Magic Quadrant for Global Enterprise Desktops and Notebooks

21 November 2013 ID:G00255685
Analyst(s): Stephen Kleynhans, Leslie Fiering

VIEW SUMMARY

Global enterprise PC buyers have unique requirements that go beyond price to include platform stability, global account management, support, service capabilities and fast turnaround on warranty repairs. This research will help organizations select the right vendor for their PC needs.

Market Definition/Description

The global enterprise PC market is defined by the following type of products:

  • Notebook PCs — Product screen size is more than 11 inches in various form factors (including hybrids and convertibles) and configurations. Mobile thin-client terminals, tablets, mobile phones and smartphones are not directly included in this Magic Quadrant, although consideration is given to these adjacent products in our weightings (see the Gartner IT Glossary).
  • Desktop PCs — These include desk-based systems of various form factors and configurations. However, we do not include thin-client terminals or technical workstations in this Magic Quadrant. Although we are not evaluating thin-client offerings, we consider how each vendor approaches alternative delivery models, and include these adjacent products in our weightings.

This Magic Quadrant is written primarily for PC buyers in midmarket or large enterprises with more than 500 employees. These companies may operate in one or more countries, although we weight our findings toward organizations requiring some global operations.

For this edition of the Magic Quadrant for Global Enterprise Desktops and Notebooks, we have made a significant number of changes to reflect what's occurring in the PC industry — i.e., modifications in everything from product design to sales and marketing approaches (see Market Overview). While some hardware is becoming more commoditized, the services provided to enterprises are becoming more differentiated. We have adjusted the Magic Quadrant measurements to reflect changes in our client base and the requirements that clients value.

Specifically, we have adjusted our metrics as follows:

  • Less focus on product and more focus on services. While manufacturing and selling strong products are still essential, accompanying those products with a rich comprehensive set of enterprise-targeted services is becoming more important.
  • Less focus on global coverage. While we still put a strong value on global capabilities, we have lowered the weightings compared with previous years to reflect a broader range of customers' needs.
  • Greater weighting to consumer crossover capabilities and raised weightings on mobile capabilities.
  • Broadened inclusion criteria.

Magic Quadrant

Figure 1. Magic Quadrant for Global Enterprise Desktops and Notebooks
Figure 1.Magic Quadrant for Global Enterprise Desktops and Notebooks

Source: Gartner (November 2013)

Vendor Strengths and Cautions

Acer

Although Acer is a strong player in consumer PCs, it has not been able to translate that success into the global enterprise market, and has seen its overall market position slip since 2010. In Europe and Africa, the company has established good corporate capabilities; however, the level of commitment, products and direction is not consistent across all geographies. Customers requiring high levels of service and support for PCs should expect to rely on local channel partners, especially if they are operating in multiple countries. Users may need to make separate deals for each region, and execution could be inconsistent as a result.

Strengths
  • Good market visibility.
  • Good regional offerings for education and small or midsize businesses, supported by a good channel partner network.
  • Some global product offerings, with a strong market presence across many regions, targeted mostly to transactional business.
Cautions
  • Commercial systems are targeted at transactional markets, and large enterprise-level offerings are weak.
  • Lacks global service and support capabilities, and has limited global account management.
  • Improving, but still limited, capabilities for delivering standardized products across multiple regions.
  • Limited image and platform stability programs.

Apple

All types of enterprises continue to be interested in procuring Macs for all or part of their global PC installed bases. However, Macs still make up a very small fraction of corporate purchases (less than 4%). Apple has intentionally chosen to focus its business on consumers, and does not aggressively develop programs and services for global enterprise customers. For organizations that have a strong dependence on Windows applications, the decision to adopt Apple Macs can be a complex undertaking, as Macs are not directly interchangeable with PCs from other vendors. Organizations that have multicountry operations likely will need to make separate arrangements in each region with local partners, making global deployments more complex.

Strengths
  • Excellent product design and innovation.
  • Ongoing financial and organizational stability, coupled with strong brand.
  • Consumerization, coupled with Apple's strength in smartphones and tablets, has broadened interest beyond traditional strongholds.
Cautions
  • Lacks consistent global service and support capability.
  • Limited enterprise-focused global sales organization and account management capability.
  • Lacks an enterprise-focused product offering.
  • Limited desktop portfolio, and all systems are premium-priced.

