PCaaS Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

PCaaS Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global PCaaS Market is anticipated to grow with a CAGR of 35.36% during the forecast period. The increasing need to reduce IT staffing costs, workload, and the adoption of PCaaS by small- and medium-sized enterprises (SMEs) are the key factors driving the demand in the market. Recently, HP Inc. presented a comprehensive set of PCaaS offerings for customers and channel partners, including the launch of DaaS, an evolution of PCaaS aimed at simplifying and speeding up IT management, thereby reducing IT staffing costs by providing a comprehensive, end-to-end solution for businesses.

Key Highlights

• The increasing IT budget and focus on business support applications are the vital factors driving the market's growth. According to Spiceworks Ziff Davis, by the end of 2022, about 64% of the enterprises (+500 employees) plan to raise IT budgets. Also, some of the major reasons for IT budget increase include increased priority on IT projects (49%), a need to upgrade outdated IT infrastructure (47%), and increased security concerns (44%). Furthermore, by 2022, 9% of the total software and hosted/cloud-based services budget is expected to be allocated for business support applications. The emphasis on improving business applications in line with an increase in the IT budgets creates new opportunities for the PCaaS market.
• Efficiency plays a vital role in SMEs in terms of IT expenditures. Owing to the benefits that PCaaS offers, the adoption of these solutions is high among SMEs. According to Intel, small business workers lose more than one workweek per year due to old PCs that use outdated technology. The PCaaS offering is expected to evade unnecessary costs related to efficiency, security, and workforce productivity. Such advantages will likely drive the demand for PCaaS in SMEs during the forecast period.
• An assessment done by Schneider Electric and Hartford Steam Boiler in the past year revealed that there lies a large number of factors that contribute to equipment failure. These factors include environmental issues (8%), humidity (9%), and improper operations (9%), among the many factors responsible for the failures. In another survey conducted on 200 executives by Honeywell, around 42% admitted operating equipment in a way that they should not, ultimately leading to equipment failure. Such scenarios indirectly add to the demand for PCaaS services, especially in the case of large organizations.
• Despite PCaaS improving employee flexibility, customer experience, and ROI, lack of product differentiation is a factor that affects the market's growth. Most of the players in the market offer similar benefits to the clients, which include monthly fix time payments, PC lifecycle support, and improving productivity, among others.
• With the growth in the cloud-based desktop services during the COVID-19 pandemic situation, PCaaS packages have been highly efficient and cost-effective for supporting [work-from-home] employees, according to Pund-IT. In the long run, the adoption of PCaaS is expected to increase in line with the strong digital transformation and the need to reduce IT costs for business continuity.

Key Market TrendsEducation is Expected to Register a Significant Growth

• Survey research shows cloud SMEs are more likely to adopt PCaaS and refresh PCs than SMEs with an ad hoc cloud approach. Similarly, SMEs with an organization-wide mobility strategy are more open to PCaaS than those with siloed mobility initiatives.
• According to a survey by Techaisle, 9% of SMEs have adopted PC-as-a-Service (PCaaS), and 32% are aware of PCaaS plans. Acquisition of the latest technology, the potential to reduce IT support workload, and predictable costs were key reasons for using PCaaS. Awareness of PCaaS increases from a low of 21% (unweighted) among small businesses to a high of 64% within 500-999 employee size segments.
• The growing digital adoption in SMEs has led to a need for PCs across the globe. According to HP India, PC has emerged as more users sign in from home. The need for adoption was even greater for SMBs where digitization levels were traditionally on the lower side. More importantly, SMBs in India recognized the importance of going digital to revive their businesses. Also, three-quarters (75%) of the surveyed companies believe digital adoption is essential to their success. The need for PCs also pushes the growth of the market.
• Vendors' get-what-you-need and pay-as-you-go financing models make it suitable for SMEs. Thus, with the growth of technologies and support from vendors in the market, the adoption of PCaaS is growing in SMEs. Also, the increasing demand from small and medium-scale organizations due to the cost benefits is a critical factor driving the growth of the PCaaS market. SMEs are vital for all countries around the globe as they contribute significantly to the GDP.
• Organizations are growing rapidly in terms of technology adoption, which also contributes to market growth. According to European Commission, the major technologies adopted by SMEs include cloud computing (43%), high-speed infrastructure (32%), smart devices (21%), big data analytics (10%), and others. The growth in cloud adoption compliments the push for cloud PCaaS solutions that offer SMEs strong data security and protection.
• The number of small and medium-sized businesses (SMEs) in the European Union was estimated to be approximately 22.6 million. The majority of these are micro-sized businesses with less than nine employees. Another 1.3 million businesses were small businesses with between 10 and 49 employees, while another 200,000 were medium-sized businesses with between 50 and 249 employees. The European economy is largely made up of SMEs. For instance, SMEs contribute 93.1% of the economic value added in Malta, whereas they account for 82% of the added value in Germany.

