Summary
Viewing Netbooks standalone makes them appear as a low end, second device choice for consumers. In reality, they will have major impacts in enterprises.
It is critical to understand the impacts of three Microsoft initiatives:
1) Windows 7
2) Windows Media Player 12
3) Office 10
In addition, key shifts in how software and services integrate with devices are occurring right now. These include expansion of cloud computing (IaaS, PaaS, SaaS, AaaS), 'good enough' platforms (Oracle Fusion) & security.
Analysis
Frankly, the first time I looked at a Netbook all I could think of was my Texas Instruments Compact Computer-40 released in 1983 for $249. Sure, the Netbook has a lot more memory, storage capacity, processor power and connectivity. But, would I be able to do my job using a netbook? Or, was it just a new, more powerful product for my kids that supercedes their Nintendo or xBox?
If you just look at a Netbook today, you see a 'good enough' product that will solve some people's needs. Kind of a large SmartPhone. But, why bother?
Why did Microsoft put the brakes on installing XP on Netbooks that had a hybrid drive environment, a Solid State Drive (SSD) and a Hard Drive (HD)? It made a lot of sense to give the Netbook faster startup using the SSD and then the rest of the OS on the HD. But, Microsoft outlawed this in June. They now allow XP on Netbooks only with up to a 16GB SSD OR up to a 160GB HD. Why?
My take is that Microsoft wanted to DE-celerate the Netbook market until Windows 7 is available. Windows 7 is designed to run optimally from SSD. It is also more touch oriented, versus keyboard oriented, than XP. In short, Windows 7 is designed to maximize a Netbook environment. I am sure that Microsoft will lift the SSD/HD hybrid ban once Windows 7 is available.
Will you actually need the hard drive? Will the SSD be enough? After all, Netbooks are already lacking lots of other components like CD/DVD drives.
I can hear you saying "16GB SSD"! No way! What about all my media content? What about all my applications that I need to use for business?
Well, the answer is simply 'the cloud'. I know, I know. What cloud? Well, it is coming and it is coming at an accelerating pace. My PCs are all backed up into the cloud and have been for the last two years. Including all my media.
A lot of the 'media' we use now is already in the cloud. TV on demand. YouTube. NetFlix downloads. iTunes. And guess what Windows Media Player 12 is designed for. Yep, handling all that content in the cloud. Not to mention Windows Media Center, which is designed to extend the cloud into your home devices on command.
What about those pesky applications? Like Word? Excel? Check out Microsoft Office 10. Web based. Full featured. Very similar user interface to existing Office platforms. But, primarily based in the cloud. CRM? ERP? Check out what Oracle is trying to deliver with their Fusion products. Or, solutions from companies like Epicor. Cloud based solutions that are good enough to easily handle small to medium enterprises.
The cloud concept isn't new. So, why is it possible today? Because of virtualization, inline deduplication and other technologies that maximize the utilization of data center resources. No idle servers. No duplicated storage. And higher and higher speed communications make the transmission virtually transparent.
Netbooks are the dream of every Chief Security Officer on the planet. No data stored on the local Netbook. Add a biometric logon feature and you have a virtually impenetrable access device. Why slow down the universe with layers of anti-virus, anti-spyware and other monitoring layers?
IT departments will love Netbooks. No applications on the end device. All web based definitions. Replacing failing devices is a breeze. Retraining for hardware upgrades becomes nonexistent. Upgrade costs are drastically reduced. Pay per use applications.
Netbooks by themselves are cute. Combine them with the right OS, the right media manager, data center virtualization, high speed communications and all types of cloud computing (Infrastructure as a Service, Platform as a Service, Software as a Service, Application as a Service) and Netbooks then become the portable workhorse of the future.
David Croslin consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
