CES Countdown #11: Are the desktop PC's days waning?
By Scott M. Fulton, III | Published December 22, 2008, 6:25 PM
Is there anyone you know whose holiday wish list includes a computer weighted down, by design, to his desk? Lack of portability may be becoming a real liability for the desktop PC, but that doesn't mean it'll disappear anytime soon.
It should come as no shock to anyone that general demand among consumers for the desktop PC form factor is at its lowest point in years. The exceptions are at the very bottom of the value chain; but even there, as notebook PCs start to make a respectable value proposition for themselves at $500 and under, it's more and more difficult for their desk-bound competition to compare.
The transition of the consumer market -- or, more accurately, the completion of the ongoing transition -- to one in which the mobile platforms take precedent, may not have to be a painful one. The problem is, entire segments of the component manufacturing industry depend on sustained demand from consumers:
- The world's two principal CPU manufacturers, most notably, continue to base their design strategies around three-pronged attacks: desktop, mobile, and server. Ramping down the desktop segment could cost AMD and Intel money; both would be better off if demand for desktop CPUs were reasonably sustained, or at least permitted to subside slowly.
- Hard drive manufacturers still rely on the classic 3.5-inch form factor. Companies like Seagate have managed to keep that part of the business afloat, but according to its last quarterly report in late October, it only did so by virtue of a tactic of shifting sales to third-world nations where demand for inexpensive computers is high, and reducing margins for resale to the value segment. Seagate might like for this lower-margin side of its business to be outmoded into history, but then what would it do with about 40% of its production?
- Video card manufacturers (even the one that's owned by a CPU maker) are faced with the prospects of diversifying their customer base beyond their traditional enthusiasts, in order just to survive 2009. Two weeks ago in its quarterly report, Nvidia revealed lower revenue from the desktop CPU side of its business by a staggering 42% over the same quarter in 2007. The reason why was explained by the very best semiconductor analyst working today, Mercury Research's Dean McCarron: significantly lower desktop PC demand. By contrast, Nvidia's revenue from notebook GPUs declined only 2% for the quarter, but that's in a business where margins are already tightest. Suddenly those hybrid GPU/CPU "fusion" projects don't look like they should remain on the back burner.
| AMD | |
| Scott M. Fulton, III | |
As a desktop processor manufacturer, AMD has too much at stake. While it's conceivable that future CPU product lines could merge the mobile and desktop lines, research into that prospect could take years. In the meantime, AMD's roadmap going into 2010 includes the desktop segment, prominently. | |
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AMD CEO Dirk Meyer | |
As a result of a massive restructuring last October, in which it was revealed long-time executive Dirk Meyer would take over the CEO role, AMD will outsource much of its production to a new and independent company. AMD will own a minority stake in this "Foundry Company," though the move enables foreign investment to fund the production of the next-generation 45 nm processors the company will need to survive the next round against Intel. That company is already preparing to ramp down its 45 nm production, though AMD hopes to compete against Intel on value, performance, and power savings. | |
Which makes its value proposition for its higher-performance CPUs sound a little dichotomous. AMD is banking on the continued faith of enthusiasts and independent system builders -- a sizable part of its customer base thus far -- to help it mask over some grey areas in its product strategy against Intel's latest Core 2 Quads. Since AMD also owns ATI, the GPU maker that has made some significant inroads during 2008 in the performance department, it can go ahead and do something it once promised it wouldn't: create platforms using preferred components, pairing select AMD CPUs with ATI GPUs. Intel does not enjoy nearly as cozy a relationship with Nvidia, which could mean AMD has at least one sizable competitive advantage going forward into 2009. | |
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But then, there's also a sort of "tsunami effect" -- the wave that comes after the impact. As the report explains, "Since PC manufacturers often build inventories during periods of anticipated growth, they may be left with excess inventories if growth slows or if they incorrectly forecast product transitions. In these cases, PC manufacturers may abruptly suspend substantially all purchases of additional inventory from suppliers like us until their excess inventory has been absorbed, which would have a negative impact on our financial results."
