Google's Chromebook for business: Interesting math, but your mileage will vary

Google's Chromebook for business: Interesting math, but your mileage will vary

Summary: What follows is a good faith effort to highlight some of the arithmetic needed to make a comparison between Google's Chromebook, a thin virtualized client and a PC deployment.

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Google's big pitch for enterprise adoption of its Chromebook revolves around labor savings, easy implementation and cloud-based processes, but your mileage---and the math to get there---will vary.

At Google's I/O conference Wednesday all the talk was about the Chromebook and the company's browser-based Chrome OS. I'd argue that the Chromebook will have a rough outing with consumers. Just based on the price tag of roughly $400 it's hard to see the Chromebook competing with a tablet.

The enterprise, however, may find the Chromebook more appealing. At a press conference, David Girouard, president of Google Enterprise, said that the launch of the Chromebook and Chrome OS will be as big as Google Apps. "It's a big day for us. Corporate computing has been broken for a long time," said Girouard, who was flanked by three customers that tested Chromebooks in pilots. Citrix's Gordon Payne, general manager of the desktop division, also highlighted an HTML5 version of its Receiver software to get Chromebook users to SAP and other enterprise apps.

Google's point is that desktop management has been a mess and it's costly. As a result, Google will handle desktop management, updates, warranties, security and support for $28 a month per user ($31 for 3G). "Our TCO (total cost of ownership) is less than half of what people do now," said Rajen Sheth, group product manager Chrome for Business.

These heady comments spurred a few questions. How does Google Chromebook compare to a thin client rollout? How about virtualized desktops? What about training costs?

Google argues that there are few training costs because of consumerization and the fact that everyone knows how to run a browser. I don't buy that. Google Apps requires training and so does living in the cloud. Meanwhile, Google's Chromebook will be very different for many employees.

So what's the math? I did some digging and found it a bit surprising that neither Forrester nor Gartner could cough up figures easily. The more I poked around the more I realized that no one quite knows what a PC roll-out costs. Some folks stretch out upgrade cycles to five years---Google assumes a three year cycle. No company upgrades all of its PCs at once, which also alters the equation.

Toss in depreciation and tax benefits and you go from zero to complicated in a hurry.

What follows is a good faith effort to highlight some of the arithmetic needed to make a comparison.

Google will charge you $28 per user each month. For a typical company of 1,000 users that works out to $336 a year per user. That's $336,000 a year. One potential catch is that you sign on for three years and if you choose not to go Chromebook in year 2 you still pay for that extra year. Another item is that you'll need Citrix to access enterprise apps. If you don't have Citrix you'll have to license it.

So what does a PC deployment cost you for 1,000 users?

Moka 5, a company that specializes virtualization, said the typical annual cost per user is $3,030, or $252 a month. That's more than $3 million a year for a company of 1,000 and includes amortized hardware, software and support. The $3,000 a year figure was toss around quite a bit on Wednesday. That figure derives from a Gartner report that Ed Bott picked apart last year.

Digging a little deeper it appears that that $3,000 figure per user a year includes indirect costs (lost productivity and other items that are largely intangible). This Gartner report from 2008 via Citrix shows total cost of ownership for a locked and well managed PC of $2,845 a year. However, "end user costs" are $1,123 of that total.

In a footnote, Gartner said "indirect costs, or end-user costs, are costs that do not appear in the IT budget." In other words, "end-user costs account for the lost productivity of users who are learning about their systems, or are doing IT-related tasks without relying on formal support channels."

Meanwhile, these indirect costs aren't static. Year one may require some learning. Year two may be indirect cost free.

Thin client and virtualized deployments lower these indirect costs because they take away user control. Google's Chromebook would do something similar. After looking into indirect costs, I'm going to exclude them because a) they're partially made up; and b) every user will have a different indirect cost so it's hard to generalize. In addition, indirect costs are the easiest to fudge to make a point.

Cut to the chase and a well-managed desktop deployment will have direct costs of $1,874 a user per year. A server based system---virtualized desktops and thin clients---comes in at $1,655 or so. No matter how you slice it Google would come in cheaper.

Google featured three customers: Kevin Verde, CIO of Jason's Deli, Rachel Wente-Chaney, CIO, High Desert Education Service District in Oregon and Sanjay Dhar, vice president of IT, Logitech.

For our purposes, Dhar is probably the most representative use case.

