Netbooks Play Small Enterprise Role
As Windows 7 nears, more enterprises consider inexpensive netbooks -- but only for a narrow range of applications.
While netbooks continue to heat up in the consumer marketplace, the enterprise is still a cold and lonely place for these mini-laptop devices. Even the newest netbooks don't have the manageability, processor speed, graphics capabilities or right-size screen and keyboard to support most enterprise applications.
Admittedly, the price of a netbook, which averages between $300 and $500, is enticing to enterprises accustomed to spending more than $1,500 for a laptop. But users say that, in most cases, other factors make widespread enterprise netbook use impractical.
"For true enterprise use, Windows-based thin clients, laptops and desktops work best," says John Halamka, CIO of Beth Israel Deaconess and Harvard Medical School in Boston. Halamka tested several HP Mini netbooks, and has a few dozen of his remote workers currently using HP Mini 10s. However, Halamka believes that netbooks are more difficult to manage and harder to use than traditional computers.
His primary complaints would give any enterprise IT executive pause. "Netbooks don't have the same warranty that we get with our business-class systems," he says. "And they don't come with XP Pro, only XP Home. Thus, they can't join our domain and we can't control updates."
Beyond their lack of manageability, netbooks aren't ideal for productivity. "The keyboard is hard to type on if you're a touch typist, due to the size," Halamka says, noting that Mini 10 keyboards are about 92 percent the size of traditional keyboards.
Still, IDC estimates that in 2009, 9.3 percent of the estimated 26.5 million netbooks sold in the United States will go into the small business and enterprise segment, and that number is expected to grow slowly over the next five years (see "Netbooks Slowly Penetrate the Enterprise"). And while that percentage pales in comparison to the 86.4 percent slated for the consumer marketplace, it does mean enterprises are closely evaluating netbooks and, in some cases, finding valuable niche uses.
When Netbooks Work
Halamka notes that netbooks work in his environment for one particular use case: remote workers who need simple Web application access. "Web-based applications generally require minimal hardware capabilities, so netbooks are adequate," he explains. "Laptops are overkill for most Web applications."
Others agree. Like Halamka, Andy Abramson, CEO of Comunicano Inc., a Del Mar, Calif.-based marketing firm, says his staffers use netbooks for accessing Web-based applications -- and specifically cloud-based services, like Software as a Service (SaaS). "In that case, raw computing power isn't needed on the device because the processing is being done elsewhere, in the cloud," Abramson says. "Netbooks work well in those cases because you don't have to carry an awful lot of technology with you."
Abramson says the main usage for netbooks at Comunicano is for traveling workers with lightweight computing needs. He has doled out about 15 netbooks to his staffers so that they can use them as "companion" devices during travel, not as replacements for their primary laptops or desktops.
"We have a lot of people who just need to do e-mail, word processing and things like that when they travel, and netbooks work well for them," Abramson says, noting that his company's netbooks -- which include everything from low-end models from Acer Inc. and ASUSTek Computer Inc. to higher-end models -- are XP-based and configured with Microsoft Office. "For us, netbooks are small, light, petite, attractive, fashionable and full-featured. They're like a laptop without all the bulk."
Abramson says he takes his netbook, which has a 10-inch screen, with him whenever he travels, "especially on an airplane," he says. "If you use a 15-inch laptop and the person in front of you leans back, blam! Your screen gets crushed. Not so with a netbook. So that's a big use case for it right there."
Not Ready for Prime Time
Richard Shim, research manager at IDC's Personal Computing Program in San Mateo, Calif., acknowledges that some enterprises are looking to netbooks as companion devices, but says that widespread enterprise use won't take off in that scenario until netbook makers and application vendors make more strides in software and synchronicity.
"Part of the challenge with netbooks is that there's no aspect about them that would define them as companion devices," he says. "From a software perspective, you're running the same software as you would on a primary PC or traditional notebook or desktop. There's no savings."
Shim does, however, see that beginning to change. "The industry is gradually moving toward coming up with software that will allow you to synchronize content between those two devices -- between your primary system and your netbook," he says. "As that happens and as it becomes more fine-tuned, you'll see enterprises and others look at these things as companion devices and start to buy them up because there will be more of a specific usage model around it."
Comunicano's Abramson says he and his staffers have no problem synchronizing content between their netbooks and primary desktops because he stores all his data in the cloud.
"Everything works perfectly," he says. "I let my data sit on a cloud-based storage facility called JungleDisk [that uses Amazon's S3 storage technology]. So I simply log on and grab my files. It's all sitting up there. And since I don't keep a lot on my desktops, disk space is immaterial to me."
That lack of a need for disk space is a good thing. Netbooks usually average about 1GB of RAM and about 160GB of disk space; pretty minimal in comparison to today's laptops.
Abramson does offer one caveat to enterprises considering netbooks for cloud computing activities: "You need a good 3G service to make it all work."
That brings up another obstacle to enterprise netbook use. "Theoretically, you should see more enterprises looking to netbooks to support cloud computing," IDC's Shim says. "But the challenge is that you need to connect to the cloud, and that connection is the obstacle because those service plans are still really expensive. It's hard to justify having a totally different account that costs between $40 and $60 a month, on a secondary system that you're not using all the time. Cost-wise, it doesn't make sense."
Abramson agrees, but says carrier deals could help bring the price of the actual netbook down even further, mitigating the service cost somewhat. "You'll see more and more 3G deals and you'll see multiple players in the U.S. offering them," he says. "Over in Europe, you walk into a mobile store of a carrier and you see three or four [netbook] choices. They're giving the netbooks away to get people to sign data contracts. You'll see more of that here eventually."