Who would that hurt, and when? Well, the wave would come back and hit the PC manufacturers themselves, as Dell explained in its last quarterly report: "Our manufacturing and supply chain efficiencies give us the ability to operate with reduced levels of component and finished goods inventories. Our financial success is partly due to our supply chain management practices, including our ability to achieve rapid inventory turns. Because we maintain minimal levels of component and product inventories, a disruption in component or product availability could harm our financial performance and our ability to satisfy customer needs."
Dell has always operated with a minimum inventory level -- which is part of the business model CEO and founder Michael Dell originated. Right now, it continues to keep eight days of inventory on hand -- this while competitors talk about having four or five weeks' inventory on hand. Conceivably, Dell should be hurt least by an availability situation; but on the other hand, as demand for desktop PCs fall, the manufacturer from whom parts makers would feel the pain first, is Dell.
And how bad can it get? In its last quarter ending in October, Dell reported US revenues from desktop computer sales fell by 14% over the year-ago quarter. Keep in mind, that's the end of October. Up until the beginning of September, the worldwide PC market as a whole was on course for a growth rate of about 12%, perhaps as much as 14% -- with notebooks somewhat higher, and desktops somewhat lower. In just two months' time, the decline in demand pushed Dell's desktop revenues that much lower, with the rest of the industry right in line.
Next: The alternatives to ramping down, if there are any...

As cloud-computing expands, as it shows every sign of doing, the nature of how desktop pc's operate will also change. The role of the browser will be altered as well. It will become a defacto OS.
OS's will change dramatically. In fact, they will cease to exist as we now know them. Desktops will become more like thin clients as more and more apps are on the network.
I guess Scott was right when he said:"the network is the computer."
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|I believe this is Google has been heading the entire time. Web services, web-applications, all running from the net, all running through your browser (not quite sure where Google Earth and Picasa fit into that).
I figured if they made their applications and services innovative and useful enough, they might be able to make the OS irrelevant and eventually use a "Google Desktop Update" to wipe the underlying OS completely, replacing it with a slimmed-down, efficient, and lean version of linux or some such.
Heh... Not quite as Conspiracy Theory Kook as the Google Grid, but close. ;)
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|well, as desktops become more powerful, they should also become smaller.
motherboards should be getting smaller while the processor is becoming more powerful and larger. the day will come that the motherboard will simply be replaced with one giant cpu.
moving parts like rotating disks of a hard drive or cd, etc will become a thing of the past.
further with the invention of microsoft's ready boost, peripherials like more powerful video cards, more memory, etc.., will soon be able to plug into connectors, instead of directly onto a clunky motherboard.
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|What does Ready Boost have to do with connectors to plug in video cards and RAM??
Ready Boot is a caching technology.
Are you by chance referring to the PCI-E bridge being developed to allow external PCI-E devices?
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|Destop days may never die. Simply cause it's to vital to to many people. Tell the 11.5 millions people paying to play World Of Warcraft that it's going away. Laptops are nice, but for alot of people it will never be the same. Besides my 15.4 inch laptop will never look as good as my 30inch monitor.
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|Laptops don't exclude you from having a large monitor.
Many desktops today actually have laptop-based motherboards inside of them.
The desktop will eventually die, there is no technical reason for them to remain around. eventually laptops will have exchangeable parts just as desktops do.
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|Seriously.
I am using a D630 Laptop right now with a 24" monitor. Hell, I could hook up 2 of them if I wanted to. Imagine the amount of space on *that* desktop*.
As for playing WoW, it works on my old Inspiron 1150 (barely), ffs, it'll work on *any* newer model laptop.
Also, keep in mind, the PCI-E external bus adapters they are working on and you quickly realize the mobile gamer/designer never had it so good...
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|Some people despise notebooks, others despise desktops (like me). My very first computer was a Toshiba Tecra 510CDT notebook in 1994, I have bought portables ever since.
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|So true, and I like them both as they both have a place in our lives. BUT the question is, what will it be like 25 years from now? If I live that long, will be interesting to see.
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|In our house we have one high end laptop for my game playing college age son, one MacBook for my recently graduated daughter, two average laptops for my wife and me and one new netbook. Not a desktop in sight. I'll never buy another desktop.
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|The laptop is the methadone for the people that are addicted to computers (like me). Desktops will always be around. Unless you wanna lug a laptop around with a 25" screen. Desktops are cheaper, easier to upgrade and come with 1000x more choices for customization. Plus, a lot of people are taking care of the basic portability solutions through a cellphone.. so I think its the laptop that might have to start looking over their shoulders.
