RSSChrome OS is futureware, not vaporware
By Joe Wilcox | Published July 14, 2009, 11:59 AM
Many of the pundits claiming that Chrome OS will threaten Windows give the wrong reasons. They're not seeing the big picture. Likewise, those people asserting that Chrome OS is no threat to Windows are wrong altogether -- same can be said of those people calling the operating system vaporware. Google has got the right approach at the right time.
Microsoft certainly isn't doomed because of the Google operating system. But Microsoft is in a big heap of trouble, because:
- US and European antitrust oversight limit how Microsoft can respond to the new operating system, particularly one with a browser at the core.
- The econolypse is tearing up Microsoft revenue streams, putting the company in a decidedly defensive posture. Priority is cost-cutting retraction, not expansion.
- Microsoft will not risk disrupting existing revenue streams or losing customers. Google can take big risks, because it is opening up new revenue streams and acquiring new customers.
- Google is focused on a new application stack -- from the mobile device to the Web -- but Microsoft has no comparable alternative. Windows is fragmented across disparate devices.
- Microsoft's existing application stack -- Office-Windows-Windows Server -- is eroding. Content creation is rapidly shifting away from productivity suites, among businesses and consumers.
It's All About Platform Competition
Google and Microsoft are both already platform competitors. Microsoft's core platform is the PC, for which Windows is the extended platform. Google's core platform is the Web server, for which its search algorithm and wrapped-around informational applications and services are the extended platform. Microsoft has pushed from the PC and PC server to the cloud, with Windows Live/Bing, its Online Services and forthcoming Azure Services Platform. Google has pushed to the PC -- and more recently the mobile phone -- with Desktop Search, Gears and other applications. Google also has pulled some applications to cloud, with services like Gmail and Apps.
Where the platforms collide is the revenue stream and how partners make money from them. Microsoft sells software through partners. Microsoft software isn't free. Partners make money by selling and servicing the software or selling hardware around it. Windows is a lucrative platform for many, many, many third parties.
Google's revenue approach is quite different, and it's this difference that keeps Microsoft CEO Steve Ballmer up at night worrying about Google: Free. Google gives away most of its products or services for free, or charges very little for them. Google instead derives revenue from services sold around its free stuff -- as do the company's partners.
Free is Microsoft's worst nightmare. It's why Ballmer obsessively chases every new Google product or service. Microsoft can't compete with free, and company executives clearly understand. It's one explanation why the company spends so much time and money on TCO studies attempting to show that free software, like Linux, costs more than Windows and other Microsoft software.
Microsoft understands free all to well. Youngster Google is doing to Microsoft what Microsoft did to so many competitors when it was a young company with few customer or technological obligations. Microsoft gave away stuff for free, too, or charged much less than established competitors like IBM. What is Windows bundling but the taking of something some other developer charged for and giving it away for free with the operating system? Microsoft makes money directly from and around the Windows platform, which, until recent antitrust problems, extended by way of stuff bundled in for free. Likewise, Google makes money directly from and around its Web platform by offering stuff for free. Microsoft's problem: Google free cuts into existing revenue streams. Microsoft cannot compete with free, when it comes to Office, Windows or server software. (Microsoft's so-called free productivity response, Office Web, will be topic of another post.)
Late last week, Google clarified: Chrome OS will be free. Big deal, some people will say. Linux is free today. But Linux isn't a broadly appealing platform, either. Google, like Microsoft, offers a platform that makes lots of third parties lots of money. Google is positioning Chrome OS first for mobility. Chrome OS will put the "Net" into netbooks and mobile handsets. Google's strategy is simple: Extend free vertically along a new application stack from the mobile device to the cloud.
I'll highlight one simple opportunity, as example: GPS. Google's search and advertising business would have more punch from GPS location. Suddenly, local search would be more local. Keywords and other advertising could be location specific. GPS is standard on most smartphones and it's moving to netbooks, too. The power of Google free is what the company can sell around the platform along the vertical stack from mobile device to the Web.
Joining the Social Revolution
Microsoft's application stack is quickly losing relevance. Google clearly understands this. I don't really want to call my former colleague, and really smart analyst, a Windows apologist. But it's oh-so 2005 for Michael Gartenberg to assert that "Chrome OS is not a threat to Windows." He asserts: "Right now, this all about Google putting pressure on Microsoft at a time when MSFT would rather keep the market focus on Windows 7, not some upstart Linux platform."
Yes, that was true four years ago. But not today. Sure, Google is tweaking Microsoft a bit, but Chrome OS is serious business.
Look around at the startups bringing societal changing products to market -- and I contend the cultural impact is at least as dramatic as brought by the PC. For example, most social media startups, whose products and services are taken for granted today, came to market in the last three years. Facebook, Twitter and YouTube opened to the public in 2006. Most other popular or growing popular social media tools launched within the last three years: Disqus, FriendFeed, tumbr, Twine, Qik and USTREAM, among many others.