Dell

Dell is a strong corporate PC supplier with good global coverage and capabilities. During the past 18 months, Gartner has seen greater consistency in Dell's ability to deliver product and services to customers, as well as a renewed level of competitiveness on pricing. Dell has been expanding beyond its PC roots through acquisitions of software, services and hardware companies. The move to take the company private raises a significant caution. However, overall, we feel if it continues with its current direction, then it will be a stronger supplier of enterprise client devices (see "Dell's Leveraged Buyout Necessitates Scenario Planning for Customers"). Dell is a strong viable supplier for all business PC requirements, and for global and large-enterprise organizations.

Strengths
  • Good-quality products, programs and services targeted to global enterprise customers in mature markets.
  • Strong account management for large-enterprise customers.
  • Improving competitive position with pricing, improved industrial design, and increased focus on software and services.
  • Generally good global coverage.
  • Good understanding of changing market conditions.
Cautions
  • Midsize businesses that do not achieve global account status with Dell may occasionally experience inconsistent service and support levels.
  • Although we expect the immediate impact of the leveraged buyout to be a more competitive stance in the market, customers must watch for signs of operational disruption.
  • Global coverage pattern can result in uneven service and support levels in some regions, especially in emerging markets.
  • While channel partners are playing a more important role in enterprise business compared with the past, Dell's overall channel to market is still limited.

Fujitsu

Fujitsu continues to improve its global execution and provides a good option for corporate purchasing for many organizations, particularly enterprises in Japan or Europe where it remains strongest. U.S. operations focus primarily on vertical markets and remain a weak point, although some improvement has been noted. Fujitsu is a longtime supplier of tablet devices, where it has a strong portfolio of products and good project integration skills. Fujitsu has a strong position in the EU for desktop outsourcing.

Strengths
  • A good range of high-quality, enterprise-class products with global availability, including desktops and thin clients.
  • Strong line of pen-tablet products designed for vertical markets. Good solutions for Windows 8 enterprise tablet implementations.
  • Improving global pricing, account management and service offerings have resulted in slightly improved market share.
  • Strong managed desktop service portfolio across Europe.
Cautions
  • Global presence and investments are focused mostly on EMEA and Japan. North America remains focused on vertical segments.
  • Improving emphasis on global and large account management capabilities, with some inconsistencies.
  • While market share has slightly improved, it remains a small player compared with most of the competition.

HP

HP provides an excellent portfolio of services and products with a strong global presence. Customers are satisfied overall, with only some minor intermittent issues with global coordination and delivery. HP has felt the impact of the downturn in the PC industry more than some of its competitors, with pressures on margins and market share. It has not clearly communicated an overarching strategy for how its PC organization will work with other parts of HP to create synergies for customers. Even with these issues, we have no concerns about HP as a strong enterprise PC provider for all sizes of customers worldwide.

Strengths
  • Generally good understanding of traditional enterprise needs.
  • Good account management for large-enterprise customers.
  • Broadest product portfolio among all competitors, covering all form factors.
  • Strong channel ties provide greater choice for fulfillment; an advantage mostly with midsize businesses and in some emerging economies.
Cautions
  • Overlapping PC brands can be confusing and may get more so in an era of consumerization.
  • Global implementation issues noted in 2012 have not significantly improved in 2013.
  • Slow to adapt to changes in the market; strategy and messaging remain product-centric.
  • The role of the PC and printing group (PPG) in overall corporate strategy has not been communicated well.

Lenovo

Lenovo continues to improve its position in global capabilities and in market understanding with near-flawless execution. As a result of these improvements, it continues to gain market share in the enterprise and consumer markets. Lenovo produces well-designed systems at competitive prices. On the downside, we have seen some signs of growing pains, with sporadic complaints of late deliveries and service disruptions. These issues appear to be handled quickly in most cases. Lenovo is a leading option for organizations requiring global PC deployments, and is a strong viable supplier for all business notebook and desktop requirements.

Strengths
  • Strong product design, and continued investment in development capabilities.
  • Well-established ThinkPad brand.
  • Continuous improvements in its sales strategy, channel and supply chain, combined with an aggressive competitive approach to the corporate market.
  • Continuing geographic expansion in emerging markets.
  • Improved service offerings as a result of bringing coordination and control in-house.
Cautions
  • Expanding product brands are creating some overlap, which can be confusing for midsize businesses.
  • Rise in complaints about delivery and product issues symptomatic of a company that is growing quickly.
  • Aggressive pricing seen in previous years may not carry forward.
  • Differentiation provided by Lenovo's ThinkVantage software tools has eroded. Benefits of recent software acquisitions (e.g., Stoneware) are still not being articulated to customers.
  • Efforts to expand beyond the PC to provide broader services and data center capabilities remain well behind its large competitors, typically requiring customers to deal with multiple vendors.

