How Google Apps could boost Chromebook sales

Google faces plenty of skeptics when it comes to Chrome OS, the browser-based operating system it hopes will catalyze a Web app future.

But when it comes to selling the vision, the company also has a group of potentially influential allies that already have a foot in the door: partners making a business selling the Google Apps suite.

Google Apps is the suite of Gmail, calendar, word processor, spreadsheet, and presentation Web apps that Google sells in subscription form for $50 per user per year. And although Google Apps hasn't come close to pushing aside Microsoft Office, it does have a lot of customers. And once somebody has bought into the Google Apps vision, it's not such a radical step to go all the way to Chrome OS. Think of it as preaching to the choir.

Chrome OS is a central feature of the Chromebook laptops that Google unveiled earlier this month at its I/O conference for developers. But Google is well aware that a Chrome OS laptop may not yet be for everybody, given that the operating system is a departure from existing computing technology, and in part for that reason it's restricting sales to online channels only. The first Chromebooks are expected to ship on June 15.

Meanwhile, Google Apps resellers, third parties that typically offer services such as training and migration to ease the transition to the technology, are champing at the bit.

"We've already seen interest in multiple Google Apps customers in moving to Chromebooks," said Glenn Weinstein, chief technology officer of reseller Appirio, which used Google's Cr-48 Chromebook prototype internally for its own business for three months. "The timing is good, and the interest is high. If we had Chromebooks today, I think we'd have interest tomorrow."

And Michael Cohn, co-founder and vice president of marketing at Google Apps reseller Cloud Sherpas, also has customer interest. "We'll start offering Chromebooks as soon as Google enables the reseller program," he said.

Such resellers are perfectly aligned with Google's Chrome OS strategy: focus initially on those who are already enthusiastic about Chrome OS, make sure they're happy, then spread to the broader market from there.

Business or consumer?
Naturally, a lot of focus for Chrome OS has been on the degree to which Chromebooks will appeal to consumers. If you had $500 burning a hole in your pocket, would you rather buy a Chrome OS laptop or an iPad?

Google hasn't discouraged this line of thought. When I asked Sundar Pichai, senior vice president of Chrome, whether Chrome OS was primarily focused on businesses, he said.

"I'm convinced it s a great device for most consumers," Pichai told CNET News in an interview. "This is something that will build over time. I'm absolutely confident it will be equally successful for consumers and enterprises. It suits both."

For consumers, it might well be handy to have a Chrome OS laptop lying around the kitchen or living room to answer e-mail, check recipes, and read some news. But Chromebooks aren't for everybody today: they can't handle Skype video chat, the Crysis video game, or hundreds of iPad apps that have broad appeal.

Among businesses, though, the context is very different. Here, central authority is often in charge of purchasing computing equipment, deciding what software it runs, and maintaining it. In this climate, Chrome OS drawbacks that could discourage average consumers can be an advantage.

"Enterprise IT departments already lock down systems so users can't install applications at will, with the aims of ensuring data integrity and security," said Scott McKenzie, a consultant at Cloud Logic, who hopes to start reselling Chromebook services in July or August. "We view Chromebook as an opportunity for small and medium businesses to have these same sorts of controls over users' systems and data integrity that enterprise have had for years, but at a fraction of the maintenance costs and without having to install expensive systems to achieve it."

In other words, some of the limits that might reduce the Chrome OS appeal to consumers are actually assets for business customers.

Chrome OS comes only built into laptops, not as a standalone operating system that anyone can install. Consumers can buy it conventionally--for example, Samsung's Series 5 Chromebook costs $499 with 3G hardware, not including data plans.

But for businesses and schools, Chromebooks are sold on a subscription basis starting at $20 per user per month for schools and $28 for per user per month for businesses. The fee includes warranty replacement of broken Chromebooks, and customers wanting to renew at the end of a three-year term can upgrade to a newer model.

The Chrome OS sales pitch for businesses emphasizes lower IT costs and less worry. It's easy to set users up with a new machine or to replace an older one; all they have to do is log on to their Google Apps account. Data stored on the machine is encrypted by default, and stored primarily in the cloud, so loss, theft, or damage of a Chromebook doesn't pose such a problem.

"Businesses want IT to be business partners solving business problems. The thing that always made that hard is fact that IT spends 60, 70, or 80 percent of their time caring for existing IT infrastructure. Let them focus on more important things," Weinstein said. "We're moving a significant portion of the client computing burden out of the enterprise and into the hands of the vendors."

What's a Chromebook good for?
Chromebooks, obviously, are suited to Web applications. But how much farther can they extend?

The Google Apps resellers, unsurprisingly, are optimistic about the prospects.

"I believe Chromebooks are a great fit for business travelers," said Jim McNelis founder of Dito. "They are small, lightweight, have a long battery life, and with 3G built in, there is almost always connectivity to the Internet, even when Wi-Fi is unavailable."

Offline access for Google Docs, due this summer, also could help for the times when Chromebook users need to work on places such as subways, airplanes, or conferences where wireless networks are unreliable or unavailable.

However, McNelis added, "For users who regularly use installed software, such as a trainer using GotoWebinar or WebEx, the Chromebooks are not currently a great fit."

Google is hoping partnerships with companies such as Citrix, which let such software run on a central server, will help patch over those problems.

"Companies like Citrix are enabling virtual desktop access through Chrome OS to help workers who make heavy use of desktop software programs like Adobe design," Cohn said. "In the coming years, however, we expect to see Web-based HTML5 applications replacing even this type of desktop software. The Aviary suite, for example, provides a glimpse into the future how traditional desktop applications may translate into a browser-based model."

Eighteen Dito employees have been trialing Cr-48 Chromebooks for the last five months. "Dito can do about 80 percent of our work on our Chromebooks today, only needing traditional PCs and Macs for desktop application-specific tasks, like GotoMeeting or Skype," he said. "We expect that 80 percent to increase to 95 percent by next year."

Of course, that raises an ugly Chromebook issue: if it's not a replacement for a PC, IT departments will get the hassle and expense of supporting dual systems. Don't be surprised therefore if Chromebooks show up first where they can completely replace a PC.

One clear place to start: "Anything customer-service oriented, like a call center," Weinstein said.

Weinstein sees Chromebooks as well suited to cloud-computing services--not just Google Apps, but also Salesforce.com for customer relationship management (CRM) software or Workday for human resources matters such as payroll.

Some customers have shown themselves ready for cloud computing, and the resellers are eager to push them one step farther with Chromebooks. Now it's just up to Google to let them off the leash.