Given the current economic climate, it should come as no surprise that the only growing segment of the PC industry is netbooks—small, lightweight machines that typically sell for less than $400. In these lean times, it's natural to wonder whether low-cost netbooks might provide a viable alternative to mainstream notebook computers in small-to-midsized businesses (SMBs) and perhaps even in the enterprise.

To determine whether netbooks make sense in your environment, it's important to first understand exactly what a netbook is, how it fits into the overall PC market, and whether the upfront costs of such machines are matched by the long-term durability and manageability features that one should expect from a business-class machine. And since netbooks tend to ship with very low-end microprocessors and other low-end parts, you might have legitimate concerns about performance.

Netbook History
The first netbook—an ASUS Eee PC-branded portable computer—arrived in late 2007. At the time, ASUS didn't have much of a retail presence in the United States, and the company hoped that it could expand beyond its traditional role as a supplier of motherboards and other PC components for first-tier PC makers such as Sony and Apple.

The original Eee PC was the most popular electronics product of the holiday 2007 selling season, thanks to its very low price—common today, but unheard of in 2007—and cutesy design. Into its diminutive body, ASUS packed an ultra low-voltage (ULV) Intel processor, 512MB or 1GB of RAM, 2GB to 8GB of solid-state disk (SSD) storage (in lieu of a hard drive), and a 7" widescreen display running at 800 × 400. It also featured other notebook PC–type features such as Wi-Fi networking, a full (if tiny) keyboard, and a traditional clamshell form factor.

Although it was originally designed for the emerging computing market, the Eee PC rose to prominence when ASUS began offering it in the United States, following in the footsteps of One Laptop per Child (OLPC), which had also been offering a weird little low-cost, emerging-market notebook—the XO—to consumers in the United States. Interestingly, ASUS didn't market the original Eee PC as a netbook, but the term caught on as other companies entered the market and industry onlookers and PC makers tried to figure out a way to differentiate the devices from notebook computers.

In fact, the Eee PC was so popular that other manufacturers jumped on board and almost immediately produced their own low-end portable machines. The first few companies to do so—Everex and MSI—were hardly household names, especially in the United States. But sensing a market opportunity, virtually all major PC makers (with the notable exception of Apple) jumped into the fray. They now all offer at least one brand of netbook.

The netbook's success was one of many affronts to Windows Vista, Microsoft's flailing desktop OS of the day. The Eee PC and other netbooks—incapable of running Vista—initially ran with a low-end Linux distribution, which led to a question of cost: Linux is essentially free. The popularity of Linux-based netbooks forced Microsoft to retrench and begin offering a low-cost version of Windows XP, which could run on the tiny Eee PC, to PC makers instead. This development further extended XP's lifetime and, perhaps more perversely, made the OS more popular than ever as the fledgling netbook market took off.

On the other hand, Microsoft was able to stave off an expected Linux threat in a key market. Although virtually all netbooks sold through mid-2008 included some form of Linux, today's netbooks ship almost universally with XP.

Sales of netbooks rose exponentially the first few years they were on the market, and analysts expect more than 35 million of the tiny devices to be sold in 2009, adding up to about 20 percent of all portable PCs sold. Almost all these sales are to consumers—not businesses.

What's a Netbook?
To secure first XP and now Windows 7 at bargain pricing, PC makers have had to conform to a set of specifications when producing netbooks. (They're free to use higher-end Windows versions, of course, but they'll pay a lot more and have to pass that cost along to the buyer.) The result is that today's netbooks share numerous common features that truly do differentiate them from other low-cost portable computers.

More specifically, almost all netbooks sold in late 2009 include a 1.3GHz, 1.6GHz, or 1.66GHz Intel Atom processor, 1GB of RAM, a 160GB (or smaller) hard disk, and a 10.1" (or smaller) display. Like notebook computers, netbooks have a clamshell form factor and typically feature wired and wireless networking functionality, two or more USB ports, VGA-out capability, a full keyboard, and other standard features. Some netbooks include 3G wireless connectivity; indeed, some netbooks are now subsidized through wireless carriers with data plans, much like smart phones. Netbooks don't ship with optical drives—a drawback that can make software installation difficult.

Intel's Atom processor is limited to 32-bit operation, and can address only 2GB of RAM. As such, most netbooks can be upgraded to 2GB of RAM, providing excellent Windows 7 performance. But PC makers, to accommodate Microsoft's licensing requirements, don't ship netbooks with 2GB of RAM.