Sometimes people want to sit in a big leather chair looking at a full keyboard, a high DPI mouse and marvel at the wonder that is this monster powerhouse.
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|When businesses are able to spend money to replace old IT, desktop demand will rise accordingly. This story is much like the 'Year of the Linux desktop" story ran every year. I've been reading about the demise of desktops for over a decade. But it ain't gonna happen. Not in my lifetime.
I've already got mobile computing in my smartphone. Why would I want to lug around a 17" laptop? Maybe a Linux netbook at most, but that won't replace the desktop PC.
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|The desktop won't die for a very long time. The biggest problems facing laptops is that batteries will never last long enough under heavy use and the fact they they are always weaker than their desktop counterparts. The lack of upgrade ability in a laptop makes this even truer. Desktops will also always appeal to gamers simply because overclocking in possible. You over clock a laptop and it's liable to melt either in your lap or it will melt your lap.
It will definitely take quite a bit new technology to dethrone the desktop.
P.S. I asked for parts for a desktop for Christmas, so I do wish to be weighted down!
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|Laptops have their place and so do desktops (this is an old arguement). At the point where desktops finally fade into complete nothingness (like win95)...it is more likely that laptops will fade out aswell and make room for something completely different. Something we all have yet to see.
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|Surely this is something the major computer makers could see coming for the last 2 years or so? It has been widely discussed in tech circles on blogs, forums, and even in technology magazines. It sounds like the CEO at AMD doesn't have the ability to see around the corner, to imagine how things will be a year from now and up to five years from now. Seagate has gotten caught up in the "bigger is better" syndrome and hasn't done much to stay flexible with the changing market. I know it's hard to anticipate totally new technology, but the laptop and handheld mobile computers have been gaining steam to the point that laptops have hit the early majority of the marketing curve. If you haven't adapted to something by this stage in the game, you have to go into defense mode. It's tough to make sound decisions and creative moves once you're fighting just to stay alive. Yahoo could give AMD some sympathy here.
Meanwhile, I'll continue enjoying the freedom and flexibility of using a laptop as my primary computer. When we replace our office computers in March, they will be laptops so I won't be stuck sitting at our desk to enter data. I can take my work to our front porch and get some sun. We'll have more storage space once we ditch our bulky towers, and I won't have to lean way over every time I want to hook up a USB device. :D
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|PC desktops will be obsolete in a few years but the iMac and Mac Pros will forever be appealing to the masses, especially to the music, video and graphic design industries.
There's really no need to have both an iMac and a MacBook Pro. The new MacBooks and MacBook Pros are just as powerful as the iMac. All I need is my 24" Apple Cinema Display plugged into my MacBook Pro when I'm at home and a regular Apple keyboard and mouse. It feels every bit like a desktop.
Unfortunately the PC world knows nothing about this type of seamless integration.
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|Yeah... We don't have nifty things like USB ports, DVI connectors, or docking stations....
*yawn*
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|Obviously the fanboy likewise has no use for Firewire and Expressbus(in the MacBook), wireless USB, eSata, gaming capability, CrossFire or SLI, i7 or Shanghai,
Lucid's Hydra dynamic multiple GPU load balancing processor where one need not log out and log in.
You know, none of that current technology that the MacBook knows little or nothing about...
In other words, unless its an overpriced and under-performing mediocre laptop lacking any expansion capabilities or future orientaion, he would have no idea what you are talking about.
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|Let me know when you guys get something equivalent to a gorgeous aluminum 24" Apple Cinema Display, Mighty Mouse (yeah that's right, The one and only Mighty Mouse), OS X, iLife & iWork ALL seamlessly integrated and working right out of the box and I just might downgrade to a Windoze PC.
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|There's just something about Apple's "latest and greatest" offerings that remind me of Pontiac Fiero kit cars...
Sure, they look pretty on the outside, but basically it's all the same mediocre under-performing crap under the hood.
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|Wireless USB, gaming ability, and all the other things you mentioned are frivolous extras that almost nobody needs. No laptop will ever have expansion capabilities that make sense, prices for new laptops come down too fast for it ever to be justified to attempt upgrades.
