Summary
1. Low price competition with good enough computing environment means Microsoft must get it right with System 7. 2. If a netbook costs less than a Ipod touch, will the number of netbooks increase beyond the number of Ipods?
Analysis
More and more technology is coming to the enterprize from ideas that first start on the consumer side and find a use inside a company. Let's look at a few examples. Salesforce.com was first conceived as a way of delivery software that they copied from Amazon and the early web companies. Almost everyone in corporations today has at least one or two personal email account from Google and/or Yahoo. I know of at least one CIO that has migrated from Microsoft Exchange to Google mail and calendar offering. There are many more applications that are being delivered as a service.
And then there are the applications that are just starting to enter the enterprize. Facebook now has the ability to created groups that some corporations are using as a way to keep employees connected to each other much like "water cooler conversations". Linked in has become one of the top search tools for companies looking for employees. Most companies also are using Skype for communication even if the CIO is not aware of it.
The netbook is also targeted at the consumer. I can imagine that this will be a growth category for the industry for several years. With a price point close to the price of a Ipod (I-touch), I can see that netbooks will sell to a much larger population. With simple applications to use via the web, many of these new consumers will think of computers differently that those of us in IT. They will think of them much like the 30 year old and under demographic in the US. The PC is just a commodity like a TV.
I have two daughters that are between 20 and 24 and they do not use much more on their computer than a web browser. The new netbooks are going to have enough computing power for them to be able to do most of the tasks that they need. The one killer app that they have on their computers is their Itunes music library. So far they have kept the size of their libraries to under 40 gig. I can easily see them ending up with netbooks.
What is interesting here is that Microsoft may not be the operating system of choice for the netbook. The article suggests that Google's operating system may be the operating system of choice. If this happens, then it is possible that Microsoft will face pressure from the low cost end of the computing environment. And the risk to Microsoft is that the netbook will become "good enough" of a computer for enterprize just like so much of the consumer technology.
