Among the many (and growing in number) complex choices CIOs and IT leaders faced in the past few years -- cloud computing, mobile/BYOD and data management -- building a standard desktop wasn't one of them. Basic desktop infrastructure -- consisting of Windows PCs and laptops, Microsoft office productivity software, and maybe the odd new Dell server -- was a no-brainer.
Suddenly, those easy choices have become complicated, as the erstwhile giants of technology are hitting, at best, very uncertain times. Dell, which is as synonymous with the 1980s PC boom as Microsoft, Bill Gates and Windows, is considering a leveraged buyout that will take the company off the public markets. This move is all about business, so the best that could be said about the future of Dell's PC and server business is that it's uncertain.
HP, which is still the largest seller of PCs, is in trouble. It is still in the middle of a plan to lay off thousands of workers, its disastrous Autonomy acquisition last year is going to cost the company billions, and the fate of the venerable PC and printer units is still indeterminate. At best, they are on borrowed time before going up for sale.
And then there's Microsoft, which by comparison is looking pretty healthy. The latest product line updates from Redmond, Wash., however, are not doing IT decision makers any favors. Windows 8 and Surface, which look good in TV ads featuring sexy college kids doing their thing, are not wowing the general public. A recent stop at the Windows store in downtown Boston found it empty except for a lot of Windows geniuses looking for customers. The most positive comment I have heard from someone who has worked with Windows 8 described it as "challenging."
Do the math on office productivity software
On the office productivity software front, reviews for Office 2013 have been positive, but Microsoft is also pushing Office 365. This cloud-based alternative has attracted such big customers as J.C. Penney and the city of Chicago, which are rolling out Office 365 to thousands of their workers. Office 365 is a fully functional version of the traditional PC-installed version, but the applications live in the cloud for a seemingly nominal monthly fee -- the enterprise version costs $20 per user, per month.
More on the reception of Microsoft Office productivity software releases
Microsoft users not taking to Windows 8, versus Windows 7 adoption
Surface already making way into the enterprise
IT shops may skip Office 2013 for Office 365
I'll first give credit to Microsoft for the Office 365 product, with which it seems to finally get Software as a Service (SaaS) right. But -- and this is a big but -- Microsoft appears to be undercutting its own opportunities here, and the cost savings -- the major selling point of Office 365 -- are specious at best. Assuming that Chicago rolls out Office 365 to all 30,000 of its users this year, that's $7.2 million. The cost of brand-new installs of the enterprise version of Office 2013 are harder to pin down, mainly because pricing is not set, and volume licenses always include discounts. But we can argue that the price will be between $369 and $499, depending on the version purchased. The outlay would be between $11 million and $14.9 million for 30,000 users (and it's also doubtful all 30,000 users would get new software this year). Nevertheless, costs for the 30,000 installs could be amortized over three years, but the SaaS tab would be $7.2 million every year.
And by the way, Google Docs, which admittedly doesn't have near the functionality of either version of Office, is still free.
What are the IT priorities?
I'm not sure CIOs and IT execs even care about these decisions at this point. According to surveys of TechTarget readers, most businesses are just getting around to upgrading to Windows 7 (46% will upgrade this year), while only 14% are moving on up to Windows 8. In addition, office productivity suites were not the top applications targeted to move to the cloud; office productivity software was behind email, customer relationship management, file sharing and content management.
You can find more reader feedback on SearchEnterpriseDesktop, which did a story comparing Office 2013 to Office 365. For the most part, it seems that when it comes to the basics of enterprise computing, IT managers still like to practice the age-old adages, "keep it simple, stupid" and "if it ain't broke, don't fix it." At a time when future platforms are still in a transition phase, this is good advice.