Business Imperatives:

• Before even considering embarking on a program of free or discounted PCs, CIOs must first get senior management to understand completely the attendant networking, support, maintenance, upgrade, replacement, and other asset management costs such PCs will create. CIOs must also make absolutely sure such a program makes sense, given the nature of the organization's primary business, the percentage of work that can be done remotely via access to networked computing, the current level of access and skill among current and potential users and other factors.
• CIOs should realize that PCs without at least access to a minimal set of corporate applications and resources are useless, regardless of their initial cost. If key enterprise applications are not already Web-enabled -- Internet or other remote access -- or if an enterprise's networking infrastructure is not already primed to support a sudden spike in remote use, CIOs considering free or subsidized employee PCs are setting themselves up for disaster.
• CIOs should look closely at what Delta, Ford and other companies are doing with their respective programs for free or subsidized PCs. There can be significant advantages in linking employees into volume purchasing clubs, test audiences for new offerings or features, or other purposes. However, unless clear business benefits can be confidently projected, completely documented and effectively delivered, many companies would likely be better off waiting or considering alternatives to programs for free or subsidized PCs.

Delta and Ford are already rolling them out. General Motors, United Airlines and others are looking into them. Perhaps most telling of all, numerous industry participants and observers are already becoming highly charged and divided over whether they should exist at all.

"They" are free or company-subsidized PCs, complete with monitors, printers and access to the Internet and World Wide Web in many cases. The pioneering companies implementing such programs believe they can increase use of networked corporate resources such as online scheduling, training and key applications. Some even have plans to turn their vast array of networked users into volume-buying clubs that receive discounts from select vendors, test beds for new online features and services, or both.

However, not every enterprise is a Delta or a Ford. Each of these companies has a large, far-flung workforce and a long history of investing in and relying upon information technologies heavily throughout the organization. At enterprises where CIOs are still trying to garner sufficient support from senior management to fund and field adequate internal PC support resources, the idea of company-provided, company-subsidized and company-supported PCs for everyone likely strikes fear into the heart of every IT worker.

Nonetheless, at some enterprises other than Delta or Ford, such a plan may make sense, but if and only if the appropriate internal and external resources are lined up and made fully available. Internally, CIOs must first determine if the workforce will actually use and benefit from company-provided computers and network access. If core tasks are not easily adapted to secure, remote network access, simply implementing an adequate infrastructure for such access may be more than is possible with current resources.

CIOs must then decide if corporate goals are best served by creation of a portal for Internet and Web access and requiring employees to log on via such portals, as Delta and Ford plan to do. This offers significant opportunities for control, security and leveraging the entire user community, but may require skills and resources a company does not have and cannot find or afford to obtain from outside. The alternative, simply allowing employees to select their own PCs and/or Internet service providers (ISPs), may involve less initial cost and work, but is almost certain to cause increased support headaches in the future.

Not even Delta or Ford could implement their programs without outside help. In their cases, each has partnered with PeoplePC, a provider of "all-in-one" bundles of PCs, hardware, software, Internet access and support for $24.95 per month at retail. However, even with corporate subsidy of large new groups of users, neither PeoplePC nor any of the other "free PC" companies launched with much fanfare during the past 12 to 18 months has proven its business model to be successful or profitable. Thus, CIOs face the potentially harrowing choice of relying on an outside partner with an unproven business model or taking on the entire burden of support, upgrade and replacement with internal resources.

Also to be remembered are asset management issues. Companies providing free PCs need to determine the refresh cycle. Employees may expect replacement with current technology in two or three years, making such a program an ongoing capital expense. Firm guidelines must be established and communicated regarding software and hardware standards as well as upgrades. Otherwise, support will be extremely difficult and companies could open themselves up to software license violations.

To be sure, a well-executed plan for corporate subsidy of employee computing power and network access could deliver exciting and unique business benefits. It could improve recruitment and retention of desired workers, lower overall training costs by reducing training-related travel and deliver true buying power to an enterprise, as well as to individuals within it. It could also deliver Internet access to workers and their families who may not yet be able to afford it, a boon to those people and an almost definite boost to their corporate loyalty.

However, questions about overall Internet infrastructure are being raised, particularly in North America and Europe. In addition, new network access tools that are simpler and less expensive than PCs, yet more capable than today's PalmOS- and Windows CE-based devices, appear poised to appear in significant numbers. In addition, working out how and under what circumstances departing employees return, give back or compensate the company for provided PCs and network access will be thorny at best. These and other factors may outweigh any foreseeable short-term benefits at many enterprises, persuading CIOs to watch and wait a bit longer.

RFG believes company-subsidized computing and networking can offer some business benefits to the enterprise, as well as perhaps more obvious benefits to employees who participate. However, significant questions remain, some of which may determine whether such programs succeed or fail and none of which appears to have an easy or clear answer for every organization. It may therefore be better for many CIOs to await the real-life experiences of others before embarking upon a program of company-subsidized computing and networking for everyone in the enterprise.

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