do what it takes to weather the ongoing economic downturn. The uncertainty of the economy and how to Many respondents voiced concern about staying on top of crucial issues like security, disaster recovery and finding the funds to make the necessary desktop and server hardware, software and application upgrades.
But once again, pragmatism seems to be the byword. Many of the survey respondents simply said they’re picking up the slack and working harder and longer hours. It’s also apparent that some vertical markets have been hit harder by the recession than others. Government agencies, state and local municipalities have suffered. Likewise, the automotive industry and smaller hospitals and consulting firms have also been hit hard over the past 18 months.
An IT manager at a small government agency noted that a large part of their budget comes from state and federal grants. “Those sources are about dry in this economy. We took a 65% cut in state funding this year and pray that we can maintain that low level in next year’s state budget rather than take another cut,” he said.
An IT manager at a mid-sized U.S. consulting firm said his organization is just trying to weather the severe downturn. “Our existing clients have cut back on spending and only do what is absolutely necessary to keep their systems running. New clients are much more difficult to cultivate, so survival over this period is the top priority,” he observed.
“Our main goal is to keep the infrastructure updated, supported and available with less staff,” said an IT manager at a mid-sized healthcare firm with one thousand users.
No one is sure when the economy will rebound to pre-2007 levels. Meanwhile, IT departments are doing the only thing they can do: endure. The silver lining in the cloud is that most organizations have adapted to the belt tightening and working longer hours and have somehow generally managed to keep the corporate data centers up and running. It may not be comfortable or optimal but it’s working.

The most incredible deal of this holiday season — and one that customers will be hard pressed to refuse — is Stratus Technologies’ pledge of Zero downtime for customers or $50,000 cash back.
Here’s how it works: organizations that purchase any standard configuration of Stratus Technologies’ most current ftServer 6300 enterprise-class x86 fault tolerant server equipped with Microsoft Windows Server 2008 and the required service contract, are eligible for $50,000 or product credit if the server hardware, Stratus system software or operating system failures cause unplanned downtime in a production environment within the guarantee period. The guarantee period lasts up to six months following server deployment. Stratus executives vow that there are no hidden clauses or trap doors in the guarantee.
Stratus Technologies, headquartered in Maynard, Ma. has built its reputation on delivering rock-solid reliability of 99.999% uptime. That’s the equivalent of less than one minute of per server downtime in a year! This is an admirable achievement by any standard.
The ftServer 6300 line is Powered by 2.93 GHz X5570 Intel Quad-Core Xeon™ processors, the ftServer 6300 is optimized for large data center multi-tasking applications with high transaction rates, such as credit card authorization processing, high speed ATM networks, and as a powerful engine for database applications and virtualization environments. A typical ftServer 6300 configuration can actually cost less than the value of the payout. The offer is open to customers worldwide, and the program ends Feb. 26, 2010.
Specifically, customers can choose from a custom version of the ftServer 6300 or one of two pre-configured bundled configurations. The ftServer 6300 Power Bundles #1 and #2 are robust, high-end configurations that consist of Microsoft Windows Server operating system, disk drives and supporting peripherals, with a significant package discount compared to individually priced system components. Other server models in the ftServer line are not included in this program.
Stratus Technologies’ decision to quite literally put its money where its mouth is is a bold move and one that the overwhelming majority of vendors would never consider. In fact, ITIC can’t recall any high tech hardware vendor in recent memory, offering these same terms. However, Roy Sanford, Stratus chief marketing officer, said the deal underscores confidence in Stratus Technologies is of its ability to deliver the highest levels — 99.999% uptime — or greater. “The Zero Downtime program is a show of confidence that our products consistently perform at the highest levels of availability. Our guarantee is right out there for all to see, customers and competitors alike.”
Corporate enterprises that are risk averse, those that demand the highest levels of uptime or those that are in a betting mood are well advised to check out the Terms and Conditions of Stratus Technologies offer. You’ve literally got nothing to lose. Stratus Technologies:

The decision by IBM’s Systems and Technology Group (STG), to launch a new Systems Software Business Unit (BU) was one of the more significant announcements in what was inarguably a jam-packed Analyst Summit. Helene Armitage, who will serve as General Manager (GM) of System Software noted that it aligns perfectly with IBM’s broader strategy in hardware, services and networking, stating that “Systems software is the integrating force in the data center. Virtualization is the foundation of the data center and management is the backbone [of the data center]. The Systems Software Business Unit is a key STG growth engine and it will enable us to deliver value across all IBM hardware plans.”