Any laptop can use a big monitor, and "seamless integration" is marketing wankspeak. The same mice can be used on macs or PCs, so why even mention them? The programs people use, a browser and a word processor, work totally fine on PCs.
A great PC laptop costs $500, a great Macbook costs $1000. If you are an average Joe, unfortunately, the odds that you will destory your PC beyond repair with malware are pretty high. With a Mac, you would be safe.
So, do you feel lucky? Can you outwit the malware? If so, save the $500 and buy a PC. But if you are not a tech expert, you are probably going to destroy that PC (even if you think you have antivirus software). You'd be a lot better off to buy the $1000 mac.
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|lol..."seamless integration" has been the primary direction for personal computers since the dawn of their inception.
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|Well, personally, I'd rather spend that same grand and build my own....still be better off and still be safer.
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|*laughing*
Gateway was selling 30" displays in the 90's. The mighty-Mouse is functional, but there have been more functional mice in the PC space for decades.
OSX, iLife, and iWork, last I checked, weren't peripherals, genius. Do try and keep up with your own posts...
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|it is not the laptop that will be redefined, as suggested in another article.
but it will be the desktop that will be redefined as a relic and a dinosaur.
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|Laptops will need to hit 2 specific points for them to really get into the home pc market.
1. be easily upgradeable and
2. run games as well as desktops
It can be argued that both points have been achieved, however they do so at a considerable difference in cost/pricepoint.
For eg. you will probably be able to get a desktop that plays all games currently on the market at a comfy 40fps or higher for $500. In a year you can get a better gfx card allowing the same pc to run the high performance and req. games made then, chances are the cpu and ram are fine, but if not you can upgrade them as well.
This isnt the case for any laptop on the market currently. Laptops that meet even low end gaming pc specs are running upwards of $1500 and sli rigs in the 2k region. Until this changes, I think PCs are safe in general.
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|"Laptops that meet even low end gaming pc specs are running upwards of $1500..."
Not true. I got a: http://www.bestbuy.com/s...ct&id=1211587727985 for $1079 a month ago. Best Buy has in store specials all the time. this machine plays Warhammer Online at 1920x1080 with everything set on high without breaking a sweat.
The only bad thing about this machine is Vista x64. I do not see how Gateway is making money on these things. Looks like they are going to announce a new version of this machine at the CES as they moved this machine to outlet stores only.
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|FYI: Now $1,279.
Looks like a decent lappy.
They're finally getting some of this stuff worked out.
The advent of the PCI-E slot will help a *lot* in this space. Being able to plug in a a new GPU (or SLI/Crossfire) will be a big boost to the laptop's abilities.
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|I agree with you. Until you can add another graphics card and/or replace graphics cards on a notebook...and until ram isn't shared with the graphics and processor, I don't see desktops going anywhere.
Fatty, MMO's are always less graphic intensive than say FPS'. Try playing Crysis on your system and you'll see what I mean. Plus next year even more graphic intensive games will be out and you'll definitely see a slow down. I'm not saying you don't have a good laptop at a great price, but put it against a PC you can buy (or in my case build) for the same price and I can blow your laptop out of the water.
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|That's a VERY nice system and I'm sure it'll handle a bunch of games - and it's at a really great price BUT my point still stands...if you compare spending what you did on that laptop, you're going to get quite a bit more power out of something you can build or even buy premade from one of these pc makers. And for that reason alone the desktop is still very much in demand.
Just as an example, I'm running old stuff, a c2q 6600 with 8gb of ddr2 ram and a tb of hd space with an 8800 GT and I built it for less.
If anything, I'm thinking laptops may taper down and you'll see more netbooks fly off the shelves since they meet exactly what most people want laptops for, which is to sit on the couch and surf or go mobile and not have to use their cell phone (other than businesses and gamers).
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|Espressed as simplistically as the title suggests - of course not!
But that fails to address the various market segments!
On the Enterprise level, virtualization, security concerns, central admin, and other factors are presenting new, more cost efficient models.
But are home users and gamers necessarily looking for a virtualized server based distributed client system? Hell no. (Although they might consider such a configuration throughout a house.)
So, in order to address the circumstances, a MUCH better job must be done to ask the right question and to differentiate the various uses and applications.
