10 Questions To Ask About Netbooks

We've seen laptop alternatives before. So what's different about netbooks? Simple: They're really inexpensive and provide better functionality than any smartphone.

Market numbers tell the tale: Netbook shipments surged to $3 billion in the second quarter from $845 million in the same quarter a year ago--264% year-over-year growth, according to market research firm DisplaySearch. At the same time, the average price of a netbook was $378, versus $787 for a laptop. The devices will account for 22% of all laptop, notebook, and netbook shipments this year, compared with 5.6% last year. Research firm VDC predicts total netbook sales surpassing $33 billion next year.

All the major vendors are active in the market: Asus and Acer were early netbook hardware leaders, but their advantage has disappeared as Dell, Hewlett-Packard, and Lenovo have responded aggressively. Intel dominates netbook CPUs. Operating system-wise, Microsoft leads with low-cost XP licensing. There are a slew of netbook-ready Linux builds and an up-and-coming challenge from mobile phone CPU giant ARM Holdings. Google says Web-focused netbooks running its Chrome OS will arrive late next year.

Netbooks aren't just a consumer play. In our recent InformationWeek Analytics Windows 7 survey of 1,414 business technology pros, 36% say they already have some netbook use in their companies and 72% expect some use within the next two years--with 19% planning extensive deployments .

It's clear, CIOs need to know what netbooks are capable of and how the competitive landscape as well as hardware and OS choices will change in the next two years. Here are 10 questions to ask to help determine where netbooks fit at your company.

1. Just what is a netbook?

Netbooks have the size and form factors of ultra-portable machines, which have been around for years. But those machines usually come with CD/DVD players, and netbooks don't. Also unlike ultra-portables, netbooks run on processors specifically designed for them, like the Intel Atom, and you can get one for less than $400, whereas ultra-portables are priced comparable to standard laptops. Nevertheless, netbooks' smaller screens and keyboards will definitely alter the end-user experience.

These limitations need to be weighed against the actual functionality required, the enhanced flexibility of the smaller size, and benefits such as longer battery life. .

There are significant functionality differences between netbooks and notebooks. Bottom line: If you try to make a netbook do everything a laptop can do, you'll end up with users who are 10% to 15% more annoyed.

2. Do you know your employees' computing habits?

A clear understanding of exactly what users do with their laptops and smartphones is critical if you're looking to replace these systems with netbooks. Quite simply, laptops often have too much functionality for most end users, especially with Vista or Windows 7 multimedia options enabled.

Netbooks' complete dearth of multimedia processing power may actually endear them to IT managers sick of end users running iTunes and other recreational apps on their work PCs. Call us heartless, but if a netbook can let users stream video, work on Office documents, and get on the Web, who cares if it can't serve as a backup for their Nirvana bootlegs?

IT must figure out whether netbooks are best suited to replace certain systems or are better off as flexible complementary devices or tools for a new breed of computing in the cloud or for accessing virtual desktops.

3. Do netbooks fit in your cloud and virtualization strategy?

Netbooks' biggest benefit may be their ability to bolster cloud and application virtualization initiatives. They may help fill the next wave of connectivity requests at a price point lower than thin-client terminals, which at $800 can cost as much as low-end PCs. Netbooks can provide remote and Web access to workers who usually are tethered to desktops. They offer dramatic functionality improvements over smartphone access to Web sites and e-mail and can be loaded with the familiar Windows interface.

4. Can netbooks replace mobile phones?

Even though netbooks have Bluetooth support, offer low-cost connectivity, and can support most mobile softphone options, the answer in most cases is still no. Because of limitations of the Windows OS and Intel processor design, a softphone application running on Windows has the inherent challenge of maintaining sound quality regardless of bandwidth connectivity. Bog down your Windows apps, voice quality suffers.

And netbooks don't have wake-on-call functionality, so most users will still need a phone and computing device. However, some companies can save money by moving e-mail and data access to netbooks and removing those from mobile phone plans and even using lower-cost phones.

