Netbooks: Do They Make Sense for Business?

Given the current economic climate, it should come as no surprise that the only segment of the PC industry that is growing right now is that for netbooks, small and lightweight machines that typically sell to consumers for under $400. In these lean times, it's natural to wonder if low-cost netbooks would provide a viable alternative to mainstream notebook computers in small and medium businesses or perhaps even in the enterprise.

To decide whether netbooks make sense in your environment, it's important to first understand what a netbook is exactly, how it fits into the overall PC market, and whether the upfront costs of such machines are matched by the long-term durability and manageability features that one should expect from a business-class machine. And since netbooks tend to ship with very low-end microprocessors and other low-end parts, you may have concerns about performance.

History of the netbook

The first netbook, an ASUS Eee PC-branded portable computer, arrived in the market in late 2007. At the time, ASUS didn't have much of a retail presence in the United States, and the company hoped that it could expand beyond its traditional role as a supplier of motherboards and other PC components for first-tier PC makers like Sony and Apple.

The original Eee PC was the most popular electronics product of the holiday 2007 selling season, thanks to its low, low price--common today, but unheard of today--and cutesy design. It packed an ultra-low-voltage Intel processor, 512 MB or 1 GB of RAM, 2 to 8 GB of solid-state disk (SSD) storage (in lieu of a hard drive), and a 7-inch widescreen display running at 800 x 400 into its diminutive body. It also featured other notebook PC-type features like Wi-Fi networking, a full (if tiny) keyboard, and a traditional clamshell form factor.

While it was originally designed for the emerging computing market, the Eee PC rose to fame and fortune when ASUS began offering it in the US, following in the footsteps of OLPC, which also had been offering its own weird little low-cost, emerging market notebook, the XO, to consumers in the US as well. Interestingly, ASUS didn't market the original Eee PC as a "netbook," but the term caught on as other companies entered the market and industry onlookers and PC makers tried to figure out a way to differentiate the devices from other notebook computers.

In fact, the Eee PC was so popular that other manufacturers jumped on board and produced their own low-end portable machines almost immediately. The first few companies to do so--Everex and MSI--were hardly household names, especially in the US. But sensing a market opportunity, virtually all major PC makers--with the obvious exception of Apple--jumped into the fray and they now all offer at least one brand of netbook.

The netbook's success was one of many affronts to Windows Vista, Microsoft's flailing desktop OS of the day. The Eee PC and other netbooks are not capable of running Vista and instead came initially with a low-end Linux distribution (which was also a cost issue; Linux is essentially free). But the popularity of Linux-based netbooks forced Microsoft to retrench and begin offering a low-cost version of Windows XP--which could run on the tiny Eee PC--to PC makers instead. This further extended XP's lifetime and, perhaps more perversely, made it more popular than ever as the fledgling netbook market took off.

On the other hand, Microsoft was able to stave off an expected Linux threat in a key market. While virtually all netbooks sold through mid-2008 included some form of Linux, today's netbooks ship almost universally with Windows XP.

Sales of netbooks rose almost exponentially the first few years they were on the market and analysts expect over 35 million of the tiny devices to be sold in calendar year 2009, or about 20 percent of all portable PCs sold. Almost all of these sales are to consumers, and not businesses.

What is a netbook?

In order to secure first Windows XP and now Windows 7 at bargain pricing, PC makers have had to conform to a set of specifications when making netbook computers. (They're free to use higher-end Windows versions, of course, but they'll pay a lot more and have to pass that cost along to the buyer.) The result is that today's netbooks share numerous common features that truly do differentiate them from other low-cost portable computers.

[ Learn more about Windows 7 Starter, which is designed for netbook computers. ]

More specifically, almost all netbooks sold in late 2009 include a 1.3, 1.6, or 1.66 GHz Intel Atom processor, 1 GB of RAM, a 160 GB (or smaller hard drive), and a 10.1-inch (or smaller) screen. Like notebook computers, netbooks come in a traditional clamshell form factor, and typically feature wired and wireless networking functionality, 2 or more USB ports, VGA out, a full keyboard, and other standard features. Some include 3G wireless connectivity and, indeed, some netbooks are now subsidized through wireless carriers with data plans like smart phones. Netbooks do not ship with optical drives, which can make software installation more difficult in some cases.

Intel's Atom processor is limited to 32-bit operation, and can address only 2 GB of RAM. As such, most netbooks can indeed be upgraded to 2 GB of RAM, providing excellent performance in Windows 7. But PC makers do not ship 2 GB of RAM in their netbooks in order to accommodate Microsoft's licensing requirements.

