Businesses are buying technology and lots of it, say some of the major enterprise vendors, including Hewlett-Packard, IBM and Dell. But consumers are holding back.
While sales of servers, storage and networking gear grew in double digits in the last quarter, consumer PC spending dipped into negative numbers for Dell and HP. IBM focuses on the business market.
In its latest quarterly report on Tuesday, HP said business hardware sales increased 22% from the same quarter a year ago. Dell last week said its large enterprise business was up 12%, and IBM last month said hardware revenue grew 21%.
However, the hardware gains are being dampened by consumer spending. The notable exception in the consumer market: Apple, which last month reported a revenue gain of 71%, thanks partly to sales of 7.33 million iPads in the last quarter.
HP said its personal systems group, which includes PC sales to consumers and businesses, declined 1%, despite an 11% increase in growth in PC spending by businesses. Dell said its consumer segment was down year over year by 8%, "relative to a strong Windows 7 launch last year."
Analysts see multiple forces impacting consumer PC buying at HP and Dell.
If you assembled all the things affecting PC sales at enterprise vendors into a word cloud it might look something like this: "Apple" would dominate in bold jumbo letters, and perhaps in similar-size letters would appear "economy," along with still-smaller names of the various Android tablets, and the names of vendors selling heavily discounted PCs.
HP's CEO, Leo Apotheker, didn't cite competition from alternative devices but instead blamed the economy, pointing to "continued softness" in the consumer PC market in explaining the results.
But some analysts were giving at least partial credit to Apple for the PC sales. "Independent business spending came back very strongly, but interest in and actual sales of the iPad have taken an impressive bite out of the consumer PC business," said Rob Enderle, an analyst at Enderle Group.
Similarly, Andrew Bartels, an analyst at Forrester Research, sees the impact of Apple at work. "Demand has been siphoned off from the PCs and is going into iPads and similar things," he said.
But Crawford Del Prete, an analyst at IDC, said weak consumer demand was the reason. While it is possible that the iPad affected demand at the low end of the PC market, he said he also believes that HP chose not to participate in some discounting that other PC suppliers offered.
That explains why operating profits improved for PCs, even as revenues were down, he said.
Bartels said the underlying business growth at HP may not be as strong as it seems but was helped by its purchase of 3Com last year. HP reported 30% growth in routing and switching, but overall business spending on technology is declining, he said.
IDC said the worldwide PC market continued to slow in the fourth quarter of 2010 due to the economy and media tablets. Global PC shipments rose "only a modest 2.7% year-on-year" in the last quarter.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed . His e-mail address is email@example.com.