Revamped Dell OptiPlex PCs face a tough market

While Dell Inc.’s new line of enterprise-focused desktops hits all the right notes in terms of power and cost efficiency, analysts say the PCs are entering an almost impossible market.

As part of its OptiPlex series launch, Dell is offering four new desktop platforms, including its OptiPlex FX 160 thin client model, which supports embedded or streamed operating systems for virtual desktops. The thin client model, which streets at $430, fits in nicely with Dell’s overarching theme behind the new line of laptops – getting greener.

“There is a place for desktops in the business environment and with ever increasing technology, we have the capability to not only expand them, but also to make them more cost effective for businesses,” Carolyn Rollins, brand manager for the OptiPlex line at Dell Canada, said. “That means designing them with more efficiency from a power standpoint, usability standpoint and environmental standpoint. It also means designing a product that has a longer life span and is not transitioned out quickly.”

To hammer home its environmental focus, Dell also launched the OptiPlex 960 model, which represents the company’s flagship desktop. With a starting price of $928, it aims to use 43 per cent less power and operate 60 per cent quieter than previous generation OptiPlex machines.

Rollins suggested that companies would be able to find positive ROI on the OptiPlex line and suggested that IT business leaders seriously examine an upgrade even amidst the economic crisis. To sweeten the deal, enterprises are also being given a longer transition period this time around, Rollins said.

“The OptiPlex 960, for example, has a 24 month transition time,” she said. “That differs from the 12 to 15 month we usually offer on the OptiPlex line. This gives it a longer availability for our customers.”

But according to some analysts, the green aspect – along with everything else in IT – has had to take a back seat this year due to the slumping global economy.

Doug Bell, a research analyst with IDC’s U.S. PC tracking division, said that while Dell’s option is strong in both its pricing model and power efficiency features, most enterprises are not in a buyers’ market.

“No matter how you slice it, the market is going to be tough in 2008 and 2009 as far as PCs go,” Doug Bell, analyst at IDC, said. “And that’s even more so in the commercial market. We’ve seen many enterprises stretching their average life cycles and delaying refreshes.”

Bell expects that most enterprises will postpone their desktop and laptop purchases until the economic downfall shows signs of subsiding.

“People are waiting to see how the first half of 2009 treats their financial planning and budgets,” he said. “Into the planning cycle many corporations have been cutting back on IT budgets and this area is proven to be one of the first spots to tighten up in tough times.” He added that many companies historically ride out desktop lifecycles longer than they should. “From a financial standpoint, good enough computing is good enough for now,” Bell said.

Add to that the fact that consumers and businesses are increasingly turning to laptops instead of desktops and Dell, like every computer manufacturer, faces an uphill climb. But according to Jim McGregor, analyst at Scottsdale, Az.-based In-Stat, the company is doing everything it can to entice those companies with spare spending power.

“I can’t say there’s anything really exciting about desktops,” he said. “But Dell, here, is moving toward a usage model. They’re designing [the desktops] around the apps, like digital content creation or business apps or gaming. They’re focused on apps and how people will use them. It’s not a one-size-fits-all situation.”

Rollins said that while Dell has seen a strong trend toward notebooks in the enterprise, it foresees another big shift back to desktops as organizations start thinking more about security.

“A lot of companies are making the decision to add more desktops because they can control the hardware in a physically secured environment,” she said.

The new OptiPlex FX160 thin client offering, she added, underscores this focus on security. “No data is actually housed or kept on the machine. Everything is controlled centrally.”

— with files from IDG News Service

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