Google rides Chrome OS onto Microsoft turf

New operating system moves Google further into Microsoft's longheld territory

With Google Inc. working on its upcoming browser-based Chrome operating system, the company is intensifying its rivalry with Microsoft Corp.

If Google's new OS , which is expected to be on the market in about a year, catches some momentum, it won't just propel the company into a new market, it also will give Google Apps a boost against Microsoft's ubiquitous Office software. It will also give Google one more avenue into the enterprise, which has always been Microsoft's lofty domain.

"This really is a fight to the death for Google and Microsoft," said Jim McGregor, an analyst with In-Stat. "It is a fight between business models for software, applications, advertising and the Internet. I think this battle will eventually benefit everyone because it is pushing the boundaries of technology and business."

Google announced today that it is releasing its Chrome OS project as open source, including the code base, user interface experiments and some initial designs for ongoing development.

"First, it's all about the Web," wrote Caesar Sengupta, a Google group product manager, and Matt Papakipos, an engineering director, in a blog post. "All apps are Web apps. The entire experience takes place within the browser and there are no conventional desktop applications. This means users do not have to deal with installing, managing and updating programs."

For Ezra Gottheil, an analyst with Technology Business Research, Inc., Chrome OS reflects the ascendancy of the Web and the browser. Both the buildup of the Web and the upcoming release of the new operating system will pool to give Google even more power and industry position than it has today, he said.

And that would only help the company in its ongoing battle with Microsoft.

The two companies have been locking horns this year over enterprise applications and their search engines. It's a war between the longtime software monolith and the new Internet-based giant on the block.

Now, Google appears to be setting its sights on taking a chunk out of Microsoft's operating system market share. With many users viewing their computers as simply a way to get on to the Internet, a browser-based OS could be a good step into that arena for Google.

"For most people most of the time, the PC is just a Web player," Gottheil added. "Google is leveraging its Web expertise to strip away a lot of the stuff that people don't use as much any more, and delivering an OS optimized for the Web... This makes business sense for Google. Getting in Microsoft's grill is just gravy."

Analysts also noted that users running the Chrome OS are likely to use Google Apps, such as Gmail, Google Calendar and Google Docs, along with it. That means pushing out the new OS could bolster sales of Google's office-based applications as the company drive into other Microsoft territory.

Dan Olds, an analyst with The Gabriel Consulting Group, said that while adopting Chrome OS will boost Google Apps, the reverse is true as well. Anyone who was considering a move to Google Apps might give the Chrome OS a try. He called it a good one-two punch.

While Google is trying to make inroads against Microsoft's longheld suite of office applications, it's clear that a successful move would be an uphill climb.

Gottheil, however, said Google has the financial resources, industry partners and name recognition to push Chrome OS into a head-to-head fight with Windows.

"It's 100% that [Chrome OS] will make some dent. The question is, how much?" Gottheil said. "I can't quantify it, but I'd guess many of the people who have come to computing more recently, and only for e-mail and IM and seeing the grandkids' pictures, and maybe participating in social networking, they'd use it. And I think there's a class of enterprise users that can be effectively served with Web-only devices. It's not for power users, but for many other users it makes sense."

Rob Enderle, an analyst with the Enderle Group, noted that how much of the Chrome OS -- which he calls a rethinking of the thin client -- is adopted largely depends on which companies Google is able to partner with. He added that partnerships with Hewlett-Packard Co. and IBM could help push the new operating system into the enterprise.

"This will be a long-term trench warfare type of battle," Olds said. "The war between Microsoft and Google will play out over the next several years. We won't see an absolute winner or loser, but more trench warfare, with each gaining temporary advantages. Users will get the advantage as both companies will be very careful to make sure that their products don't break compatibility and that costs will remain low."

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