Dhar liked the simplicity of the Chromebook and reckons that he will deploy a few of them. However, Logitech has virtualized desktops and plain old PC deployments too. Dhar won't go completely Google and will have a mixed PC shop.

His key points:

  • Logitech employees just expense laptops so there's no centralized roll out per se.
  • The upgrade cycle varies. Some engineers plow through laptops every year or two. Others have older PCs.
  • Those engineers don't use support and are low maintenance because they're techies.
  • He liked the concept that Chromebook would take a lot of backend management away from Logitech.

Nevertheless, Dhar noted that not all employees will flock to the Chromebook. It's good for an option and can be economical, but Google will be seeing pilots and trials for the foreseeable future. The biggest challenge for Dhar will be the three-year upgrade cycle with Google. Different sets of employees have different upgrade cycles and some simply need more power than the Chromebook can provide.

One other nugget is that Logitech's PC deployment will be complex. Sure it can farm out Chromebook administration, but Logitech will have thin and fat deployments too. In other words, one size of PC won't fit all.

And one last final note---for now at least. I pinged the Enterprise Irregular list and the reaction to the TCO case was mixed. A sampling:

If the tool is ineffective for the job, why even worry about the ROI or a comparison to some other tool that works better? Else, we would be looking at OLOC (one laptop, one child) as viable, cheap solutions for the enterprise.

Translation: Chromebook's good enough may not cut it for users.

Another reaction:

If Google had done this prior to iPad intro it may have had a bigger impact because many CIOs are now looking to let employees use their own make of device, rather than stay stuck in 3-year laptop treadmill.

That last reaction shouldn't be underestimated. On the consumer front, the Chromebook will be competing with tablets, which could be a much more fun thin client that's already armed with Citrix and other enterprise tools.

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Topics: Mobility, Banking, Google, Hardware

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22 comments
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  • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

    With a very cloud centric system there will be additional connectivity costs which I guess this article is discounting.
    jeanshack
  • ??

    It all sounded very reasonable until I read this:

    "Google Apps requires training and so does living in the cloud."

    If you've been using computers at all, then you know how to use a browser, in particular chrome. If you've been using MS office then you won't have any problems adapting to google docs. Or else just use MS office live, it is identical to MS office. Training? None!

    These are laptops, they are meant to be used as mobile devices! So what do people do with their laptops, even their corporate laptops in a mobile environment? Yes, 90% internet, e-mail, skype, office presentations, word processing and spread sheets. You don't do any heavy lifting on your laptop. That's not what it's for.

    Sure, these laptops are not going to replace every computer in your business, but they may very well replace your windows 7 Laptop. Hell, people are using apple i-pads in a business environment and they offer a lot less functionality. So why can't these laptops be used? You get them for around 400? and you're telling us that the total cost of ownership is excessive? For real!?
    kikl
    • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

      @kikl The other way round here... Most employees have a terminal (Igel or Terra) and connect to a Linux X-Windows session or Windows Temrinal Server. For those that need to do presentations on the road, where they will probably have no 3G connection and not be able to use the customer network to gain access to our servers, they get a laptop and synch their files locally, before leaving on a trip.

      Google Apps doesn't provide a suitable replacement for MS Office - you can't integrate Google Apps spreadsheets into the ERP system for analysis purposes.

      We already use a wide variety of platforms. Our ERP software is written for a Linux environment, the data acquisition software runs on Atom based IP-65 (water resistent) touch terminals in a stainless steel hous, running under LTSP (Linux Terminal Server Project). The processes which comminicate with scale, Fat-O-Meters etc. run on a Linux virtual machine. The front-office software works on Windows, with tight integration into MS Office.

      Our boss doesn't believe in users getting a PC for their work, but the cloud doesn't currently offer a solution for what we do.

      Add in the fact that the purchase price of a ChromeOS notebook is more expensive than a Windows Terminal or a cheap laptop, which does more, and the whole thing starts to look fishy.

      And most of the companies we deal with seem to work on a 10 - 15 year replacement cycle. We still have customers who are looking at decomissioning their DEC Alpha UNIX servers in the next 2 years!
      wright_is
      • You can use Microsoft Office 365 on Chrome OS

        @wright_is
        I have found Google Apps more than suitable as a replacement, but if you must have Microsoft Office then you can use Microsoft Office 365 cloud service from ChromeBook.
        Mah
    • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

      @kikl "MS office then you won't have any problems adapting to google docs." - that has not been true here. Our users 1) yes picked up Google Docs, 2)but they had issues converting "down" to Google Docs. They lost functionality and thus had to figure out how to get around these issues.
      ItsTheBottomLine
  • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

    You forgot a very important point, price does not include Google Docs. Price only includes Chrome web browser. Thats it... $28/Mo for a free web browser on netbook hardware.
    mjlaverty@...
    • There's a little more to it than just a web browser...

