Netbook computers spark corporate interest

Typically wireless, lightweight and lightly powered netbooks are all the rage

To critics, netbooks are crippled notebooks. To fans, they're a new way of computing. You can expect big advances by year-end.

One possible future of mobile computing is on display in classrooms in Fresno, Calif., where the public school district has deployed 10,000 HP "netbooks" with an upgraded Cisco wireless LAN.

Slideshow: The rise of the netbook

While the term "netbook" has no formal definition it typically applies to a class of mobile computers, from vendors such as Asus, HP, Acer and Dell, that are smaller than conventional laptops, with lower resolution displays of 7 to 11 inches, sometimes much lighter overall, no or fairly small hard drives, and that rely on less powerful CPUs. To some critics, that adds up to a crippled notebook PC.

But the best ones are extremely portable, able to be slipped into a large coat pocket, have an almost full QWERTY keyboard, offer a screen that is vastly bigger than your smartphone, and they are inexpensive: less than $500 and sometimes well under. Sales exploded last December and are expected to continue strong.

A few days ago, Kurt Madden, CTO for Fresno Unified School District, watched a classroom of fifth graders working with HP Mini-Note 2133, netbook-class machines with 8.9-inch screens, a nearly full-sized QWERTY keyboard, several of the Microsoft Office applications, Internet Explorer and precious little else. 

Each student was creating a report on one of the U.S. states. Via the netbooks' integrated 802.11g Wi-Fi radio, they linked to the WLAN to access the Internet, surfing for statistics and other data, photographs, and even audio files of the state bird chirping. They pulled all this into Microsoft Publish, creating their multimedia reports, which were then posted to their personal sites on the school's SharePoint server, where each report could be viewed by teachers.

"I would guess that 50% or more of the time they're on the netbook, they're accessing the Internet," Madden says.

Although the Fresno students aren't yet carrying the netbooks around (generally, the devices are assigned to classrooms, where they're shared by students), they work in and through a pervasive wireless network: they're always connected. And Madden notes that the school's PCs now have fewer native applications than ever before, because so much of the processing, data, storage and applications are online. And that means that users need something much less than a full-blown notebook PC to work, study, collaborate and entertain.

The online enterprise

That's a model that fits with corporate computing trends, according to analysts. Mobile users typically need access to resources on the corporate network, and increasingly to resources on the Web. Desktop virtualization, which centralizes desktop applications for more cost-effective management and improved security is a related trend that is, in effect, offloading tasks and applications that previously ran on the notebook.

"These netbooks are comparable to a 2003 notebook" in performance, says Rob Enderle, principal analyst for Enderle Group, which focuses on personal technology products. "People woke up and said, 'well, that's good enough.'" 

For some number of enterprise users and their application requirements, netbooks' portability and price will be compelling. But potential customers may want to wait for a few months to buy one.

The most recent netbook introductions make some of the products seem almost indistinguishable from the very low-end traditional notebook PCs. Bigger screens, but none yet reaching 12 inches, bigger hard drives, more weight for longer-running high-capacity batteries and so on, and price tags routinely well over $500. But even so, if you need a notebook's raw power or screen size or keyboard, you won't get it on a netbook.

"Netbooks as currently specified are not capable of full, rich multimedia performance," says Andrew Borg, senior research analyst for wireless and mobility, with Aberdeen Group. "The CPUs are not multi-cored or multi-threading. They're underpowered. Any kind of video processing is beyond them. Unfortunately, these are often requirements in the enterprise."

But 12 months from now, the landscape will be dramatically different, he says, starting late in 2009. "We look forward to another round of netbooks coming that will be much less likely to disappoint enterprise users," Borg says. 

New CPUs, including new version of Intel's Atom CPU but also upcoming ARM-based rivals such as Qualcomm's SnapDragon processor, with much higher clock speeds and multi-threading will boost performance and cut power demands. Solid state drives will keep dropping in price. And Windows 7, specifically tuned for netbooks, will be available. "A device with this profile, for under $400, could take off like wildfire," Borg says.

