By 2004/05, mainstream application platforms will incorporate pervasive middleware, consolidating the market and requiring tradeoffs between short- and long-term strategies. By 2006, wireless access to enterprise applications and portals will be common, with solutions supporting smart and thin clients, synchronized for connected and disconnected users.

During the next three to four years, we expect the purchase of notebook computers by enterprises to increase from approximately 25 to 30 percent currently in North America (10 to 15 percent in Europe, 5 to 10 percent in Asia Pacific) to 35 to 40 percent (20 to 25 percent in Europe, 15 to 20 percent in Asia Pacific). We believe this trend will continue despite the significantly greater total cost of ownership (TCO) for notebooks (approximately $4.5K/user/year versus $2.5K/user/year). In addition, we expect a gradual reduction in the purchase cost of notebooks (approximately 5 to 10 percent per year for the next three to four years as LCD panel prices decline, though potential memory price increases may negate some of this cost reduction). However, we do not expect notebooks prices to fall as dramatically as desktop prices have during the past few years. We also do not expect the acquisition cost of notebooks to approach the lower acquisition and support costs of desktop machines any time soon, or to achieve the same useful life (two years for notebooks versus three years for desktops).

During the past year, we have noticed a slight decrease in the expansion of notebook installations, primarily due to company cost cutting. Indeed, with tight budgets in a down economy, some companies are viewing prices of notebooks ($1,800-$2,200) versus desktops ($600-$800) and requiring much more scrutiny before deploying a notebook. (Indeed, we have recently heard from some companies that are requiring all future purchases to be desktops.) Furthermore, the overall TCO of a notebook is substantially higher than that of a desktop. Although companies should carefully control costs, we also believe that making a notebook deployment decision based on pure costs alone is shortsighted. Companies must balance procurement and ongoing costs with potential productivity gains associated with being truly mobile (e.g., being able to work on planes and trains, working additional hours, being able to more easily meet deadlines). Although we expect a few companies to make blanket decisions regarding laptops (e.g., every knowledge worker receives one), most companies will divide users into classes that require a notebook and those that do not (or who can be served by a portable device, such as a Palm, BlackBerry, or Pocket PC, though we expect this class of device to remain primarily focused on personal information management functions for the next two to three years).

Enterprises should evaluate the following criteria when making a choice for individual deployment of a notebook:

• The level of the individual and how much that person's time is worth. Clearly, the payback for an executive making hundreds of dollars per hour using a notebook, even if only gaining a few additional hours of productivity a year, is attractive (see Figure 1).
• The amount of work done out of the office (both during business travel and work at home/remotely). Employees that travel more than 20 to 25 percent of the time should have access to a notebook to stay productive with word processing, presentations, sales force automation applications, etc. (Although some e-mails can be handled by PDAs and/or BlackBerrys, complex messages with attachments or high volumes of messages can best be handled with a notebook and a high-speed connection.) Furthermore, a growing number of employees now work one to two days from home, rather than commuting to reach an office. Some companies allow users to utilize their own personal computers when working from home, but we do not recommend this practice for enterprise applications (other than applications accessed via a browser. In addition, some companies are evaluating the cost of purchasing two desktops for their users - one for home and one for the office. The overall cost and complexity of managing such a strategy make it very unattractive (e.g., cost of two systems, keeping both systems updated and synchronized, paying for two software licenses). We strongly recommend against this strategy.
• The lost opportunity costs associated with a user who may be unable to work "inspirationally" during off hours. Many productive people actually do much creative work when out of the office (e.g., reports, presentations, documents, proposals), particularly during evening or weekend hours. Although many could use pen and paper, the cost of re-entry of data into the computer (by the creator or an administrative assistant) can create substantial increased cost of operations.
• The increased hours employees will work if a convenient platform (including connectivity) is included. Indeed, studies have shown that employees who take notebooks home (or have access to a machine at home) work an additional two to four hours per week. Although this is perhaps not attractive to the employee or family, it does increase the overall payback of that employee to the company.
• Intangible end-user desires (e.g., reading e-mail after hours), which users have come to expect as part of the job. Although this may not be easy to monetize, it is nonetheless a significant expectation among many knowledge workers.

We believe companies should include notebook computers for selected personnel as part of their overall end-user computing strategy. Indeed, if we are to assume that an average knowledge worker is paid $100-$120/hour, then as little as 20 extra productive hours of work per year due to notebook availability will more than offset the additional TCO, which includes both the acquisition and ongoing support costs.

Business Impact: Companies that fail to appropriately deploy notebook computers as part of an overall end-user computing strategy are impeding end-user productivity.

Bottom Line: Companies should not stop deploying notebook computers solely because desktop machines are lower-priced. In most companies, platforms that enhance mobility (e.g., notebooks) of knowledge workers also increase productivity and add real value to the bottom line (potentially thousands of dollars per user). Companies should combine deployment of both desktop and notebook computers to maximize end-user productivity.

"Do Notebooks Pay?"
Originally published by META Group on August 12, 2002
By Jack Gold

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