Why you'll be evaluating Chrome OS enterprise PCs

The less-than-free price point and increasing feature set in Chrome OS and Google Docs will be difficult for PC makers to ignore

Although a niche offering today, the open source Chrome OS is likely to follow Android's success -- so IT decision makers should plan on evaluating Chrome OS-based devices for at least some portion of their user base in the next 12 to 18 months.

As PC World's Ian Paul reported earlier this week, Dell revealed it intends to use Chrome OS as the basis for future offerings. Details surrounding Dell's Chrome OS plans and, more important, Google's offer to PC makers are still murky at best. However, it's likely that Google will follow much of the same game plan as it did with the mobile Android OS.

[ Take a tour of the Chrome OS in InfoWorld's slideshow. | Keep up with the latest open source trends and news in our Technology: Open Source newsletter. ]

"Less than free" for PC makers is difficult to ignore
Most InfoWorld readers are aware that the open source Android OS is provided royalty-free to device manufacturers. However, Google goes one step further: Device manufacturers are actually paid to adopt the operating system. VC Bill Gurley explains Google's offer to mobile device manufacturers:

That's right; Google will pay you to use their mobile OS. I like to call this the "less than free" business model. This is a remarkable card to play. Because of its dominance in search, Google has ad rates that blow away the competition. To compete at an equally "less than free" price point, Symbian or Windows Mobile would need to subsidize. Double ouch!!

I would be surprised if Google doesn't provide a similar offer for PC manufacturers to encourage the delivery of Chrome OS-based devices.

But Google is unlikely to stop there.

Google's super weapon: A Chome OS/Google Apps combo
After the operating system itself, most IT buyers focus on is choosing an office productivity suite that meets their business needs and employees' skills. And that's where Google can go further.

As this chart of Microsoft's profit shows, the linkage and, thus, combined success of Windows and Microsoft Office is critical to Microsoft's business. Until recently, few could argue that Microsoft Office alternatives were truly ready for everyday use. That is slowly changing; Google's free SaaS-based Google Docs are increasingly becoming more enterprise-ready by the week. In some respects, such as joint live editing within documents, Google Docs offers capabilities that many users of older Office versions would love to have.

According to Microsoft's Office 2010 OEM pricing, Microsoft is charging PC manufacturers $2 per copy to preload Microsoft Office Starter Edition if they agree to preload other Microsoft components. The cost increases to $5 per copy if the manufacturer only wants to preload Office Starter Edition.

Google can offer Google Docs for free to PC manufacturers, thereby saving the manufacturers millions of dollars in the long term for not paying Microsoft Office licensing fees. Google could offer PC manufacturers incentives to encourage Google Apps users to upgrade to Google Docs on a Chrome OS-based device. The net result would be higher profit-margin potential for PC manufacturers with the Chrome OS/Google Docs combo. (and hurt Microsoft's and desktop Linux vendors' revenues).

You could question whether Chrome OS and Google Docs can in fact succeed against Microsoft Windows and Microsoft Office where so many other vendors have failed. I believe that the combination of Chrome OS and Google Docs/Apps provides a user experience that sets the combination apart from previous OS and office productivity alternatives.

However, the most important factor is the PC makers' profit motivation. For example, vendors offering desktop Linux or open source office productivity suites can at best provide a free offering to build from. These vendors cannot get the revenue potential linked to search revenue that Google can offer, nor the possibility of incentives from users who convert from Google Apps to Google Docs. The "less than free" price point is difficult to ignore -- and difficult for smaller open source OS vendors such as Canonical and Novell to compete against.

Choose your rollout candidates with caution
Given the PC makers' profit motives that will make Chrome OS PCs a real option, IT buyers need to plan for the inevitable future where some portion of their user base will be well served with a Chrome OS-based device.

In some respects, the growing trend toward Web-based applications makes is increasingly easier to move some users off a traditional OS and fat-client applications. For example, of the eight applications I am currently running in the background as I write this post, there are exactly zero applications that either do not, or could not, run inside of a browser alone. I am not alone in this respect.

To be fair, and sane, few IT decision makers will roll out a Chrome OS and Google Apps-based PCs across their entire enterprise in the next 12 to 18 months. The lack of enterprise manageability and control with Chrome OS is more than likely to be missing when these devices first hit the market. But that is just a "when" issue.

IT decision makers should consider initial Chrome OS rollouts to specific groups, such as external-facing customer service representatives or within branch offices. You should consider a pilot project with Chrome OS and Google Docs, or Google Apps, on existing, older PCs to evaluate whether a future Chrome OS PC will be a good fit for some of your user base.

Whatever you do, plan now: Because if Chrome OS tracks Android OS adoption at the manufacturer and user levels, if you don't get ahead of the trend, you'll be forced to into the evaluation by your vendors, and maybe even your users, anyhow -- with no time to think it through.

Follow me on Twitter at SavioRodrigues. I should state: "The postings on this site are my own and don't necessarily represent IBM's positions, strategies, or opinions."

This article, "Why you'll be evaluating Chrome OS enterprise PCs," was originally published at InfoWorld.com. Read more of Rodrigues et al.'s Open Sources blog and follow the latest developments in open source at InfoWorld.com.

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