On average, Abramson says he pays between $300 and $500 per netbook. "But I also got one for $99 when I signed a two-year data contract with AT&T," he says.
Extra Device, Extra Plan
Even as prices come down, the need for additional carrier plans can still be a sticking point, as most traveling users with netbooks also need to carry a cell phone for making voice calls.
Abramson says his staffers carry phones in addition to netbooks when they travel. "You can use things like Skype for virtual calls on the netbook, but I still need to carry a cell phone because you don't want to be taking your netbook out when it rains," he says. "Plus, it's awkward. I suppose you could have a knowledge worker sitting at a desk with a Bluetooth headset use the netbook as a phone via a service like Skype or Gizmo Project. It's possible. But it's not the easiest experience."
Still, Abramson says he wouldn't trade his netbook for an iPhone, something other enterprises might consider because iPhones -- and other smartphones like the BlackBerry -- can handle both voice calls and some limited data applications. Price-wise, netbooks and smartphones are fairly on par.
"I don't think you can do nearly what you can do on a netbook on an iPhone, or even a BlackBerry or a Nokia smartphone," Abramson says. "The experience is night and day. With the smartphone, you have an even smaller screen size and lack of real keyboard."
IDC's Shim agrees. "The iPhone and other smartphones are great for a very specific usage model. But being productive from an enterprise or work perspective is not one of them," he says. "I can use my BlackBerry for e-mail, but I can't use it for Excel. Well, I could, but I'd have to be really patient."
All in all, most users say that netbooks just don't have the power to handle the types of applications necessary to make them big players in the enterprise.
"For example, netbooks aren't much good at playing video," Abramson says. While he says he often uses his netbook for Web videoconferencing, and that it works just fine, actually playing downloaded videos is tough due to netbooks' less powerful processors, most of which are from Intel's Atom series. "As a result, netbooks aren't great with high-def video at iTunes. The processor is just not built for heavy graphics, so that also means you can't do any CAD/CAM or high-level Photoshop."
Halamka agrees: "Most users need productivity or graphics software that requires more processing power than netbooks provide," he says.
Still the Only Game in Town
Once an enterprise decides to try out netbooks, it faces a critical decision beyond screen size, disk size or processor power: that of the underlying OS. While some netbooks ship with certain flavors of Linux, and upcoming devices from the likes of Dell Inc., Acer and others are expected to be based on Android -- Google's Linux-based smartphone OS -- the only wise OS choice for the enterprise is Windows, experts and users say. And that's especially true now that Windows 7 is set for a late-October release.
In April, Microsoft cited research from NPD Group that found that Windows' share of the U.S. netbook market grew from less than 10 percent in the first half of 2008 to 96 percent as of February 2009. That leaves very little space for alternative OSes, including the newly announced Chrome OS from Google Inc. (see "Google Takes Aim at Windows Netbooks").
Windows 7: Game Changer?
Until now, all those Windows netbooks were XP-flavored. But Microsoft is stepping up its netbook game with Windows 7, aiming its Windows 7 Starter Edition at the blossoming netbook market. As first planned, Starter Edition was a smaller, less-full-featured version of Windows 7. In fact, Microsoft initially announced that Starter Edition would be limited to running a maximum of three applications, a constraint that didn't sit too well with many users. But in a rare about-face, Microsoft rescinded the three-application limit.
"When Microsoft removed the three-app limit, it pretty much locked up the netbook market for Starter Edition," IDC's Shim says. "Microsoft owns it with XP now, but they'll continue to dominate the market with Windows 7."
This is because Windows 7 is particularly appropriate for the enterprise market, he says. "The challenge with Linux and Android is compatibility. In the business world, it's all Windows. If you try and run your apps on a Linux-based product, it's going to be tough," Shim explains. "Enterprises want to know that whatever applications they have, 100 percent will run on the platform they choose. And if you don't have 100 percent compatibility, you're off the list. That's the challenge for Android and Linux."
Shim says he's been using Windows 7 Starter Edition on his own netbook for a couple of months already and has noticed immediate improvements over XP. "Windows 7 is a more stable platform, and from a performance perspective, you'll get a little bit more from Starter Edition than you would from XP," he says. Plus, Starter Edition is extremely fast and efficient, Shim adds.
"What's impressive is it takes two seconds to turn on, but then it takes only two more seconds to find a wireless network," Shim says, noting that it's far faster to boot up his Windows 7 netbook than his Vista notebook, which takes nearly 15 seconds to boot and then another 15 seconds to find a wireless network.
"With Starter Edition on the netbook, I just turn it on and -- boom -- it's ready," he explains. "That's impressive because these netbooks only have 1GB of system memory. That it's able to do that is a sign that the operating system is really efficient."
Users agree. Abramson says he sees the combination of Microsoft's hosted Exchange and Live Office, together with Windows 7 Starter Edition on netbooks, as an unbeatable combination for the enterprise.
"Office Live 3.0 will make people realize that you don't need a lot of on-device storage to do everything," he says. "Add Windows 7, and you have a dynamite combination. The success of XP-based netbooks has shown there's a big market for people who don't need all that was crammed into Vista. Now we have Windows 7 with netbooks, and it's going to be a dream for people to use as a portable OS." Abramson concludes: "I think it's really going to help netbooks take off."