And no, a one size fits all model is not necessarily appropriate for all users and uses ranging from a casual user, to a gamer to a SOHO or to an enterprise CSR to an enterprise workstation.
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|This article did not analyze the consumer desktop workstation form factor, and I believe that much is very, very clear. This is about the consumer desktop PC, which is an entirely different market. Now if you ask me, the desktop form factor in the enterprise is very safe. No threat to its existence there at all, because these are systems that must be purchased in bulk.
-SF3
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|I ABSOLUTELY disagree.
Virtualized centrally managed secure 'thin' clients are DEFINITELY making significant inroads into enterprise environments!
NComputing and Pano Logic, to name just two of many, offer significant cost savings, security, reduced admin overhead, while sacrificing little to nothing in terms of functionality.
In fact, in the last six months we have speced more of these virtualized desktop systems than we have any system with standalone desktops - especially when addressing systems for CobIT and ISO27001/2 compliant systems and the need to satisfy audits. And at an average of $300 per seat, there is no standalone that comes close to satisfying, let alone competing with that price point - and that fails to factor in savings due to reduced admin overhead, software costs and security exposure.
In fact, assuming an in place infrastructure with mature policies and procedures, replacing the standard desktop with a thin virtualized desktop offers one the most effective reductions in both security exposure while simultaneously reducing hardware and admin ROI as costs and labor are significantly reduced!
And rather than being limited to the enterprise, schools comprise tha largest 'walk-in' customers as they are increasingly pressed to deliver high quality systems with minimal administration staffing capabilities, and most of all, cost savings!
You might want to take an afternoon and attend a VMWare event and witness 1/3 of the booths featuring such systems, while another third offer centralized consolidated server/host configurations for hosting virtualized servers to support the 'thin' clients.
Not to mention, that if you are running 2 or more desktops in a home, one might want to take a look at this topology as well, as they can easily entend the functionality of their system while saving money and increasing capabilities.
(And I use 'thin' clients in a distinctively different manner than what they have represented in the past - these are NO VT100 terminals!)
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|Oh, having spent time with these virtualized systems, and being an active proponent of virtualization myself, I completely agree that thinner clients with virtual desktops are smarter and more cost effective alternatives to bulk PC purchases. Right on the money.
Does that mean businesses will make the switch? Nope. Virtual environments take brainpower to manage, and I've watched too many companies actively, thoughtfully decide that it's easier to throw your money at cheap, throw-away PCs than invest in virtual architecture. Sure, VMware will continue to make inroads, as it should. I personally hope it does catch on, but I've been hoping for this entire decade.
-SF3
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|The fact is, they ARE.
And a decade ago? Except on IBM RS6000s and AIX, virtualiztion on the server level was unheard of; let alone a virtualized desktop client!
And virtualized desktops eliminate a LARGE portion of the required admin staff, as only the centrally managed image need be attended to.
So, after you eliminate much of the admin overhead in terms of time and labor costs, and reduce security riak exposure and liability, and considerably replace your 'throw away PC that will cost you signifcantly more than $300, withOUT the performance available on a virtual desktop, there are substantial cost and security advantages with out sacrificing ANY capability - in fact, you can actually increase it!
But your objection sounds exactly like that we heard 5 years ago when we suggested VMWare for cheap, cost effective poor man's high availability to the Windows server crowd.
They too thought that the notion nonsensical as well - what with the plethora of cheap throw-away servers Dell, Compaq and HP were throwing out the windows! But then, many of those same naysayers are no longer in those companies - yet VMWare is.
Server virtualoization has gone no where as well. And now robust viable desktop virtualization has arrived on thin clients.
It will never fly. LOL!
That being said, its one of the areas in which one might be wise to buy stock! Especially with further pressure to reduce hardware and support overhead costs while doing more (in terms of security and capability) with less.
And as I mentioned, the schools are eating it up.
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|So virtual desktops are hot stuff, and server virtualization is "going nowhere"?