Panasonic

Panasonic is a provider of ruggedized and semiruggedized notebook computers. Although Panasonic is not positioned to fulfill all of an organization's global PC requirements, it provides a solid level of hardware support and project integration capabilities within its target market. Customers with specific requirements for ruggedized notebooks should definitely examine Panasonic.

Strengths
  • Panasonic has excellent engineering capabilities.
  • It has a strong understanding of selected vertical markets.
  • Panasonic is a viable supplier of ruggedized and semiruggedized products, with a long history of leadership in that niche market.
  • It has a strong understanding of mobile broadband and other wireless integration.
Cautions
  • A lack of desktop offerings makes it inappropriate if a sole PC vendor is desired.
  • Panasonic has invested in global operation expansion; however, the coverage is not yet to the level of leading vendors' global coverage. Global service and support depend on partners.
  • It has limited experience with mainstream users outside of vertical solutions.

Samsung

Samsung Electronics (Samsung) is a rising player in the consumer PC business with a broad range of consumer computing products and a basic, but improving, business PC lineup. It is leveraging its manufacturing, brand and channel capabilities, along with attractively designed high-end systems to expand its presence in the enterprise PC market. Samsung is still building its enterprise reseller channel and lacks central global coordination or globally consistent products. In select regions, such as North America, it provides a dedicated enterprise sales capability. Samsung's high-end Ultrabook products may be attractive for targeted purchases. Samsung is well-positioned to benefit from bring your own device (BYOD) initiatives due to its strong consumer brand and products.

Strengths
  • Strong financial position.
  • Strong product design.
  • Strong manufacturing and supply chain.
  • Growing market presence with overall positive momentum, and market-leading position in adjacent mobile markets (smartphones and tablets).
Cautions
  • Lack of a desktop offering in most geographies limits Samsung's ability to be the sole PC vendor for some enterprises.
  • Lack of overall enterprise strategy.
  • Lack of strong, large enterprise sales and support capabilities makes the company's offerings more appropriate for midsize businesses.

Toshiba

Toshiba provides a wide range of notebooks targeted at business buyers, along with a broad selection of consumer and prosumer systems. It relies on a network of resellers to provide enterprise support and services and basic global account coordination for enterprise customers. In some geographies (notably Canada, Japan and Australia), Toshiba maintains a strong commercial presence. While its overall commercial focus leans toward small and midsize businesses, rather than large enterprises, it has stepped up its enterprise capabilities as reflected by its improved Ability to Execute.

Strengths
  • Strong well-designed attractive notebook products.
  • Strong product development capabilities, with highly regarded engineering.
  • Strong corporate capabilities in select regions, including Japan, Canada and Australia.
  • Improving enterprise management and coordination across countries.
Cautions
  • Lack of a desktop offering in most geographies limits its ability to be the sole PC vendor for some enterprises.
  • Commercial PC focus is on small and midsize businesses, with less attention to large enterprises.
  • Toshiba has made some improvements in service and support, but customers requiring high levels of service and support for their notebooks likely will experience inconsistent execution if operating in multiple countries.

Vendors Added and Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. It may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by that vendor.

Added

Samsung Electronics

Dropped

No vendors have been dropped.

Inclusion and Exclusion Criteria

This Magic Quadrant focuses on suppliers that work directly or indirectly with global enterprise buyers. The vendor inclusion criteria cover more than 90% (by units) of the total desktop and notebook market for enterprises. To appear in this Magic Quadrant, vendors must:

  • Offer desktops and notebooks targeted at professional users
  • Offer business products globally
  • Hold more than 2% market share of the worldwide professional PC market in desktops or notebooks

Evaluation Criteria

Ability to Execute

We evaluate PC vendors on the quality and efficiency of the processes, systems, methods or procedures that enable their performance to be competitive, efficient and effective, and to have a positive impact on revenue, retention and reputation. Ultimately, global enterprise desktop and notebook providers are judged on their ability and success in capitalizing on their visions.