The Systems Software Business Unit will provide the integration framework for STG and act as the glue that enables seamless end to end virtualization and platform management and other capabilities. Systems Software covers some 160 products including: management, energy, security, availability, operating systems (OS) and virtualization. According to Armitage, IBM recently conducted a study with over 200 of its corporate clients on virtualization and management and found that clients are strategically investing in their IT infrastructure to drive business value.
IBM’s findings track closely with the results of ITIC’s 2009-2010 Virtualization Deployment Trends Survey conducted in August and the 2010 IT & Technology Trends Survey which polled 500 businesses worldwide in December 2009. The results of both surveys revealed that upgrading server hardware; deploying server virtualization software and deploying new applications in support of business objectives were among the top three IT spending priorities for 2010 for nearly 50% of the survey respondents.
Additionally, the 2009-2010 Virtualization Deployment Trends Survey revealed that almost 30% of businesses will undertake a private or public cloud computing initiative over the next 12 months. This makes virtualization management and fast, efficient, reliable service and support imperative. The results from both ITIC surveys both emphasize that C-level executive managers and IT departments strongly base their purchasing decisions on doing business with vendors who have a track record of superior technology, service and support.
From this standpoint, Armitage said IBM is perfectly poised, via its comprehensive System Software product portfolio, to address the shift from purely physical management to the integration of physical and virtual systems, storage and network resources. IBM, she said is adapting as the business needs of its corporate customers similarly adjust “to optimize energy usage, maximize resource utilization and keep the corporate data assets secure.”
Armitage acknowledged that IBM has not been in the “industry conversation on virtualization,” but said that Big Blue aims to change that in the coming months to be more visible. To accomplish this IBM will focus on a number of key areas including: physical consolidation; virtual system pools; integrated service management and cloud computing.
Armitage noted that the 200 corporate clients that participated in the aforementioned IBM study are using cloud computing as an access model. The goal of STG and the new Systems Software group is to help corporate customers unlock more value in virtualization than they are currently realizing. To accomplish this, the company will deliver products, tools and services that will assist customers in automating and optimizing, Armitage said.
IBM’s just released Systems Director version 6.1 is one of the lynchpins in the company’s strategy and is designed to run as a standalone product. Though the Systems Software BU and IBM’s Tivoli group exist and operate independent of one another, they do share a joint design and architecture team which have agreed upon APIs. “It’s not quite a joint development team,” Armitage said, “but there is a strong collaborative effort between System Software and the Tivoli team,” she said.
IBM Systems Director Software v 6.1 provides businesses with single point of control to manage all aspects of their data center operations, and integrates best-of-breed IBM virtualization capabilities to provide faster, more efficient means of ameliorating the management of physical and virtual platform resources. Systems Director 6.1 incorporates a singular user interface (UI) to perform common tasks and also delivers a consistent and unified view of the IT environment in its entirety, including servers, storage and network assets. Corporations can use Systems Director as a standalone tool or in conjunction with IBM’s Tivoli to reduce data center management tasks and expense.
Armitage said that IBM will ship Systems Director v 6.1 with every server. Initially however, the Systems Software Business Unit’s revenues will not appear as a separate line item but will be incorporated into IBM STG’s overall sales figures.
IBM’s decision to launch the new Systems Software BU within STG has both short term tactical and long term strategic impact and implications for IBM and hardware customers. Most immediately, it will enable IBM to more comprehensively and cogently address the business and technology needs of its tens of thousands of enterprise customers who are deploying or plan to deploy, virtualization and cloud computing environments. Given that virtualization and cloud computing are two of the hottest emerging technologies, IBM’s move is an excellent one for the immediate, intermediate and long term.
Additionally, networks are growing in size, scope and complexity even as the economic downturn keeps budgets and resources tight. Organizations are more than ever seeking guidance from their vendors. And those vendors that deliver on promises and provide such guidance will reap the rewards of continuing and expanding opportunities. IBM has a proven track record of delivering leading edge technology and superior technical service and support. The latest ITIC survey data found that 77% of organizations rated IBM service and support “Excellent” or “Very Good.”
