The Chrome Subscription Model

With the announcement of the new Chrome laptops, and Google’s announcement of a subscription model for enterprise and educational users, some are claiming that this is going to change the way companies provision computing to their employees. The potential exists for this to be somewhat different for enterprises, but it may not be quite as big a deal as it would appear, at least not for a while.

On the one hand, you do have companies like use technologies like Citrix to centralize their desktop-type computing and allow them to better manage capacity like CPU and storage, as well as software licensing. The Chromebook, in effect, allows this to be more easily distributed, since it would allow corporations to utilize cloud-based services like Google Docs, and be able to manage (and possibly) their bandwidth requirements for remote users to access corporate data.

However, I see some potential issues. First is the overall dependability of cloud services. As we witnessed with the failure of Amazon’s EC2 service, putting business-critical functions on servers you don’t own and control comes with some risk. Granted, there’s nothing to say your own servers won’t go away, but the difference is that you can provision them based on your availability requirements, and you can also mitigate the risks by spreading out critical functions across different servers. If you put all your eggs in one basket, such as using Google Docs for everything, if that service is down, you are down.

Something that hasn’t happened yet is a breach of security at a cloud-based service. Again, by putting your critical business data in the hands of an external provider, you risk losing some or all of that data to other people if their security is ever breached. This hasn’t happened yet, but as we witnessed with the Sony PlayStation Network breach, determined individuals will try and occasionally succeed. Now, imagine that this was your confidential financial and sales data, not just your credit card and password.

Another element here is the shift to tablets in the enterprise, but this is a mixed bag. So far, the most talked about tablet is the iPad, but it is geared primarily to run apps installed on the machine, and not run browser-based services. Cost works to the Chromebook’s advantage. The cheapest iPad is US$499, and the cheapest 3G iPad is US$629, but you are have to pay monthly for data. A Wifi-only Chromebook will cost US$336/year. The 3G version is US$372 and includes 100MB of data per month. Cost-wise, the Chromebook is definitely more attractive. But, again, it depends entirely on web-based and cloud-based services, and if you don’t have a network connection, it’s value is reduced. An iPad or other tablet, running locally-installed apps, will generally work, although if the apps depend on some back-end web service, then a lack of network connection hampers its usefulness. If an enterprise is determined to use iPads, then they have one vendor to turn to: Apple. Those that choose Android-based tablets have more vendor choice, but costs aren’t all that different from the iPad (so far). Chromebooks, like Android tablets, also have multiple vendors, and their advantage is that the specs required by Google mean that the machines will be comparable in terms of features and performance, something that isn’t present in the Android tablet space (which is both good and bad).

The last issue for enterprise adoption is the predilection of that part of the technology industry to standardize on something. While there are always exceptions, businesses have a habit of choosing the same technologies as everyone else. Mainframes were the computing platform of choice until it was replaced by the PC and eventually Windows. Blackberries became the dominant platform for smartphones. Microsoft Office is the suite of choice for productivity, and Outlook, Word and Excel almost completely dominate their respective spaces. Oracle pretty much owns the corporate database world. Enterprises seem determined to adopt iPads. Yes, in some cases businesses will choose various vendors when they can (like the 3-way war for server platforms between HP, IBM and Dell), but they have no problem in single-sourcing some technology, and then that vendor comes to dominate the space in a way rarely seen in the consumer world. If some highly visible and influential companies become early adopters, then the Chromebook has the potential to eventually dominate the space. For enterprises, though, it generally seems to be all-or-nothing, so either nearly everyone will take it up, or almost no one will.

And don’t expect this direction to be influenced by either retail sales or the educational market. The iPad is one of the first platforms that businesses are interested in to come from the consumer products size. So far, when crossovers happen (like PC’s and smartphones), it starts on the enterprise side first. The educational market seems to have virtually no influence on enterprise or consumer technology, and at the college/university level, seems to do more to follow corporate trends than try to set them.

The Chromebook and its subscription-based model are intriguing, but I’m not convinced we can declare it a game changer or a dud just yet. Cost isn’t the only variable in play here, and while it important, there are other factors at work that may work against the concept.