Ability to Execute includes:

  • Product availability — product portfolio and range
  • Overall viability (business unit, financial, strategy, organization) — product quality and availability, service and support, as well as the vendor's financial strength
  • Sales execution/pricing — the availability of special sales teams
  • Market responsiveness/record — ability to respond to changing market conditions to achieve competitive success
  • Marketing execution — the vendor's market share in the global enterprise market
  • Customer experience — the vendor's ability to provide support and services
  • Operations — factors that impact the vendor's ability to meet commitments
Table 1. Ability to Execute Evaluation Criteria

Criteria

Weight

Product or Service

High

Overall Viability

High

Sales Execution/Pricing

High

Market Responsiveness/Record

Medium

Marketing Execution

Medium

Customer Experience

High

Operations

Medium

Source: Gartner (November 2013)

Completeness of Vision

We evaluate desktop and notebook vendors on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs and competitive forces, and how well they map to the Gartner position. Ultimately, global enterprise desktop and notebook providers are rated on their understanding of how market forces can be exploited to create opportunities for the provider.

Completeness of Vision consists of:

  • Market understanding — mechanisms for customer feedback
  • Marketing strategy — the vendor's ability to provide various professional services
  • Sales strategy — the vendor's capability to work with customers through its sales force and sales tools
  • Offering (product) strategy — the vendor's strength in R&D and product design, and the vendor's ability to offer image stability
  • Business model — how the PC business fits within the overall organization, including how it contributes to other products or services offered by the company or vice versa
  • Vertical/industry strategy — the capability of providing vertical-specific services
  • Innovation — product innovation includes an approach to providing alternative application delivery models
  • Geographic strategy — the capability of providing products and services globally
Table 2. Completeness of Vision Evaluation Criteria

Evaluation Criteria

Weighting

Market Understanding

High

Marketing Strategy

Medium

Sales Strategy

Medium

Offering (Product) Strategy

High

Business Model

Medium

Vertical/Industry Strategy

Medium

Innovation

High

Geographic Strategy

Medium

Source: Gartner (November 2013)

Quadrant Descriptions

Leaders

PC vendors in the Leaders quadrant register the highest scores on Ability to Execute and Completeness of Vision. These vendors are well-rounded and capable of dealing with the broadest range of enterprises and customer needs. They all have wide geographic coverage, comprehensive enterprise-focused sales organizations, financial stability, comprehensive customer support, broad product portfolios, longer product availability and large market presence.

Challengers

Challengers have high scores in Ability to Execute, but weaker scores for Completeness of Vision. Challengers often have a strong market presence and financial stability, great products, and good overall channel capabilities and operations. However, they may have limited geographic coverage, lack a strong understanding of enterprise needs, or not focus on the requirements of corporate customers when designing products and services. Challengers may be appropriate for customers with specific regional or product requirements, and are not as concerned with issues such as product consistency, long life cycles, enterprise software and services.

Visionaries

Visionaries have high scores in Completeness of Vision; however, their Ability to Execute scores are not as strong. These vendors tend to understand enterprise needs, and deliver a narrow selection of corporately targeted products, but are usually limited in their offerings. Their market presence may be less than that of the Leaders, and their financial stability may not be as solid. Their sales organizations and customer support mechanisms may not be as comprehensive as those of the Leaders. Visionaries can be acceptable for targeted deployments, assuming a strong reseller or integrator can backfill the necessary services and delivery capabilities.

Niche Players

Vendors in the Niche Players quadrant are relatively weaker on Ability to Execute and Completeness of Vision, compared with vendors in other quadrants. Typically, these players either do not focus on the enterprise market or, more specifically, focus on only a portion of the market (either a specific vertical, region, type of customer or type of user). While they often have a low market share and weak market coverage, they can fulfill specific targeted needs for some customers. Many of these vendors have a strong consumer PC business. It is important to note that a PC vendor's position in this quadrant is not a value judgment on overall suitability. These vendors may specialize in particular areas in a vertical market segment or have product portfolios that are not well-addressed by other players.

Context

This Magic Quadrant is designed to assist enterprise customers in selecting vendors that are able to supply large numbers of PCs targeted to diverse corporate needs. The results of this analysis combine evaluations of the vendor attributes that matter most to enterprise customers when selecting PC suppliers. The attributes we evaluated include product portfolio, global capability, financial health, account management, service and support. This Magic Quadrant covers global enterprise notebook and desktop vendors. In cases where a vendor does not provide desktop systems, we have called it out in the cautions and factored it into the vendor's positioning.

Each vendor's position is accurate for the factors included in this analysis. Clients should assess their priorities and apply these while performing due diligence as part of the vendor evaluation process. It is not uncommon for clients with unique requirements to find that a lesser-known vendor is best-suited to meet their needs.

