Site menu:

Subscribe
RSS | Twitter

Chrome OS: The Winners and Losers

Earlier today Google hosted an event for it’s much anticipated new operating system dubbed Chrome OS. This is a very ambitious project that looks to create a lightweight operating system focused on streamlining the average user’s computer experience. Chrome OS consists of ONLY the Google Chrome browser running on a small linux kernel and some device drivers. The idea is that you will start your PC and within seconds you should able to start browsing the web.
The Winners: Google, Consumers, Web Developers
The Losers: Microsoft, PC Manufacturers
Apple: unaffected

google-chromeOn Thursday Google hosted an event for it’s much anticipated new operating system dubbed Chrome OS. This is a very ambitious project that looks to create a lightweight operating system focused on streamlining the average user’s computer experience. Chrome OS consists of ONLY the Google Chrome browser running on a small linux kernel and some device drivers. The idea is that you will start your PC and within seconds you will be able to start browsing the web. Chrome OS will contain support for USB devices like cameras and printers, but the laptops will not contain any local storage for a user’s files. All of the files that we typically store on our laptops will now be stored in the cloud in places like Google Docs or Gmail. Google is positioning Chrome OS as the perfect operating system for netbooks and other ultra-portable secondary PCs.

Chrome OS is a drastic change from the way we normally think of operating systems and personal computers. For as long as I can remember, computers have always had a hard drive and were fully capable machines without the internet. However, as the internet continues to evolve, we are starting to see more and more reliance on cloud applications and storage. Music streaming services like Pandora are starting to gain major traction, photos are all stored on Facebook or Fickr, and it seems like everyone has a Gmail account. We are spending less time using traditional desktop applications to access our content. And Google knows this. (Google knows everything…) As you might expect, a change this drastic has the potential to really shake up the industry, specifically the netbook market. Let’s take a look at some of the potential winners and losers if Chrome OS becomes widely adopted.

The Winners: Google, Consumers, and Web Developers

Google is clearly a big winner here. They are giving away Chrome OS for free (some sources are even saying “less-than free”) to PC vendors. Google wants PC vendors to install their operating system on all netbooks and other low-end machines. Up to this point, PC vendors have been installing Windows XP or Ubuntu linux on these netbooks. Linux is free for PC vendors to install, but I think they are paying a hefty price to install XP (which most customers prefer). Google is willing to invest up front in the development costs of Chrome OS in hopes of getting millions of users to use their software. Remember, Google is looking to expand their advertising reach and the best way to do that is to get people to run 100% Google software.

Consumers will also win big. Google has been working with PC vendors to create a new generation of netbooks which will feature bigger screens and only solid-state hard drives. I’m happy to hear that the screens will be larger because I am extremely turned off by the current generation of netbooks. Also, since the computer will only need to store a copy of the Chrome OS (probably < 2GB), the solid-state solution will be extremely cheap and provide excellent performance. I would expect the next wave of netbooks to be better quality, and probably even $100+ cheaper.

The last winners that I’d like to highlight are web developers. In order for Chome OS to work, the expectation is that every application that wants to play in this market will be entirely web based. We’re talking HTML5, CSS, and JavaScript. These technologies are plenty capable of providing customers with a rich experience like that of their desktop counterparts. The only exceptions I can see (for now at least) would be high-end software like video/photo editing, 3D modeling, or development software. I would expect the demand for web developers to increase significantly over the next decade as applications continue the shift to the web.

The Losers: Microsoft, PC Manufacturers

Microsoft should be very concerned about Chome OS. Google appears to be directly targeting Microsoft by severely under-cutting their price points by offering a free (or less-than free) alternative to Windows. I would expect many netbook users to choose Chrome OS over Windows 7 or XP for a low-powered netbook. There’s just no way that Windows will perform better on this type of machine. I’m not really sure what Microsoft’s next move will be. I could see them trying to spin Chrome OS as an unreasonable alternative by stating all of things things you “can’t do” such as editing photos/video or serious gaming. Consumers will need to be able to see through all the FUD and realize that netbooks are not designed for this type of computing anyway. I’m excited to see how things play out when Chome OS is released in a year.

I’m a bit hesitant to call PC Manufacturers “losers”. Part of me thinks that Chome OS will drive down the cost of these netbooks as they will require smaller hard drives and use the free Chome operating system. Since these companies will be able to sell netbooks for even cheaper than they are now, I would expect them to make even less profit than they are currently making. On the flip side, Google is working directly with some of these manufacturers to create a new generation of netbooks which could attract an entirely new audience. I would expect many more tech people to consider a netbook running a Google operating system compared to Windows XP. If Chome OS is a big hit, it will do wonders for the struggling PC manufacturers.