Facebook claims over 200 million active users, up from about 150 million six months ago. US Facebook users spent 13.9 billion minutes on the site in April, up 700 percent year over year, according to Nielsen Online. In May, Twitter had 18.2 million unique visitors, for 1,488 percent year-over-year growth, according to Nielsen Online. Same month, 95,357 unique viewers watched more than 6 million video streams at YouTube, according to Nielsen Online. Second-ranked Hulu: 382,322.
Something else happened since 2006. Microsoft released the poorly received Windows Vista. Most PC users ended up staying with aging Windows XP, which needed to get new features from somewhere. Startups delivered them from the cloud. Meanwhile, Apple marketing and Vista malaise helped boost Mac sales, further empowering cloud computing and social media startups.
Internet Explorer should be the gateway to these cloud services, but its usage share is declining. For the first three weeks of June, Internet Explorer usage share was 65.5 percent, down from 79.12 for June 2007, according to Net Applications. Stiffer competition is one reason. For example, within the last three years, Apple and Google released Windows browsers, Safari and Chrome, respectively.
If Google launched Chrome OS four years ago, Microsoft wouldn't need to worry. But today, the PC's relevance is in decline before the mobile and Web platforms. Absolutely, Chrome OS is a threat to Windows and Microsoft's application stack. Again, to be clear: The erosion will come from mobile devices along the new application stack to the cloud rather than Microsoft losing to Google along its mature application stack from the PC to the server.
This article is well argued and gets the point of what Google is doing, but as a programmer/network designer can I ask you stop using the phrase "application stack" in the way you are doing.
It almost like you know about the ISO 7-layre model, but you clearly don't, Ms Malaprop.
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|Grr... have to sign up to comment now... :(
I agree with this article *except* that I think 'FREE' is EVERY company's nightmare, some (like Google) just don't know it yet.
Just like Microsoft was sitting intoxicated at the wheel with monopoly power, Google is tripping high on ad revenue and doesn't see how they are cultivating a whole generation of consumers into expecting to not pay for things.
Microsoft, Adobe, Apple and others might be competitors in some respects, but i think they also recognise that they are allies in the fight to "reprogram" the hipster facebooking you're-only-as-good-as-the-number-of-twitter-followers-you-have group of consumers to pay for good services, software, content, etc...
I think the rapid pace of technology confuses many companies and CEOs into thinking that this is a process of "creative destruction" and a "revolution" which they just don't understand so they'd better just play along and pretend (*cough* Sun *cough*), whereas it's entirely possible that we're about to embark on a dark age where ad-network and datamining operation owning companies are the only ones with the scale and funds to create anything.
How can a small independent creator / developer / whatever, be successful if in 10 years time everyone except the 45+ year olds are expecting free lunches??
Yes, this is probably a load of crap, but I just HATE this bloody sentiment of "make it free!", "get lots and lots of users!", "hide the true costs in various sneaky ways!"...
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|"Microsoft's application stack is quickly losing relevance. "
To who, the bandwagon of MS haters who are slurping up "anyone but Microsoft's" coolaid? This is incredible.
Here, let me see if I can make this post seem really credible to those who actually buy this stuff, by saying "Application Stack" many times. It seems to have worked for this article.
Application stack blah blah blah Microsoft will die blah blah application stack macs rule pcs drool blah blah application stack application stack blah blah google ftw blah blah application stack application stack application stack drink teh coolaid application stack blah blah blah APPLICATION STACK
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|It really boils down to this, Google half asses most of their projects.
It took MS how many years of research and development to get to where they are now and billions of dollars and a team the size of an army.
The big question is will Google put in the same resources or half a** another project over the long haul.
The other question has to be about Google holding ALL your info on their servers, as a business owner I have to say I won't give them any of ours.
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|If Google only does a half-ass job as you say on most of their projects, they're ahead of Microsoft which does the same for all of their projects.
Once again, I'll say that Chrome and Chrome OS are there to support their application services and monthly revenue. They aren't there to capture the operating system market from Microsoft. Google have already stated that they'll have something available for netbooks early. It's not exactly a great leap anyway since it's only their value-added software that needs to be piled on top of the Linux base.
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|The author fails to acknowledge Microsoft is already a step ahead...Silverturd is its cloud OS/platform. Google Chrome OS is not going to hit Microsoft where it would really hurt...Office use by businesses. Sure, Microsofts super expensive OS'es and other super expensive programs make a bit of money on the consumer side, but the business use it where their gravy is as they can get away with charging outrageously high prices for their software
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|Didn't Netscape tried this s*** back in the ice age? Hmm.
Happy Chinese Internet Maintenance Day! nobuski.com
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|so Google will NOT be subject to the same rules as m$? who did google buy this time?
Give me the OS I will install it on a machine and see if it will meet my needs. Until then keep talking..