In order to fully realize the potential of this unit and deliver the hoped-for value to customers, Armitage and her team will have to work hard to carve an identity for Systems Software . IBM is certainly providing its installed base and potential customer base with added value by shipping Systems Director v 6.1 loaded onto every server. However, the product must be accompanied by a strong marketing plan as well as the appropriate accompanying documentation and training materials to assist cash strapped and resource-constrained IT departments in unlocking and maximizing the potential of this software tool. It is crucial for STG and the Systems Software BU to rise to this challenge and distinguish the new unit within the next six-to-nine months as organizations begin to earmark their 2010 corporate expenditures.

“Make your employers understand that you are in their service as workers, not as women.” Susan B. Anthony in an article excerpted from October 8, 1868 edition of The Revolution, a women suffrage newspaper.

Note to working women: if you want to break out of the “Pink Ghetto” tear a page out of your male co-workers playbooks, start a Good Old Girls group and get serious about networking.
The Pink Ghetto is a largely invisible, often unspoken and unacknowledged place that impedes womens’ upward mobility in the workplace, ranging from achieving equal pay for equal work; to being offered the same opportunities as male co-workers to getting promoted as quickly as men or getting promoted at all.
There are no magic formulas or quick fixes to address ingrained inequities. Networking and mentoring initiatives offer immediate, tactical as well as long term strategic solutions to assist women in breaking down gender-based barriers. There are compelling reasons why women in high technology and in all professions, should make networking an integral part of their daily routines, formalize their efforts and set specific goals.
The ongoing recession of the last two years has made the Pink Ghetto more palpable than ever. The competition for job retention, promotions and to secure new positions is intense. The ongoing economic crisis has spared no one. And with the unemployment rate hitting 10.2% in October – the highest levels in 30 years – everyone is feeling the pressure. Consider these statistics:
• Women now constitute roughly 50% of the workforce, but on average, they make just over three-fourths of the salary of their male counterparts.
• The most recent Bureau of Labor statistics show that salary disparity between men’s’ and women’s wages widened slightly from during 2008. On average, women now earn $.77 for every $1 a man earns, down from $.78 in 2007, for an annual median salary of just over $36,000.
• The National Research Council reported that women leave high technology, computer, science and engineering careers twice as frequently as men and women’s salaries in those professions still lag behind those of males by 12% to 15%.
• The number of women CEOs also declined slightly in the past two years. Currently, women hold the top spots at only one dozen Fortune 500 companies; while 24 Fortune 1000 companies are run by women, according to Fortune Magazine.
According to the latest statistics released by the Bureau of Labor Statistics on November 6, men bore the brunt of the layoffs representing 72% of the 7.3 million jobs lost since the recession began in December 2007. The disproportionately higher job losses incurred by men are attributable to the fact that over 50% of the jobs lost have been in male dominated fields such as automotive, construction and manufacturing.
With so many men losing their jobs, many women now find themselves the family breadwinner, so the pressure is on to make up the salary shortfall and move up the corporate ladder.
The average disparity of 23 cents between a man and a woman’s wages may sound negligible, but over the course of a working lifetime those pennies add up. The wage gap costs the average American full-time woman worker between $700,000 and $2 million over the course of her lifetime, according to economist Evelyn Murphy, president of the Women Are Getting Even (WAGE) Project, a non-profit, grass roots organization formed in 2006 to close the salary gap.
In the high technology, engineering and scientific sectors, the macro-economic levels of male vs. female do not obviously “ show up,” noted Caroline Simard, vice president of research and executive programs for the Anita Borg Institute for Women and Technology in Palo Alto, California. Simard’s research indicates women are more vulnerable specifically because they are less networked and therefore more susceptible to losing a job and are faced with more challenges when seeking new employment opportunities.
“It’s hugely important for women to network; it’s not enough to just work hard. Networking is one of the most powerful predictor’s of advancement and salaries,” Simard said.
Anecdotally, men are very supportive of other men and have typically lobbied on each other’s behalf for swifter promotions, bigger raises and better performance reviews. One woman who spent over 20 years performing admirably at her consulting firm in the Northeast, including traveling the globe and being a top revenue generator, was consistently passed over for a promotion to vice president. Her male counterparts who had a fraction of her experience, came in a lower grade and salary level but quickly passed her in the ranks, achieving the coveted VP title in two or three years. Another woman in this same organization was assigned to report to a younger, less experienced male colleague who was pegged as an up-and-comer and put on the fast track for promotion. When it came time for performance reviews and merit raises, the more experienced woman got a miniscule salary increase and was bypassed for a promotion because her younger boss deemed that her writing lacked the necessary analytic abilities. Ironically, the woman in question had garnered numerous writing awards and was in great demand among the consulting firm’s clients!