5. How will you manage them?

Netbooks running Windows can be managed with standard tools from Altiris, Microsoft, and others. They support most encryption software and can be joined to Active Directory. Security tool compatibility, such as antivirus and NAC support, typically follows the OS.

What's unclear is netbooks' failure and service rates--they're simply too new. So far, they seem to have service rates comparable to laptops. Longer term, they should fare better than laptops since they don't have DVD players, and many netbooks are shipping with solid state drives, further reducing risks related to moving parts. In addition, most major manufacturers are offering the same types of service options for netbooks as for laptops, ensuring you can have a consistent service plan for all devices.

6. Are netbooks green enough for you?

If your green policy is just about lowering energy consumption, netbooks' sleeker CPU design and smaller footprint mean you'll use 10% to 15% less power compared with laptops. Next-generation systems from AMD, Intel, and their ARM-based rivals look like they'll cut that further.

But if your green policy is aimed at selecting products that support low-impact or sustainable manufacturing, you'll struggle to get timely information. Very few netbooks have been certified by EPEAT, which looks at the product materials and manufacturing process and rates them based on conformance with IEEE 1680 environmental impact standards.

7. How open are you to Microsoft alternatives?

Novell and other members of the Linux community have worked very hard with Intel to ensure compatible Linux drivers were available before netbooks went into production. The result: Solid Linux options for every manufacturer, with some offering pre-loads of Novell SUSE or Ubuntu Remix for netbooks. In addition, Intel has released its own Moblin (Mobile Linux) for the netbook. And the ever-hyped Google Chrome OS, for which open source code is now available, is aimed at netbooks. Google envisions it as a Web-centric complement to another PC.

These Windows alternatives will make sure Redmond keeps a low price point in the netbook market. Windows XP is filling that role now, but Windows 7 is the heir apparent.

Microsoft is positioning Windows 7 Starter as the netbook edition of choice. But it has the same limitations as XP Home--no network connectivity and no group policy enforcement. You need a customized Windows 7 image for the netbook, trimming down the applications and overhead.

8. Are you open to Intel alternatives?

AMD was caught off guard by the rise of the netbook. Now the company is positioning its Sempron chip for netbooks, but that may be too little too late, as ARM has expanded into the netbook space.

ARM is the processor technology behind the iPhone, Kindle, HP iPAQ, and the vast majority of cell phones shipping today. The company is licensing its architecture to any interested manufacturer, potentially becoming the technology with the fastest adoption rate and biggest ecosystem of support, software, interoperability, and ultimate flexibility for business use. It's too soon to consider ARM-based netbooks for business, but the company's providing a competitive threat, keeping the pressure on Intel and AMD to offer alternatives at the right price.

9. How will your company account for these devices?

Netbook's magic price point--under $500--means that almost any group can slip a few in under the radar. One enterprise software vendor's marketing department needed additional gear for an event. IT couldn't make the deadline, so the marketing folks simply bought netbooks themselves and charged them to the project. "It worked great. We just expensed the purchase, and we were able to use it for the show," says a exec at the company, who asked to remain anonymous.

Even if netbooks aren't officially adopted at your company, CIOs need to establish an official position on them. Like early smartphones, they're simply too easy to smuggle in, and left unchecked, they'll become a de facto part of what IT must support. Call them high-tech squatters.

10. Are netbooks just a fluke?

Don't bet on it. Netbooks have a great price point, sales growth, and viable alternatives for the CPU and core OS. All of that ensures there will be continued development and price pressure around them. For the enterprise, it's not an either/or decision, but rather part of a computing continuum. Current laptop users who are barely mobile may be better served with a simple netbook and low-cost desktop. Organizations may opt to remove mobile phone data plans for users who mostly work at home and give them netbooks instead.

We see no signs that netbooks' popularity will wane. So it's time to incorporate them into your overall computing strategy, before they sneak in the back door--and onto expense reports and the help desk's radar.

Write to Michael Healey at [email protected]