Finally, I just want to briefly mention Apple since they have been completely left out of this post so far. I don’t expect Apple to be affected by Google’s new operating system. Google is targeting the netbook market and seems to be taking a direct shot at Microsoft. Apple will continue to sell high margin laptops and target power users and students like they have successfully done for years. It’s rumored that the new tablet will be running the iPhone OS and will be Apple’s way of targeting this “secondary computer” market.

If you would like to find out more about Chome OS, here’s a YouTube video of the Google Chrome Demo posted by Google.

Comments

Comment from Kyle Barnoff
Time November 22, 2009 at 5:39 pm

I think that Apple would not be unaffected by a shift in the market. They sell laptops too and although they have been successful in a down market, they also do not have a majority share of the market. I think that Apple will have to make some adjustments though… which I think they will do if they remain a dynamic company.

Comment from Dan
Time November 23, 2009 at 4:54 pm

“Chrome OS is a drastic change from the way we normally think of operating systems and personal computers.”

What about your iPhone? Is this really much different than a smartphone OS running on more ergonomically-correct hardware?

I’d also hesitate to give Google too much credit here. This idea has been the holy grail of technologists for a long time, first with Sun’s “The network is the computer” thin clients (80s), then Microsoft’s Hailstorm (90s). Google is at the right place at the right time, as hardware and Internet access have finally evolved enough to support this idea. Now, if they also figure out how to make a profit off this model, then they’ll really deserve some credit. :)

“Google is clearly a big winner here. They are giving away Chrome OS for free”

I’m not so sure. It kind of reminds me of the underwear gnomes at Sun who thought that giving the JVM away would somehow bolster their hardware business. I don’t see what Step 2 is. Does Google want to turn my whole OS into Limewire? I would probably pay $200 to avoid continuous ads on my PC over its lifetime.

“I’m a bit hesitant to call PC Manufacturers “losers”.”

Me too. They’d be losers if Google somehow convinced them to sell an OS-free netbook that had a clear price drop compared to those with an OS. Then they’d only have to compete with OS vendors.

As long as the manufacturers sit between Google and the consumer, they are free to play tricks with pricing and messaging. If they don’t provide the exact price that a person is paying to get an OS with a device (“the Windows tax”), it will be hard for consumers to determine if they are indeed getting a good deal when comparing Chrome OS Device A with XP Device B, each with slightly different hardware specs. They could cut the Chrome device price by just $50 and keep the difference for themselves.

Seems like they would have been better off investing in a hardware company for tens of millions instead of YouTube for one billion.

Comment from Jason Wagner
Time November 23, 2009 at 5:05 pm

As always, really good comments Dan! With regards to the iPhone comment, I think there are many more similarities between Chome OS and the iPhone than between Chome OS and say, a Windows XP desktop.

For example, you can’t download things from the web with the iPhone. You are primarily interacting with web applications and there’s a lot of data being stored in the cloud. However, there are some very distinct differences. For example, you can store GBs of mp3s, photos, and videos on your iPhone. All of these can be used while you’re in “Airplane Mode” with no connectivity. This type of thing will not be possible with Chome. (Unless of course, they do some interesting things with HTML5 offline storage, but i’m still not sure how they will persist this data over reboots..) Additionally, you have tons of gaming/entertainment apps for iPhone which can be used w/o an internet connection.

I think Chome OS might be the first REAL example of the “network is a computer” concept you mentioned. I don’t disagree that they are not the first to come up with this idea, but I think they are the first to really put it into action.

Thanks for sparking great discussion.

Comment from Erik
Time November 24, 2009 at 1:25 am

I’m not so sure Microsoft is the loser here either. After watching the event, several people asked “how do I install another browser,” “how can I write a native app,” or “how do I x” where “x” is something they are used to on Windows. People at the event (who I assume were tech savvy people) couldn’t wrap their minds around the idea that this was only a web browser, could only browse websites, and will never be anything more.

The concept behind Chrome OS is definitely awesome and something I can get behind, but from the looks of it, Google is going to have a tough time teaching people exactly what it is. Let alone convince people to buy it.

Comment from Jason Wagner
Time November 24, 2009 at 1:38 am

Yeah that’s a good point. I think Chome OS will at least appeal to the nerdy portion of the netbook market, although I’m not sure how big that portion is.

Write a comment

You need to login to post comments!

Twitter Tumblr Music Blog