Most netbook differentiation today surrounds style and battery life. The typical netbook from mid-2009 could achieve roughly four hours of battery life, but MSI, Toshiba, and others are now shipping netbooks that can achieve eight, nine, or more hours of real-world battery life—good for all-day usage.

So, a netbook is easily defined, but its position in the market is decidedly more vague. Today's PC makers ship a variety of portable computers, including traditional notebook computers of various shapes and sizes, Tablet PCs (slate and convertible), touch-compatible Tablet PCs, touch-compatible notebook computers, and even so-called smartbooks, which fit somewhere between smart phones and netbooks from a size and usage perspective. (A previous generation of smartbook computers was often referred to as the Ultra-Mobile PC—UMPC.)

However, the netbook's biggest looming competition is likely an emerging generation of slightly bigger netbook computers that have faster processors, more RAM capacity, and larger 11"-to-12" screens. These machines are simply notebook computers, of course, and will likely be marketed as such. But with better capabilities and only slightly higher price tags, traditional notebooks might eventually overcome the recent boom in netbook sales.

Do Netbooks Make Sense in Business?
Saving money is the top priority in most businesses, large or small, and that's truer than ever today. Looking at the current crop of netbook computers, it's possible to imagine them performing well in business scenarios, especially those machines (from top-tier PC makers) that feature longer-than-average battery life. There are some pros and cons, of course.

One of the most obvious revelations of the netbook era is that most users simply don't need high-end computers to get their work done. Assuming the device is large enough to use comfortably, a standard netbook computer can handle virtually any office-productivity software, including Microsoft Office, web browsers, and email clients. From a performance standpoint, netbooks are less compelling for users who have high-end needs, such as video editors or game players. But neither of these concerns is particularly problematic for the typical knowledge worker.

So, performance won't typically be a concern. But some other aspects of the netbook market make these devices less compelling for businesses. Netbooks' small screens (and onscreen resolutions) make them less than ideal for software such as Microsoft Excel and PowerPoint. The lack of an optical drive can make software installation difficult in smaller, less managed environments. And because most netbooks sell with a very low-end version of Windows 7, you'll need to upgrade the systems to more business-appropriate versions, such as Windows 7 Professional or Enterprise.

Durability is a concern, regardless of the make or model you're examining. PC makers large and small skimp on the components they use in netbooks because these devices sell for next to nothing and come with razor-thin margins. So, although it's possible to acquire, say, mainstream business notebooks with important reliability technology such as chassis roll cages, hard-disk suspension systems, and fingerprint-logon capability, netbooks from the same manufacturers feature none of these things. And they ship in cheap plastic bodies that degrade during the course of normal business travel. (According to market researchers, most netbooks are used exclusively at home.)

Most important, perhaps, you won't be able to find a netbook from any mainstream PC maker that's available through volume purchase to business customers and that comes with any kind of acceptable support. This void leaves out enterprises, but it should give pause to smaller businesses as well. Lenovo, for example, markets a diverse line of ThinkPad notebooks, Tablet PCs, and portable workstations to businesses. But if you're interested in the company's netbook products, your only option is the consumer-oriented IdeaPad line.

Businesses that do opt for netbooks will likely discover that the long-term costs of such machines will wipe out any up-front savings. These costs will include downtime for repairs, maintenance, and the cost of upgrading the hardware and software to meet the needs of users.

So, are netbooks a total wash in the business environment? Not quite. Netbooks are perfect for one particular scenario—and, not surprisingly, it's the scenario that matches the way that consumers are already using these devices. For employees who frequently work at home—including nights and weekends—netbooks might, in fact, make more sense than traditional notebooks or desktop PCs. The reason is that netbooks won't sustain the same level of abuse at home as they would on the road. And because netbooks are typically so cheap to acquire, and yet so popular with individuals, they'll be accepted by users quite readily.

Recommendations
Netbooks just don't make sense in most business environments, where their low durability and general unsuitability to the rigors of travel will prove problematic and overcome any upfront cost advantages. That said, netbooks do have their place in the broader PC market. If you run a smaller environment and need to accommodate users who work from home, netbooks are an interesting choice.

If you're choosing a netbook, be sure to choose a device from a major PC maker. Battery life won't be a significant problem for home users but should still be a concern as many users will prefer to be untethered for the day. Interestingly, the latest versions of the ASUS Eee PC line are still quite popular and meet these needs. But netbooks from Dell, HP, Lenovo, Samsung, Toshiba are all highly recommended.