French startup Jolicloud is launching a netbook that it says offers Intel Corp. (Nasdaq: INTC)'s Atom dual-core n550 in a box that retails for less than competing PCs. The netbook is cheaper because it does not run Windows as its operating system, which Jolicloud has replaced with a very elegant-looking Linux-based OS that offers free access to more than 750 office, multimedia, and other applications.
The netbook meets what Jolicloud (which means “pretty cloud” when translated directly from French) sees as pent-up demand for a PC that performs the tasks of what the vast majority of computer users need, for a much lower cost. The company’s CEO and founder, Tariq Krim, says PC software is needlessly expensive. Jolicloud hopes to offer an alternative to Windows and Microsoft Corp. (Nasdaq: MSFT)'s Office applications, which are largely responsible for inflated PC prices (although Krim did not come out and say this).
Krim summed it up this way in an email: “We believe that people should either buy cheap computers or recycle their existing [systems] with Jolicloud. The expensive PC model with software will be replaced by a cloud-centric and cheaper model.”
To put Jolicloud’s netbook in context, Windows PCs have offered merely incremental improvements, at best, in performance for several years for word processing, spreadsheets, Internet access (which Microsoft continues to dominate, of course), and other PC apps. It is possible to spend a lot of money on high-speed CPUs with multiple cores and the latest version of Windows, but how much does computing experience change when using cheaper PCs to draft an email or surf the Web?
Jolicloud is certainly not the first OEM to offer a non-Windows PC alternative for a cheaper price. AsusTek Computer Inc. 's Eee initially generated a lot of excitement with its Linux distribution, solid-state drive, and low price of just a few hundred dollars when it launched in 2007. Since then, Acer Inc. , Lenovo Group Ltd. (Hong Kong: 992), and even Dell Inc. have also begun to offer inexpensive laptops or netbooks with low-power Atom processors that often come without Windows. But as Microsoft maintains its legally disputed monopoly for PC operating systems, non-Windows alternatives have failed to catch on. According to Net Applications, Windows machines still dominate the sector with over 90 percent of the total PC market share, while the Mac OS accounts for most of the rest.
So where does that leave Jolicloud? The launch has generated a fair amount of interest in the press, with coverage by EBN’s sister site InformationWeek.com, The Wall Street Journal, PCWorld.com, and The Inquirer. The French firm’s VC seed money comes from Mangrove Capital Partners , a Skype investor, and Atomico Ventures , which is headed by Skype founder Niklas Zennström, who obviously must think Jolicloud has a fighting chance. But the netbook is only available in the UK for £279.99 (US$371), with no immediate plans for it to see distribution anywhere else.
Meanwhile, the PC sector continues to muddle along with very few real improvements in performance, although Jolicloud and others are at least attempting to accelerate the downward pricing curve. But how long it will be before the PC business model dies as we know it and is replaced with something really exciting for personal computing applications is anybody’s guess.