While women in high technology will often chat and engage in social activities during the regular office day, they have not heretofore made a concerted effort at networking.
The traditional tried and proven male methods of networking like golf outings or bonding over drinks after work at a local watering hole do not come easily or naturally to women. More often than not, a woman engineer, IT manager, software developer or C-level executive will be a very small minority or perhaps the only female in her immediate group. This can be an isolating and daunting experience. While not specifically excluded from accompanying her male peers to sporting events as a participant or spectator or going with them for drinks after work, many women feel uncomfortable. And many women, who are also wives and mothers, simply don’t have the luxury of going to bars after hours for networking over peanuts and beers.
“Women must network laterally and upwardly – including with supportive men. Women need the connections up to help open the doors to upward mobility,” Simard said, observing that “if you’re the only woman in your group it will be harder to network.”
Women are well advised to get on internal corporate as well as industry committees and task forces and to join their specific industry associations in order to gain external recognition, which they can then use as leverage within their organizations. in order to bring it back to you internally.
“Working harder does not make you more visible it can make you invisible,” Simard observed. “Women need to view networking as being a part of their daily work,” she added.
The Anita Borg Institute runs negotiation programs to teach women specific networking and negotiation tactics. Women who don’t negotiate for better pay and benefits at the outset of their careers are negatively impacted over the long term and will almost certainly get paid less over the course of their careers, Simard said.
Theory and practice are frequently at loggerheads. The growing bodies of research on gender-based workplace disparities are clear that women must become more assertive in order to be heard, especially in male dominated fields. The conundrum facing women is that if they’re too assertive they will be viewed negatively and classified as intimidating or worse.
“Women must learn to navigate that high wire act,” Simard said, noting that even women will view an assertive woman negatively. To correctly assess the tone of your organization, women should seek out a mentor who will help them read and clarify various work related issues and advise them on the best courses of actions for dealing with specific situations and different personality types.
Another way to burst out of the Pink Ghetto is to address the innate gender bias that exists in many organizations’ hiring, recruiting and retention practices. The Anita Borg Institute’s initiatives center on helping companies to realize that they need and want diversity in their corporate culture and communications styles. “The upcoming generation is the most diverse this country has ever seen. Good managers are those that can adequately deal with diversity,” Simard said.
Women in high technology who want to wend their way through the organization and reach the upper echelons in salary and job titles should avail themselves of the growing number of women’s conferences. Online social networking sites like Facebook and LinkedIn are also great sources for networking, reconnecting with former colleagues and supervisors and meeting potential mentors. Don’t hesitate to ask Facebook and LinkedIn connections to write references and recommendations for you. And above all, cultivate these relationships, seek out mentors and be a mentor.

As 2009 winds down it’s time to take a look back and a look ahead to forecast what 2010 will bring to desktop hardware OEM vendors.

These are difficult and challenging economic times but there are bright spots in the desktop hardware arena. Notebook sales remain strong; Netbooks are coming on strong and there’s a new class of so-called “super notebooks” that’s emerging, fueled most notably by Hewlett-Packard.

The desktop hardware OEMs are pinning their 2010 revenue hopes on an immediate market rebound based on the success of Microsoft’s newly released Windows 7, pent up demand and a plethora of new offerings arriving just in time for the holiday season.
Longer term though, hardware vendors, including Acer, Apple, Asustek, Dell, Hewlett-Packard, Lenovo, Sony, Toshiba and others are facing feverish competition as they vie with each other for corporate capital expenditure and consumer monies. In response, all are ramping up their sales efforts by offering dueling bargains and attempting to differentiate their products with a wide range of value-added devices and features at every price point from low-cost Netbooks to high-end gaming systems.
Global PC shipments rose slightly in 2009’s third calendar quarter as corporations and consumers cautiously began opening their wallets. This trend was helped by Microsoft’s long awaited Windows 7 operating system which debuted on October 22, to very good reviews. ITIC’s October 2009 Windows 7 Deployment Trends and Adoption Survey, which polled nearly 1,700 companies worldwide, indicated that 60% of corporate respondents will deploy Windows 7 within the next 12 months.