My friend is a systems engineer for the largest educational software company in the world. He covers the largest territory in the most profitable market that his company has. Not a single school district in the region uses desktop visualization. We're talking the better part of two states. But there are dozens of virtual servers running in many of those districts, and most of the others are training people right now for VMware implementations next year. This mirrors exactly whats happening in the private sector according to every source I've seen or heard from. You start talking about virtual desktops to most IT guys and they look at you like you're trying to sell them Betamax VCRs. They already have the PCs..why would they toss them out and replace them with slower, less capable "thin" units that demand far more network bandwidth? Its completely illogical. What excites a system admin is the prospect of running a completely isolated Squid proxy on Linux, a Windows 2003 web server and a Windows 2008 app server on the same big box, which they can manage from any computer on their WAN or from the actual server itself. And if they have to migrate those servers, it involves copying a few large files from the one box to the new one - if that! Every engineer, every admin and every IT specialist or contractor I've talked to in the last year has left no doubt in my mind that this is a nearly universal s***. Your experiences must be a major exception to what everyone else is seeing and doing.
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|Are you completely stupid?
"So virtual desktops are hot stuff, and server virtualization is "going nowhere"?"
You somehow got THAT nonsense from what I wrote??????? Aside from a SARCASTIC reference?
"They already have the PCs..why would they toss them out and replace them with slower, less capable "thin" units that demand far more network bandwidth?"
Slower units with more bandwidth?
The desktop doesn't make any additional demands for data bandwidth - that is all hosted on the server!
Next....
As obviously you are the deer stuck in the headlights wondering what one of the clients actually are.
Desktop vitualization with thin clients is following close on the heels of server virtualization. And slower? Oh, you must be noting your inability to keep up! They actually run faster in many cases!
Yup, and Intel didn't lose a 'small' contract to whom? Oh, that would be NComputing.
All of the advantages you cite are gained in spades with a virtual desktop, as you ONLY have to admin the host server images - which can be done remotely from any server worth having. In fact, you no longer have to effectively deal with desktops with the exception of the ONE image for all of the desktops. Remotely. With the backup image stored and easily deployed should any problem short of the entoire server going down.
What is apparent, via your description of your imagined alternatives and objections, is that you are NOT familiar with these systems!
And you imagined system is limited to be admined ONLY via the WAN? How incredibly limited!
And what is also apparent as you focus on the OLD news regarding the notion of a virtualized server, is the real growth in the market segment.
With almost all of the major players scrambling to offer products in this arena, it can hardly be called a dead market.
And just to cite just IBM's pricing metrics:
"IBM said standard pricing for a 1,000-user VERDE deployment would be $49 per user.
Compared with Microsoft desktop shops, IBM and its partners are claiming significant savings for companies with a large user base using their new bundle. Appealing to cost-constrained shops around the world, they claim that the virtual desktop will yield savings on licensing costs ($500 to $800 per user on Microsoft licensing), hardware (no need to upgrade), power consumption and IT services (90 percent savings of deskside PC support; 75 percent of security/user administration; 50 percent of help desk services such as password resets, and 50 percent for software installations).
"When we look back several years from now, I think we'll see this time as an inflection point when the economic climate pushed the virtual desktop from theory to practice," said Inna Kuznetsova, director, IBM Linux Strategy. "The financial pressures on organizations are staggering and the management of PCs is unwieldy. Today's virtual desktop is delivering superior collaborative software, an innovative delivery method, and an open-source operating system that is demanding clients' consideration."
Solutions such as this will become more of the norm in 2009,especially if the economy continues to decline and business organizations seek out cost-cutting alternatives.
And that is not even to emphasize driving issues such as security. Yup, virtualization is going nowhere.
Now, as you are unable to distinguish sarcasm. you can cite me as actually saying virtualization is dead... LOL!
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|i never thought i would get rid of my desktop for one reason...games. Well, since i got a Gateway P-7811 FX, i have not had to use my desktop for gaming.
Going to install FreeNAS on it this week. Adios desktop...
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|I think that, certainly, many current desktop systems can be replaced easily by laptops - for instance, most business PCs. A smaller, cheaper, slimmer model can easily meet day-to-day tasks. Same for college students. When at a work desk, they can be plugged into a larger monitor and keyboard/mouse easily.
But the market will always remain for desktop PCs. High-end use and developers need them. High-end gaming needs them. Video and graphics editing need them. They are basically light servers.
Hell, my SLI graphics cards are larger than most laptops. And the GPU utilization does come in handy. Laptops still can't swap SATA drives, and repairs or upgrades are usually out of the question.
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