Yes I did see some acer screen shots.. but google talk and tool bar doesn't really mean much to me.
Will we have to re-write millions of lines of code to get our software to work on this new OS??
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|>> Will we have to re-write millions of lines of code
>> to get our software to work on this new OS??
Without the Win API, yes. Desktop apps will suffer the most.
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|We can always be lazy and use Wine for WinXP compatible applications.
I do NOT recommend it.
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|Microsoft's application stack is quickly losing relevance
Now that's a riot..I didn't realize this was a spoof article for comedic intent until I read that.
Hey...BetaNews....how about screening authors for clear, persistant bias? This guy is a obvious Google Fan Boy. Just look at his last two articles here.
Of course, Sensationalized Journalism brings you viewers....so what do you care...right?
(Didn't "Anglea Gunn," just write something about this last week? Hmmm....hello Beta News, it's the Kettle calling.)
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|Wow.
They seriously need to add "author name" to the feed... I could have avoided this completely.
I think I've about seen enough wild-ass assumptions regarding a product *no-one* knows a damned thing about other than who's name is on it.
Nice bunch of mooney-eyed prophets we got here..
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|The author's points are mostly well taken, and on point, but the first - US and European antitrust oversight limit how Microsoft can respond to the new operating system, particularly one with a browser at the core. is way off base,
One cannot assume that the EU or the US would have a different response to a browser as a base of an OS, or distinctly tied to it, any differently for Google than they do for Microsoft.
Otherwise, one of the best articles, and analyses I've ever seen here.
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|As long as Chrome OS doesn't have a near-monopoly in the OS-market, Google can include their browser as much as they want.
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|A viewpoint is something everyone is entitled to, but some reality needs to be injected past the assumptions.
Right now one of the biggest barriers to accepting Google as a core for many businesses is the complex challenge represented by privacy/security and like issues. I'm not saying Google isn't trustworthy (who knows?), but that to a great extent regulatory conditions in almost all jurisdictions have a heavy penalty for doing something like losing private data like social insurance data, etc. What Google appears to be proposing (at this stage it is marketing, not defining) is an OS that is living outside the confines of the normal supposedly secure box companies are used to. Right, wrong, or indifferent, it is a different beast; and, as such, there is a barrier to adoption. And that has zilch to do with Google, and everything to do with the natural present state of public networks. It will take decades for most businesses to trust entirely any such browser-core OS, because the reality is their data is business-critical and the networks are not seen as trustworthy.
As for the decline of the desktop OS, I think anyone who believes that is ignoring reality. What we have here is a desire for change, sure, but the reality is that desire for change isn't impetus to change. If it was, any number of Linux products would have wiped out the MS hold on the OS market by now. The investment that exists in desktop productivity software is immense, and there is an inertia factor that defies any rapid change taking place. That considered, even if this is "futureware" the problem is the path to it is littered by any number of opportunities for MS to respond effectively. (My suspicion is Windows 7 will sell well, and that the stink of Vista will be erased by it rapidly, leaving the short end of that particular wedge deflected.)
Mostly, though, as I read the hype around Google's Chrome OS I find myself struggling with one question: what is the net benefit of this new OS? Sure, it's free, but free isn't relevant if I need a wholesale change in how I'm doing business now, especially if I'm an enormous enterprise. It is welcome competition, but until they show something concrete, it is and remains vaporware.
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|"Sure, it's free, but free isn't relevant if I need a wholesale change in how I'm doing business now, especially if I'm an enormous enterprise."
Exactly....didn't Linux already try the "free desktop?" Got real far in the past 5 years hasn't it? Even with the support of some OEM's...it's just not going to happen in this decade.
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|I think there is a good point in this article. World is changing, for us old IT-people it's hard to understand how yuorger generation is using social networking etc. I remember when i saw first PC back in eighties i laught, is this something that will take IBM mainframe and VAX/VMS places in corporations.
But now when we start a new company last year we decided to try live in the web. We didn't buy any servers, just laptop with 3g network, sign in Google Apps Premier, Salesforce etc. So far we have found that our company only need a browser for any application we use. We don't have any internal IT support, our IT costs are minimal what it was in previous company. So maybe next computer could be something like laptop with Chrome OS
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|Unfortunately, the US has no such rules regarding protecting private data. So, web/cloud apps are getting built and capturing market share; some of them huge shares. In addition to the ones you hear about frequently (Google Apps, Salesforce, etc.), there are big ones in almost every industry (vertical) and job role (horizontal).
Another factor in the growth of cloud computing is within enterprises. There are a great number of companies big enough to have their own cloud infrastructures. They have been building web applications, centralized personal data storage and saas apps and techniques for some time. Those enterprises may find that they've moved most of their computing off of the desktop before long.
Whether or not it would be better integrated into a "cloud-optimized" OS from Google than with Windows is another matter.
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