"Wildfire" also describes the intense speculation that Apple will introduce a Mac netbook. 

The next generation of netbooks will create a more truly mobile user experience, says Jeff Chu, mobile computing product manager for ARM Holdings, of Cambridge, U.K., which provides the intellectual property that is realized in silicon products from more than 200 chip companies. The new ARM-based chips will be highly integrated, minimizing or eliminating boot-up waits, and extending battery lifetimes to all-day or even several days, according to Chu.

Netbook challenges, tradeoffs

"There is an enterprise play for netbooks," says Mort Rosenthal, CEO of Enterprise Mobile, Watertown, Mass., a Microsoft-backed company that specializes in large-scale mobile deployments based on Windows and Windows Mobile clients. "But it does have some interesting problems."

While the current crop of netbooks overwhelmingly run Windows XP, (see related story) which Microsoft has reprieved for this segment because Vista performed dismally on them, many of the netbooks run XP Home, "which is sub-optimal for the enterprise," Rosenthal says.

Enterprises should look for XP Professional until Windows 7 is released. Microsoft made unplanned "engineering investments" in Windows 7 specifically for netbooks: reducing the OS footprint, speeding boot-up and shut-down times, enhancing batter life and multimedia capabilities.

For now, corporate customers can expect less configuration flexibility with netbooks than with notebooks, until vendors are willing and able to deliver hardware and software builds targeted at the enterprise market.

A number of the first netbooks were Linux-based and they still hold a fair share of the market, but experts say that number could shrink. More recently, there has been speculation that the Android operating system, pushed by Google and the Open Handset Alliance would be offered on future netbooks.

In response to a query, a Google PR spokesman would only say that Android "was designed from the beginning to scale downward to feature phones and upward to MID and netbook-style devices." HP is reportedly testing it. But Acer executives recently said that Android isn't ready yet for this market.

Netbooks aimed at the enterprise need to do more about device security, according to Enderle. They should include a cryptoprocessor based on the Trusted Platform Module specification for securely creating, storing and managing encryption keys on a device, and some kind of biometric reader or similar access security, he says.

Windows XP and future Windows 7 devices should, by definition, be able to participate in Windows management and security infrastructures.

Enderle argues that Intel and Microsoft artificially are constraining netbook screen sizes. But an HP executive says it's really all about a complex set of trade-offs. "When you go to a bigger screen, you add more weight, and often more cost," says Carol Hess-Nickels, director of worldwide business notebook marketing for HP. "We want to stay at a nice low-end price point."

HP's recently introduced Mini 2140 Notebook PC has 10.1-inch screen, weighs 2.6 pounds, and starts at $449. The 2230 model, the company's least expensive full notebook with a 12.1-inch screen, starts at $999.

All wireless, all the time

Though most netbooks have an Ethernet jack, they're really designed as wireless devices, sometimes with integrated 802.11 Wi-Fi (with 802.11n becoming more common), Bluetooth and a cellular radio. Some analysts expect some models will be introduced with WiMAX support.

For enterprises, the cellular option is fraught with problems, even as carriers eagerly embrace netbooks. AT&T just announced a special offer for a $49 netbook, if users sign up for a two-year data contract. But carriers are lagging in creating a smooth activation process, says Enterprise Mobile's Mort Rosenthal.

The company bought two netbooks, which he won't name, both with embedded cellular cards. In one case, the manufacturer was to start the activation process and then pass it over to the carrier. "That pass didn't work," Rosenthal says. When the user called the carrier to confirm the contract agreement, the carrier representative "didn't even know what to do with the call," he says. In the second case, the netbook was bought at Radio Shack, where a staffer worked diligently and hard. But the process still took two-and-a-half hours to complete.

Carriers will need to invest in streamlining these practices and improving support for their enterprise customers.

Copyright © 2009 IDG Communications, Inc.

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