That’s good news for the desktop hardware vendors all of whom have a vested interest in highlighting their collective support and partnerships with Microsoft. The survey responses also showed that the availability of Windows 7 is just the impetus that corporations need to upgrade. Consumer sales – particularly for entry-level, aggressively priced Netbooks and notebooks – should also serve to bolster OEM hardware manufacturers in the immediate and near-term.
Not surprisingly, some desktop OEM vendors have fared better than others during the ongoing economic recession. Below is a roundup that details the strengths and challenges confronting the major desktop hardware manufacturers:
Acer: Acer has been one of the desktop hardware success stories over the past two years and now ranks as the number two desktop OEM vendor behind HP. This is largely due to key acquisitions – notably Gateway and Packard Bell – which have heightened and expanded the company’s global brand. Acer also scored big wins with the success of its notebooks and the robust demand for the company’s Aspire One 10-inch Netbooks which debuted in the summer of 2008. Street pricing for Acer’s entry level Netbooks begins at a very economical $149; though pricing of $299 is the median average. The Aspire One has done well against competing offerings from Dell Inspiron Mini 9 and the Asus Eee PC line of desktops. The Aspire One also has broad consumer appeal owing to its support for Windows, Linux and even a modified version of the Mac OS X via the OSx86 project. Acer aspires to surpass HP as the world’s top PC/notebook/Netbook manufacturer, but it has its work cut out for it. While the quality of the Acer product is high, HP and Dell both have the edge when it comes to fast, efficient service and support.
Apple: Can Apple do anything wrong? For the last few years – in the consumer space, at least – the answer is “No.” The enormous success of the iPod and the iPhone has, in turn, buoyed sales of Apple Mac desktops – particularly its notebooks. Always a hit with consumers, this popularity is now carrying over with modest success in the enterprise arena. Those same consumers have also been taking their Macs into the workplace and using them in increasing numbers as their corporate desktop instead of Wintel-based PCs. Apple notebooks won’t make a perceptible dent in PCs in the workplace for the foreseeable future, but ITIC survey data shows that this is a sustained trend. Apple CEO Steve Jobs has consistently maintained that Apple will eschew the lucrative low-end Netbook market. But the company is widely rumored to be developing a Tablet PC of unknown dimensions – but larger than an iPhone to counter the Netbook.
It is against Apple’s company policy to reveal any product details (or even confirm the existence of a product) in advance of shipment but we believe it’s highly unlikely that Apple will let 2010 pass without making a major new product introduction. Meanwhile, Apple’s financials and its marketing are stellar. The Cupertino, California firm has been one of the shining stars in high technology and has consistently out-performed in this sector. Consider the numbers: Apple’s stock price is up an astounding 124.8% in the last 12 months and is currently hovering at just over $201 a share, and quarterly revenues grew 25% year over year (YoY). The company has a market cap of $181.14 billion; profit margins of 15.61%; operating margins of 20.96% and return on equity of 23.35%. Apple also has significant cash on hand: $23.46 billion and no debt. Apple also has the distinction of being just about the only high technology firm that did not have any layoffs over the past 18 months.
Asustek: Based in Taiwan, Asustek is a fast growing company with big ambitions. It was one of the first companies to manufacture and capitalize on the Netbook craze and it has set a self-proclaimed goal to be one of the world’s top three notebook vendors by 2011. The company hopes to accomplish this via acquisition and it has its sights set on acquiring Toshiba’s notebook business. Asustek and Toshiba are reportedly in negotiations although nothing has been finalized. Meanwhile, Asustek is a serious up and coming competitor in the consumer desktop hardware sector. The company posted a net profit of $6.49 billion in its just ended fiscal quarter, which is double what was predicted.
Dell: It’s no secret that Dell has struggled and has lost business and market share to both Acer and HP during the past 24 months. However, there are bright spots and encouraging signs for the company. In particular is Dell’s strong partnership with Microsoft; Windows 7 sales should help lift Dell desktop sales – particularly in the enterprise sector where Dell enjoys a strong presence. Additionally, ITIC survey data indicates that Dell gets an “excellent” or “very good” rating for service and support from an overwhelming 84% of businesses.
Though the industry at large incorrectly perceives Dell a consumer vendor, in reality, the company has an extremely strong enterprise presence. Consequently, Dell’s sales suffered because of the protracted slowing of enterprise desktop upgrade cycles. Dell reported disappointing financials numbers two weeks ago, including a 54% drop in revenue in the latest quarter. Sales are down 14.9% YoY, with annual sales of $51.43 billion on earnings of $1.45 billion. Operating margins are also on the thin side at 4.67%. These results stood in stark contrast to overall strong PC/notebook/Netbook sales during the same period, causing some industry watchers to opine that Dell may be missing the boat as the industry slowly recovers from the downturn.
