Like miniature freight trains, netbooks are making deep inroads into the PC market, in turn forcing enterprises to lend these mobile marvels serious consideration. Although netbooks have certainly found favor with consumers—even wireless providers are now selling them along with mobile phones—their viability in business settings remains questionable.
According to DisplaySearch, more than 27 million netbooks will ship in 2009, reflecting a 66% increase over the previous year. Standard-sized notebooks, on the other hand, are estimated to see only a 3% sales increase, or 133 million units shipped. However, DisplaySearch attributes this current surge partly to the lagging economy and expects that buyers will return to purchasing more full-featured and higher-priced notebooks after the economic crisis.
Just as cost-effective netbooks are enjoying greater sales due to the economy, they’re also filling needs in enterprise settings—but only for certain segments. In a recent study by Chadwick Martin Bailey, a majority of IT decision makers indicated that netbooks could find a home in their organizations with employees who travel or require mobility services. On the other hand, only a small number of respondents said they would deploy netbooks on a wide scale.
Making The Grade
While the enterprise setting appears to be a mixed bag for the netbook, the education market could be a prime fit. At the Seattle Academy of Arts and Sciences, incoming ninth-graders buy a specific notebook/netbook model from the school and carry it through the 12th grade. In the academy’s middle grades (six through eight), the school owns the laptops and keeps them in carts within specific classrooms. Each year, the academy must make purchasing decisions for both the ninth-grade and middle-grade machines.
“There are four big issues in making a decision about whether to try netbooks on a larger scale,” explains Douglas Ambach, the academy’s assistant CFO and director of operations. “First, we need to know if our students and students’ parents want netbooks or laptops. Second, we need to determine whether netbooks are too small. Third, we need to choose a producer likely to keep producing and supporting the netbooks over a four- to five-year period. Fourth, we wonder if netbooks will prove as reliable as the laptops we have been buying [for] a four- to five-year life.”
Ambach says that the success of netbooks in schools will depend on the size of the screen and keyboard, adding that his academy is more likely to purchase laptops with larger screens and keyboards if they come down in price. Students at the academy receive plenty of school content through their notebooks, but small screens can make reading that content difficult. In particular, reading spreadsheets and data can be challenging on a small screen, and Ambach says that netbooks would be a harder sell for the academy’s math and science classes.
However, Ambach points to what he considers the clearest benefit of netbooks: lower cost to purchase and replace if the devices are broken or lost. “The retail prices for netbooks are so much lower than laptops that we could even forgo purchasing the additional repair warranties we regularly purchase with laptops. Also, the size and weight make them better for students to carry around in backpacks,” he says.
On the enterprise side as a whole, Paul Moore, senior director of mobile product management for Fujitsu America (www.fujitsu.com/us), says he feels the netbook’s prospects for adoption aren’t particularly good. The devices are designed to perform relatively simple tasks, run Windows XP Home, have limited to no expansion, and have small screens and keyboards, he says. But not everyone agrees that the outlook is dim.
“It is still early in the market development of netbooks, but we believe that the prospects in the enterprise environment are strong,” says Rob Cheng, CEO and co-founder, PC Pitstop (www.pcpitstop.com). “Our research shows that netbook adoption in business [settings] is significantly behind that of the consumer market. However, the factors driving netbook adoption [in the consumer space] will be the same ones that drive the corporate acceptance. Netbooks are the perfect combination of great price and portability. It is not the solution for all corporate needs, but ultimately, netbooks will establish a strong position in companies that use laptops for travel and communication purposes.”
One of the roadblocks currently preventing netbooks from obtaining a greater enterprise presence is their lack of performance, says Don Ryan, vice president of technology and media for TNS North America. He notes that for the next two years, the enterprise opportunity may be limited because of the netbook’s lower processing capabilities and also because some of them run Linux instead of the enterprise-standard Windows operating system.
“A more important reason is supply-side considerations,” Ryan says. “The major vendors such as HP are positioning these solutions as consumer devices and at this point do not want to confuse the market by positioning them as business and consumer systems. APAC [Asia Pacific] companies that will produce these systems, such as Acer, do not have a strong presence in the enterprise. Until HP and Dell decide that a netbook fits into an enterprise environment, the market will be slow to take off in this segment.”
Finding A Niche
Research indicates that business adoption of netbooks will center primarily on mobile workers, but experts envision specific industries that could take unique advantage of the devices. For example, Cheng says that military units could find value in the smaller form factor, as could police forces, whose squad cars are usually equipped with laptops. But, as Cheng points out, laptops “seem overly heavy for the task at hand, which is often checking driver information from a central computer.”
Fujitsu’s Moore adds that field force automation settings, where tasks are repetitive and planned, could utilize netbooks. “Planograming, inventory, and small businesses like insurance, remodeling, and landscaping are some examples,” Moore says.