Most netbook differentiation today is around style and battery life. While the typical netbook from mid-2009 could achieve roughly four hours of battery life, Toshiba, MSI, and others are now shipping netbooks that can achieve 8, 9, or more hours of real world battery life, good for all day usage.

While a netbook is easily defined, its position in the market is somewhat vaguer. Today's PC makers ship a variety of portable computers, including traditional notebook computers of various shapes and sizes, Tablet PCs (slate and convertible), touch-compatible Tablet PCs, touch-compatible notebook computers, and even so-called smartbooks, which are even smaller than netbooks and fit somewhere between smart phones and netbooks from a size and usage perspective. (A previous generation of smartbook computers was often referred to as the Ultra-Mobile PC, or UMPC.)

[ Check out the Toshiba NB205, which is capable of 8-10 hours of battery life. ]

But the netbook's biggest looming competition is likely an emerging generation of slightly bigger netbook computers with faster processors, more RAM capacity, and larger 11-to-12-inch screens. These machines are simply notebook computers, of course, and will likely be marketed as such. But with better capabilities and only slightly higher price tags, traditional notebooks may eventually overcome the recent boom in netbook sales.

Do netbooks make sense in business?

Saving money is Job One in most businesses large and small, and that's truer than ever these days. Looking at the current crop of netbook computers, it's possible to imagine them performing well in business scenarios, especially those machines from top-tier PC makers that feature longer-than-average battery life. There are some pros and cons, of course.

One of the most obvious revelations of the netbook era is that most users simply do not need high-end computers to get work done. Assuming the device is large enough to use comfortably, a standard netbook computer works reasonably well for virtually any office productivity software, including Microsoft Office, web browsers, and email clients. From a performance standpoint, netbooks are less compelling for those with high-end needs, such as video editors or game players. But neither of these concerns is particularly problematic for the typical knowledge worker. (Too, it's important to remember that most netbooks can be upgraded to 2 GB of RAM, which is more than enough for Windows 7.)

So performance won't typically be an issue. But some other aspects of the netbook market make these devices less compelling for businesses. The small screens (and onscreen resolutions) used in netbooks make them less than ideal for typical office productivity software like Excel and PowerPoint. The lack of an optical drive can make installing software difficult in smaller, less managed environments. And because most netbooks sell with a very low-end version of Windows 7, you will need to upgrade the systems to more business-appropriate versions, like Windows 7 Professional or Enterprise.

Durability is also a concern, and this is true regardless of which make or model you're examining. PC makers large and small skimp on the componentry used in netbooks because these devices sell for next to nothing and come with razor-thin margins. So while it's possible to acquire, say, mainstream business notebooks with important reliability technology like chassis roll cages, hard drive suspension systems, fingerprint logons, and the like, netbooks from the same manufacturers will feature none of these things. And they will ship in cheap plastic bodies that would degrade during the course of normal business travel. (According to market researchers, almost all netbooks are used almost exclusively at home.)

Most important, perhaps, you won't be able to find a netbook from any mainstream PC maker that is available via volume purchase to business customers and with any kind of acceptable support. This leaves out enterprises, but it should give pause to smaller businesses as well. Lenovo, for example, markets a diverse line of ThinkPad notebooks, Tablet PCs, and portable workstations to businesses. But if you are interested in the company's netbook products, your only option is the consumer-oriented IdeaPad line.

Those companies that do opt for netbooks will likely discover that the long-term costs of such machines will wipe out any up-front savings. These costs will include downtime for repairs, maintenance issues, and the cost of upgrading the hardware and software to meet the needs of users.

So are netbooks a total wash in business? Not quite. Netbooks do work well within one scenario, and not surprisingly that scenario matches how these devices are already being used by consumers. For those businesses with workers who frequently work at home--including nights and weekends--netbooks may indeed make more sense than traditional notebooks or desktop PCs. The reason is that netbooks won't sustain the same level of abuse at home as they would on the road. And since netbooks are typically so cheap to acquire--and yet so popular with individuals--they'll generally be accepted by users quite readily.

Recommendations

Put simply, netbooks do not make sense in most business environments, where their low durability and general unsuitability to the rigors of travel will prove problematic and overcome any upfront cost advantages. That said, netbooks do have their place in the broader PC market and if you run a smaller environment and need to accommodate users who work from home, netbooks may be an interesting choice.

If you are choosing a netbook, be sure to choose a device from a major PC maker. Battery life will be less of an issue for home users, but should still be a concern as many users will prefer to be untethered for the day. Interestingly, the latest versions of the ASUS Eee PC line are still quite popular and meet these needs. But netbooks from Dell, HP, Lenovo, Samsung, Toshiba, are all highly rated as well.

An edited version of this article appeared in the December 2009 issue of Windows IT Pro Magazine. --Paul

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