      @mjlaverty@...

      $28/Mo also includes replacement warranty and administration software.

      For small businesses, schools, and small government that can go all Chromebooks and don't already have the Windows Admin infrastructure HW/SW in place, this will be a huge savings. However, for larger companies that still need to manage various types Windows machines and have the Windows admin HW/SW and technical employees already, this isn't as much of a value.

      The value of Chromebooks will vary based on the situation, but saying that the price only includes the web browser is disingenuous.
      Caffeinated85
    • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

      @mjlaverty@... Correct cost is $5 additional per month or $50 additionally annually.
      jessiethe3rd
    • I believe it is included.

      @mjlaverty@...
      It's $50 per user per year for Google Docs. However I believe this is included in the $28 subscription to ChromeBook.
      Mah
  • Managed thin clients are about the same price

    And offer a richer desktop experience. Google is going to have a hard time competing with Wyse. There is no compelling differentiator for Google. It offers nothing that Wyse does not already offer for a comparable price and it sacrifices way too much in functionality and usability.
    Your Non Advocate
    • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

      I totally agree. As I said above, we already use terminals for a majority of staff and the ChromeOS doesn't seem to offer anything that we don't already have - apart from the Chrome browser running on the "terminal", instead of Firefox or IE... And given SAP's penchant for IE, I don't think ChromeOS is going to be a big persuader for their customers...
      wright_is
      • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

        @wright_is But doesn't that mean you have redundant copies of microsoft windows which you are not really using. You have dummy terminals with a fat and expensive OS just sitting there. And each one of your computers has a x hundred GB hard disk which is not being used at all.

        Google Chrome lets you remove MS windows and save costs. The Chrome book is a dummy terminal (what you actually need) not a full mainframe computer (essentially what a modern laptop is). Or am I missing something?
        The Star King
      • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

        @wright_is @the star king
        Chrome does not integrate with RDS as Chrome is not a supported browser type. You may not have read what he posted but SAP does not support Chrome browser.
        jessiethe3rd
      • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

        @The Star King

        Why would we have Microsoft Windows lying aroung? We have Igel terminals, they either have embedded Linux or Windows Embedded installed. No Windows licenses needed at all - other than on the Windows Terminal Server, although most users connect to Linux Servers...
        wright_is
    • It does a whole lot more than Wyse but with comparable maintenance overhead

      @facebook@...
      It has a full featured browser, is battery powered and luggable, does automatic OS, and browser updates, WiFi, 3G, USB storage access, Media acceleration, 1080p video output, 2D and 3D hardware graphics acceleration for the browser and Flash, and it does everything the Wyse does in addition. It is a Wyse on steroids.
      Mah
  • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

    Many people thought that Android was going to fizzle out after the first year. Now android is the number one smartphone OS out there. We will see where Google get's with their desktop OS but I think they will be able tweak it and make it just right for any company. I see them getting a few big company's but where they are going to do their best is in the Start-ups and small company's. If Google can give a good push for Home use that would give them a small edge but like I said before Start-ups is where it is at for them.
    nickitnite
    • RE: Google's Chromebook for business: Interesting math, but your mileage will vary

      @nickitnite Even start-ups need to share documents with prospective venture capitalists in word document format... something where formatting at the base is not properly implemented and support on GAP.
      jessiethe3rd
  • soham

    citrix would play an important part anyways its a slow process it would take time for google to get soem gorund..hospitals and hotles is where they can get initial custoemr base....lets see how everything rolls out..but chrome os being anew thing it would take time.. and Sap doesnt support chrome the browser so i think its a limiting factor but who knows about the future
    sohamB
  • soham

    what about the chrome box any details on that??
    sohamB
  • Thin client is a dream for old big company.

    Any big company that have any custom old software will not be able to switch to Chrome OS. The truth is, big company have some many old custom app, It is almost impossible to upgrade the OS because of backward compatibility. I know lots of company still running xp because they cannot upgrade to window 7 because of application they have will not run in win 7. Good luck running those app in Chrome OS. If google offer some kind of custom software rewrite for company for free, then we are talking.
    jkc7297