The Magic Quadrant for Global Enterprise Desktops and Notebooks is updated each year to reflect changes in market dynamics. We evaluate a vendor's position based on:

  • The quantitative parameters we obtain from vendors through a questionnaire response
  • A qualitative analysis based on vendor interviews
  • Subjective evaluations based on extensive feedback from Gartner clients and scores given by each of Gartner's user-facing client computing analysts against a range of criteria

Market Overview

Enterprises come in all types and sizes. While some may be very large organizations with tens of thousands of users distributed globally, and others may be a few hundred users in a single country, they all share certain fundamental requirements that pose unique challenges to PC suppliers. For enterprise customers, price is an important consideration, but not usually the primary purchase criterion. Instead, the purchase decision process considers various factors, including the ability to provide appropriate services and to support global deployments. Working with desktop and notebook vendors that can meet these requirements helps reduce the total cost of PC ownership.

Attributes that we capture in this Magic Quadrant include the commitment to the enterprise market by established professional PC vendors and the likelihood that consumer players will expand their global enterprise potential. Because most corporate customers have moved to a single-supplier strategy for purchasing their PCs, we put a high value on the breadth of products that are supported by a strong channel network. Having a strong reseller channel will become more critical in the coming years. Gartner regards global presence as a significant criterion for evaluating potential PC suppliers. The Leaders in this Magic Quadrant are all international vendors that can provide consistent products and services across multiple regions. Some of the players are global, but without enterprise account management capabilities and/or explicit stable platform programs. Although smaller vendors can also play effectively in the enterprise PC market, lack of global capabilities for delivery and/or support would put them into a Niche Players or Challengers position. Some smaller players specialize in specific vertical markets.

The PC market is a mature market that is undergoing a major disruption. During the last year, we have seen the PC market contract, and most of the vendors face tough financial challenges as a result. The PC replacement cycle, which has propped up overall corporate unit sales, is winding down and corporate buyers are holding onto systems longer. This has resulted in fierce competition, and many PC makers have been struggling to maintain the discount levels offered in previous years, without sacrificing critical margins. As in previous years, we continue to see instances where the attributes that qualify a PC as a business-class model — including long image stability, long product life cycles and a three-year standard warranty — are eroding as vendors struggle to maintain even meager profitability.

Traditional enterprise products are increasingly competing with consumer offerings and new types of devices (e.g., tablets) for the IT budget. While many consumer players are jockeying for position in the enterprise environment, few have made significant inroads. Moving into 2014, PC makers will branch out more aggressively into mobile devices, as well as experiment with new innovative form factors. This will create risks for those who can't provide the right balance of quality, price and differentiation. Although tablets are not part of the evaluation criteria in this year's Magic Quadrant, we have adjusted the weighting around innovation and the overall approach to the mobile market, as well as adjacent products, to reflect the dynamic nature of the market.

With the significant changes made to the underlying measurements, it is not appropriate to directly compare vendor positions on this year's Magic Quadrant with previous years.

Evaluation Criteria Definitions

Ability to Execute

Product/Service: Core goods and services offered by the vendor for the defined market. This includes current product/service capabilities, quality, feature sets, skills and so on, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

Overall Viability: Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood that the individual business unit will continue investing in the product, will continue offering the product and will advance the state of the art within the organization's portfolio of products.

Sales Execution/Pricing: The vendor's capabilities in all presales activities and the structure that supports them. This includes deal management, pricing and negotiation, presales support, and the overall effectiveness of the sales channel.

Market Responsiveness/Record: Ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customer needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.

Marketing Execution: The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of the products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional initiatives, thought leadership, word of mouth and sales activities.

Customer Experience: Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical support or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups, service-level agreements and so on.

Operations: The ability of the organization to meet its goals and commitments. Factors include the quality of the organizational structure, including skills, experiences, programs, systems and other vehicles that enable the organization to operate effectively and efficiently on an ongoing basis.

Completeness of Vision

Market Understanding: Ability of the vendor to understand buyers' wants and needs and to translate those into products and services. Vendors that show the highest degree of vision listen to and understand buyers' wants and needs, and can shape or enhance those with their added vision.

Marketing Strategy: A clear, differentiated set of messages consistently communicated throughout the organization and externalized through the website, advertising, customer programs and positioning statements.

Sales Strategy: The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service, and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.

Offering (Product) Strategy: The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature sets as they map to current and future requirements.

Business Model: The soundness and logic of the vendor's underlying business proposition.

Vertical/Industry Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of individual market segments, including vertical markets.

Innovation: Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.

Geographic Strategy: The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.