Dell executives – led by CEO Michael Dell — have repeatedly said in recent weeks that they are poised for a turnaround. The company sought to reassure analysts and industry watchers by saying it will not initiate steep price cuts on its PCs. However, Dell moved aggressively to slash tags on its PC monitors for the Black Friday sales which traditionally usher in the holiday shopping season. For example, Dell’s S2009W 20-inch desktop monitor sold for $99 at Best Buy last week; a substantial 37% decrease from the normal list price of $159. Dell executives have also been vocal in recent weeks in stating that their fortunes and sales will wax based on demand for Microsoft’s newly released Windows 7. And in fact, Dell does have cause for optimism in this regard. Additionally, Dell’s Alienware M15x, 15 inch notebook and the M17x 17-inch laptop aimed at hard core gaming enthusiasts, which debuted earlier this year to rave reviews, are among best in breed. The M15x pricing starts at $1,499 while the M17x retail prices start at $1,799 and ranges to $4,899 for a high end fully loaded model.
Another Dell strength is found in its marketing and it will need to bring all of its skills to bear in this area to jumpstart sales.
Hewlett-Packard: The world’s Number One desktop hardware maker has navigated through the troubled economic waters better than most competitors. This is due to HP CEO Mark Hurd’s ongoing cost cutting initiatives and fortifying its’ services offerings with the purchase of EDS. HP also gets high marks for its diversified product portfolio. The company’s printer and peripheral business remains strong and HP now has a new play in networking owing to its recent acquisition of 3Com. This diversification will continue to help the company weather the worst of the economic downturn.

Although HP is often perceived as mainly an enterprise vendor, in reality, the firm has a huge presence in the consumer space. This has solidified HP’s position as the top desktop hardware OEM. The consumer sector has shown more strength in the last 18 months than the enterprise arena, where budget constraints have forced IT departments to delay desktop hardware refresh cycles. HP became the world’s number one desktop hardware OEM back in 2007, wresting the title away from Dell on the strength of its feature rich notebooks. HP is also betting heavily on an emerging class of hybrid laptops dubbed “super Netbooks.” The most notable HP offering in this category is the DM3 13-inch lightweight device that is equipped with 4GB memory and eight hours of battery life. It has a list price of $599 from HP but as of Black Friday, Amazon began selling it for $499.

HP is performing well overall. The company has not been immune to the downturn; quarterly revenue growth declined by 8.40% YoY, however quarterly earnings growth is a positive 14.20%. HP’s latest financials beat the street and its gross margin is 23.59%, while operating margin is 9.62% on annual earnings of $7.66 billion and annual sales of $114.55 billion. HP’s return on equity is a very healthy 19.28%. The combination of cost cutting, a diverse product portfolio, strategic acquisitions and very good technical service and support all augur well for HP’s continued success in the desktop arena throughout 2010 and beyond.
Lenovo: The outlook remains challenging for Lenovo Group Ltd, which is the world’s fourth largest PC/notebook manufacturer. Based in Hong Kong, Lenovo purchased IBM’s PC business in 2005. Earlier this month, the company staunched the flow of red ink from three consecutive losing quarters and posted a net profit for its 2010 second fiscal quarter of $53.08 million (US). However, Lenovo’s revenues fell 5.2% to $4.10 billion (US) from $4.33 billion in the same quarter a year ago. Cost cutting measures and strong growth in China helped Lenovo to rebound. PC and notebook sales to China accounted for nearly half – 49% – of Lenovo’s second quarter sales. However company executives cautioned that the economic environment remains challenging. “The worldwide personal computer market has not recovered yet and Lenovo is still facing difficult problems,” said Chairman Liu Chuanzhi in a November 5 teleconference call with analysts. He added that Lenovo is working to resolve its issues but said it will take time, stating that the company hopes (analysts) “won’t set excessively high expectations for us, and give us room to grow.”
All in all, consumers and corporations can expect to reap great bargains as competition intensifies among major and minor desktop hardware vendors. At the same time vendors must deliver superlative price/performance economies of scale and top notch service and support in order to successfully compete over the next 12 to 15 months.