The Lenovo Chromebook: Another Nail in Microsoft’s Coffin

Many of us have had one. In fact, for those working for corporate America, we have been issued one every three or so years for the better part of the last 20 years.

I’m talking about a ThinkPad laptop, of course. It was first made by IBM and in the last decade Lenovo. It was black, had a great keyboard, a matte screen, and it remains the most reliable Windows laptop around.

Each of those millions of Lenovo ThinkPads ran the latest version of Microsoft’s Windows. One could argue that the Lenovo ThinkPad was Microsoft’s face of corporate America on the road.

In other words, Microsoft and the ThinkPad laptop were locked in arms against all PC challengers of the past, from Sun to Linux to Apple’s Mac. Brothers in arms, locked together in that sturdy black box residing on traveling corporate America’s lap, it was Microsoft’s Chinese defense wall.

This is about to change.

In 2013, Lenovo will break with its Microsoft Windows exclusivity and start offering PCs — laptops and desktops alike — based on Google’s PC operating system, Chrome OS. Such laptops and desktops are commonly called “Chromebooks” and “Chromeboxes,” respectively.

Why is Lenovo doing this?

Corporate America, as well as some branches of government, are trying to reduce their costs. IT is a growing part of their budgets, with pressures from the front office to deploy and pay for smartphones and tablets, in addition to PCs.

At the same time, the complexity of a Windows PC has grown beyond most users’ capabilities to handle it. I’m told that as early as a dozen years ago, Microsoft asked Excel users for feedback on what features to add. Supposedly 95% of the suggested new features for Excel were…already in Excel. A Windows PC is simply too complex for most regular users.

Once you have used your Windows PC for the first few days, weeks and months, it no longer takes 30 seconds to boot it up, but perhaps one minute, then two minutes, then… My old Windows PC now takes at least five minutes to boot before it approaches usability.

Then you have the longest list of viruses and spyware. Many users have no idea whether they have them, or how they may get them. It’s an eternal — futile? — cat and mouse game to fight these scourges.

A Windows PC may be only $500 or so to buy, even though software and warranties can often almost double that price. But that does not tell the whole story. Over a Windows laptop’s three-year life cycle, it may cost thousands of dollars for a large enterprise to support this PC: $500 or $1,000 on Day 1 looks more like $3,000 or $4,000 cumulative spending over three to four years.

For this reason, CFOs, more than anyone, are looking primarily at cutting the cost that happens after the initial $500 or $1,000 purchase. It’s okay if a laptop costs $500 or more if it doesn’t require any maintenance, so the IT department can be fired or at least extremely significantly reduced.

Solution: The Chromebook.

A Chromebook doesn’t require any money spending after the initial purchase. It doesn’t get viruses, it doesn’t need software installations. Upgrades are automatic. Everything is backed up automatically. Different users can work it, and nobody messes up another person’s settings or work.

Chromebooks have become popular in schools over the last year. Give a kid a Windows or Apple laptop, and chances are that within a couple of minutes all settings will have changed, applications have been installed, and viruses have attacked and metastasized. By the end of the day — or sooner — the school’s IT department may just as well re-image the whole PC.

Which is what they often do every night.

With Chromebooks, all of these problems — i.e., cost — went away in these schools.

Now, CFOs in non-education markets are taking note of how these schools have so dramatically reduced their cost of supporting PCs. Why should a regular traveling white-collar worker who is using his laptop for email, surfing the Web and basic word processing have a Windows PC requiring an IT back office for device support?

With a Chromebook, he doesn’t.

With a Chromebook, the IT cost is $500 or less on Day 1, and not a penny more for the rest of the three years. You may have saved up to 80% of the three-year cost.

So far, Samsung and Acer have been the companies offering Chromebooks, ranging in price from $199 to $449. From an enterprise’s perspective, these companies are not their traditional PC suppliers. They are more consumer-focused, which was okay in the education market.

Why do I believe that Lenovo will now generate this crack in Microsoft’s enterprise Hoover Dam? Because I hear enterprises asking for this product, that’s why.

What I hear from enterprises sounds something like this: “We are ready to try Chromebooks on 10% or 20% of our employees, in lieu of Windows laptops. However, we are used to Lenovo’s reputation and quality as a laptop brand, and we wish Lenovo would offer us Chromebooks.”

I’ve been hearing this sentiment increasingly since at least August 2012. Surely these demands have been pinging Lenovo with increasing frequency.

In a few short years, Lenovo has grown from $10 billion in annual revenue to $33 billion in 2012. This doesn’t happen to a company that ignores requests from its customers.

Translation: The enterprise customers started demanding Lenovo make Chromebooks in 2012, so Lenovo will provide them in 2013 and beyond.

The Lenovo Chromebooks and Chromeboxes can be powered by x86 CPUs, presumably from Intel, or by ARM processors from companies such as Nvidia and Qualcomm.

On the laptop side, they will have 16 gigabytes of solid state storage, and be equipped with screens ranging in size from 11.6- to 12.5- to 13- and 14-inch models. All equipped with the legendary ThinkPad keyboard, of course.

Prices may start as low as $299, but for more premium and larger models — also with bigger batteries — they could reach $399 and $499. That may not sound like such a bargain, but with the zero-maintenance model of the Chromebooks it’s the multi-thousand-dollar cost reduction over the next three years that counts.

When will Lenovo drop this stink bomb into Microsoft’s living room? I don’t know precisely, but I’m guessing May 16.

Yes, this is likely bad news for Microsoft, and perhaps the HDD and SSD vendors given the modest requirements of a Chromebook. Intel may keep a SKU, in principle, but it would be a far cheaper CPU so it is a loser, too. Companies such as Nvidia and Qualcomm may gain some share.

The obvious winner here, though, is Google.

Apple? This can’t be incrementally good news for Apple, but Apple fanatics would never admit this, of course.

Speaking of never admitting something, the biggest critics of Chromebooks are those who have never used them. This isn’t wholly unlike critics of the Tesla electric car, or General Motors’ Chevrolet Volt — the biggest complainers are almost always those who have never used the product extensively. Among heavy users for all of these new products, customer satisfaction is usually extremely high.

With Lenovo’s first Google PC, this will mark a milestone in computer history.

 

[Cross-posted at The Street]

About Art Lindsey III

Art Lindsey III is the Non-Editorial Operations Manager for SiliconANGLE Media. He is an internet broadcasting and podcasting pioneer, having partnered with Founding Editor Mark "Rizzn" Hopkins for more than a decade. Prior to working at SiliconANGLE, Art worked for Arts + Labs, a telecom policy interest under former White House press secretary Mike McCurry. He also served as a social media adviser to Andrea Tantaros of Fox News. In his spare time, Art enjoys traveling the country to verbally joust with politicians and operatives (when he's not eschewing sleep for XBox). Art lives in Peoria, Illinois, where he watches WWE and perpetually laments over the Chicago Bears.