Google officials claim that hardware + software leasing is a new price model for business computers that helps to reduce costs. I will argue in this post that this is not the case.

Applications for Chromebooks not only have an old-fashioned user interface; they are also significantly more expensive than Windows netbooks.

8. Costs ^

I like Google's leasing model. I really do! I generally don't like buying heavy things such as houses, cars, or furniture. So I also like the idea of not owning my computer. I find renting much more convenient and flexible. But one thing is for sure: Renting is usually more expensive than buying. If you have a closer look at Google's pricing model for Chromebooks, you will realize that this also applies to this "new kind of computer."

The cheapest Chromebook costs $28 USD per month for enterprises. As with leased PCs, you can just return the machine if the hardware causes trouble. You also don't have to worry about the software because a Chromebook is only a hardware-based web browser anyway.

Google claims that this hardware + software pricing model is new, which of course is not true. Many PC vendors offer similar services. You can buy or lease a PC that comes with pre-installed Windows plus all the software you need, including Active Directory domain integration. All you have to do is provide an OS image to your vendor and they will bring a network-ready PC to your user's desk. And if the PC causes problems, they replace it with a new one. No local admin has to be involved. You can also outsource the OS image creation if you want.

Of course, this service costs because technicians who manage computers have to pay their bills regardless of whether they work for your organization or for a service provider. The only questions are whether Google's technicians earn more or less than the ones in your company, and how much money Google needs to earn to raise their stock prices.

You have to lease a Chromebook for a minimum of three years, which means that a Chromebook costs you at least $1008 USD. That is a lot for a tiny netbook that can only run a web browser. Note that this price is just for the hardware with Linux plus a web browser. Web apps, online storage, and so on cost extra.

The interesting question is, what will happen after those three years? Of course, you can renew the contract. Or, to be more precise, most likely you will be forced to renew the contract if you don't want your users to be without a web browser. There is no way of skipping an OS version to save costs.

Google claims that many organizations don't upgrade their Windows XP machines because they fear the expenses. This might be true. However, this is an advantage of Windows, not a disadvantage. Businesses can choose to upgrade or to stick with old software because it does all they need. With Chrome OS, you are always forced to upgrade; this is one reason why Chromebooks are more expensive for many organizations.

The management costs for Chromebooks are unclear because no data exist yet. Google says there is a management console, which shows that Chromebooks also have to be managed by on-premises admins. Even if the web apps run in the cloud, your users need accounts, the web app has to be evaluated, you have to point users to the right applications, you need help desk staff, you need tech staff to contact cloud providers if problems come up, and so on.

It is possible that management costs are lower for Chromebooks than with Windows netbooks because you don't have to deploy applications. However, as noted above, for this you have to pay cloud providers who offer lease-based pricing models. These leases are usually expensive because you are forced to pay for every update year after year.

But the biggest cost-driving factor of Chromebooks is that you will still need Windows. Even Google admits that you can't do everything with a Chromebook that you can usually do with a Windows machine. This means that you have to support another machine type, which raises the complexity of your network. Higher complexity always means significantly higher costs.

I think, the best way to understand how expensive a Chromebook really is, is to compare its price with the price of a Windows netbook with the same capabilities. If you really think it is a good idea that your users should not run Windows applications on their netbooks, you can install Chrome on a Windows netbook and make sure that this is the only application they can launch, which is technically no big deal. You can configure Windows to download and install updates in the background without user or admin intervention. And if you think that backups are only torturing users and admins, then just don't do it.

If you buy a Windows netbook for $250 USD, you can probably use it longer than three years. Even if the netbook has a hardware defect after the warranty expired in a year or two (depending on the country you live in), it will be much cheaper than a Chromebook. For $1008, you can buy four Windows-based Chrome netbooks for every user. If one was infected by a virus, the user can just trash it and take the next netbook from the drawer.

Conclusion ^

While I watched the Chromebook keynote, I was instantly reminded of something I did quite a long time ago. The proprietary OPACs (Online Public Access Catalog) in the University library I was working for had to be replaced with a web-based OPAC running on Windows NT. A service provider for libraries offered us a somewhat expensive solution that would prevent library users from starting Windows applications or surfing the web on computers that were only intended for ordering books.

While I was watching their demo, I realized that they only offered a modified Internet Explorer. It didn't take me long to figure out how they did it. With the Internet Explorer Administration Kit, the NT System Policies (predecessor for Group Policy), and a little registry hack, I was able to create a Windows NT machine that started the Internet Explorer right after the computer booted up. There was no way for users to start Windows applications, close the browser, or access any web page other than the web OPAC. Internet Explorer was running in full-screen mode, so users didn't even notice that they were using a web browser.

Just like Google did in this keynote, this service provider was trying to sell, as the next big thing, this relatively simple software that did nothing other than ensure that only Internet Explorer could be started. Finally, libraries would be able to reduce costs by using cheap PCs instead of proprietary OPAC hardware, except with low management costs because users could not mess with the underlying Windows.

Well, many libraries bought their expensive solution simply because they wanted a hassle-free solution and did not want to think about managing Windows PCs. It is interesting to note that the price model of this software was subscription-based, just like the one for Chromebooks, which added up over the years. Every one of those libraries could have paid quite a few admins with this money.

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However, one admin (me) only needed an afternoon to build what you could call an IEbook. This must have been around 1998, the year when Google incorporated. Now I am asking you: Is a Chromebook a new kind of computer?

4 Comments
  1. Alex Stabler 11 years ago

    Yes it is a new kind of computer. Your blog posts include falsely interpreted information and therefore false points. Also, Office 365 (mentioned in a different post) can’t be accessed from anytime, anywhere as how am I meant to access it from Ubuntu or a Chromebook or MeeGo or from Android?

  2. Michael Pietroforte 11 years ago

    Alex, I think you misinterpreted the information in my article. I didn’t say you can access Office 365 from any device. I think if there would be a significant number of Ubuntu laptops and Chromebooks out there Microsoft would support them. Just like they offer Office for Macs even though Apple is their toughest competitor. I also think that if you claim that there is false information in an article, you should at least say what exactly is incorrect.

  3. Microsoft/Apple user/admin 10 years ago

    Michael, very well series of articles. What you are saying reflects almost exactly how I see the Chromebook. Hopefully it will be another of Googles cancelled projects.

  4. Michael Pietroforte 10 years ago

    Thanks! I wrote this article one year ago and it seems ChromeOS is indeed a big failure. However, I don’t think that Google will give up so quickly. Their founders are blinded by the success of their search engine and web technologies just like Microsoft was blinded by the success of the conventional PC. Microsoft meanwhile understood that the future belongs to locally running and touch-optimized cloud apps. ChromeOS will die when someone at Google recognizes that Android is Google’s best horse on laptabs (my name for laptops that can be used as tablets).

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