North America is Expected to Hold the largest market share

• The United States of America is one of the biggest markets for PCs due to the presence of major players, such as Dell, HP Inc., Samsung, and others. 2021 proved to be one of the best years for the display monitors market due to increased consumer and commercial demand. Moreover, with the surge in demand for PC units, the market is expected to grow and expand drastically within the region.
• Customers also prefer the PCaaS model in the commercial market offered by large corporations like Dell since it provides no upfront costs, fixed monthly rentals, and the most recent features for antivirus, security, data removal, recycling, and trouble detection. Throughout the projected period, all of these variables are anticipated to support the demand from the commercial sector.
• Some of the key firms in the sector are also based in the area, such as Microsoft, Dell EMC, and others, which are continually investing in developing the technology through R&D, strategic partnerships, and mergers and acquisitions, which have allowed them to gain a stronger footprint in the market. For instance, in November 2021, HP expanded its digital services portfolio to support companies' growing demand to make IT more adaptive to change, deliver more consistent end-user experiences, and leverage new service consumption models that match the various businesses' expectations. Designed for small and medium-sized companies, the new HP Subscription Management Service enables companies to make software investment decisions based on reliable workforce intelligence.
• The region is one of the biggest leaders in cloud adoption, which has helped PCaaS and DaaS companies use the cloud's advantages. For instance, VMware disclosed its intentions to introduce the Managed Desktops Solution, a new DaaS service on the VMware Cloud on AWS. Over the projected period, this is expected to accelerate the adoption of the technology.
• The COVID-19 pandemic caused a rapid shift in the working environment in Canada. Remote working methods helped raise Canada's office vacancy rate during the COVID-19 pandemic. According to a report from CBRE, the national vacancy rate for offices increased by 3.1% from the start of the pandemic till February 2021. This has caused Canadians to invest less in traditional PC setups and shift toward adopting PCaaS to reduce permanent asset investments. Moreover, with hybrid workplace models implemented, businesses are expected to increase their dependence on services like PCaaS.

Competitive Landscape

Due to the existence of several large players like HP, Fujitsu, and AWS, among others, there is intense competition among the competitors in the PCaaS industry. They have a competitive advantage over rivals due to their continuously innovating their product offerings. Additionally, they have expanded its market presence because of significant investments in mergers and acquisitions, strategic alliances, and research and development.

• November 2021- WiteSand and SHI International Corp. have established global cooperation that would assist businesses in using cloud networking to lessen the effects of supply chain-related hardware purchase difficulties. This will facilitate SHI's smooth transition of "PCaaS" computer-based services to the end user. To assist its clients in managing multi-vendor networks and converting brownfield networks to the cloud, SHI would make WiteSand's whole suite of cloud-delivered services available, accompanied by AI/ML and end-user experience data, to enable a smooth transition.
• November 2021- HP collaborated with Nexthink, enabling HP to introduce a new solution geared at assisting businesses in transforming the employee digital experience. IT teams will find it simpler to assess employee sentiment and perceptions in the full context of events occurring in the IT environment due to the new HP Proactive Insights Experience Management solution. When HP's services and skills are combined with Nexthink's capabilities, IT teams will have the knowledge and feedback needed to provide a superior digital employee experience.
• September 2021- Lenovo unveiled Lenovo TruScale, a new portfolio-spanning everything-as-a-service offering, as part of its announcement about transforming its consumption-based business model. This announcement is a part of Lenovo's ongoing transformation in preparation for the next reality, a period in which consumers and corporate leaders must adapt to radical change in business, education, living, and other areas.

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