New things resemble old things at first. Moreover, people interpret new things in terms of old things. Such it is with the new Google Chrome OS. Very little I’ve seen on it seems to understand it.
The main stream of commentary is comparisons to Windows and how this means that Google is in the OS business, and so on. This is also the stream that gets it the most wrong.
It’s just another Linux distribution, guys. It’s not like this is a new OS. It’s new packaging of existing software, with very little or even no new software. I have about ten smart friends who could do this in their sleep. Admittedly, a handful of those are actually working on the Chrome OS, so that somewhat weakens my comment. Nonetheless, you probably know someone who could do it, is doing it, or you’re one of the people who could do it.
Moreover, Chrome OS isn’t an OS in the way you think about it. Google isn’t going to provide any feature on Chrome OS that they aren’t going to provide on Windows, Mac OS, Ubuntu, Android, Windows Mobile, iPhone, Palm Pre, Blackberry, and so on.
Consider the differences between the business model of Microsoft and that of Google. Microsoft believes that it should be the only software company there is. Its actual historic mission statement says that its mission is to push its software everywhere. Its mission does not include “to the exclusion of everyone else,” it merely often acts that way. Google’s mission is to have you use its services that provide information.
To phrase this another way, Microsoft gets paid when you buy Windows or Office or an Xbox, etc. Their being paid does not require that you not run Mac OS, or Lotus, or PlayStation, but that helps. Google gets paid when you click on certain links. It doesn’t matter how you clicked on that link, all that matters is that you click. Google facilitates that clicking through its information business facilitated its software and services, but it’s those clicks that get them paid.
The key difference is this: Microsoft is helped by narrowing your choices, and Google is helped by broadening them. It doesn’t help Microsoft for you to do a mashup that includes their software as that means less Microsoft Everywhere, but it helps Google if you include a map in your mashup as there’s a chance a paid link will get clicked (no matter how small, the chance is zero if you don’t).
I don’t know whether it’s cause or effect but Microsoft really can’t stand to see someone else be successful. It’s a zero-ish sum company in product and outlook. Someone else’s success vaguely means that they’re doing something non-Microsoft. Google, in contrast, is helped by other people doing stuff, so long as they use Google’s services too.
If I shop for a new camera, for example, the odds are that Google will profit even if I buy it on eBay and pay for it with PayPal. Or if I buy it from B&H, Amazon, etc. So long as I am using Google to gather information, Google makes money.
Let me give another more pointed example. Suppose you want to get a new smartphone. Apple wins only if I get an iPhone. RIM wins when I get a BlackBerry. Palm wins if I get a Pre or a Treo. Nokia wins a little if I get any Symbian phone (most of which are Nokias, but a few aren’t). Microsoft wins if I get any Windows Mobile phone, of which there are many. But Google wins not only if I get an Android phone, but also if I get an iPhone (because the built-in Maps application uses Google), or if I install Google Maps on anything. One could even argue that it wins more if I get a non-Android phone and use their apps, because the margins are higher on the income.
This openness as a business model is why Microsoft created Bing. Partially it is because Microsoft can’t stand to see Google be successful, but also because Microsoft envies the way Google can win even when it loses, and who wouldn’t?
Interestingly, Bing is pretty good, too. One can complain, but one can always complain. Credible people give higher marks to Bing than Google, even. This puts Microsoft in the interesting position of being where Apple traditionally is with them. They’re going to learn that you can’t take customers from someone else just by being better.
But this is the whole reason for Chrome OS. Chrome OS isn’t going to make any money for Google. But it does let Google shoot at Microsoft where they live. When (not if, when) Chrome OS is an option on netbooks, it will cost Microsoft. Either directly, because someone picks Chrome OS over Windows, or indirectly because Microsoft is going to have to compete with free. The netbook manufacturers are going to be only too happy to use Chrome as a club against Microsoft to get better pricing on Windows. The winners on that are not going to be Google, it’s going to be the people who make and buy netbooks, especially the ones who get Windows. The existence of Chrome OS will save money for the people who buy Windows.
That’s gotta hurt, if you’re Microsoft.
This is the way to look at Chrome OS. It’s Google’s statement that if Microsoft treads into Google’s yard, Google will tread back, and will do so in a way that does not so much help Google, but hurts Microsoft. It is a counterattack against Microsoft’s core business model that is also a judo move; it uses the weight of Microsoft against it. As Microsoft moves to compete against Google’s services by making a cloud version of Office, Google moves to cut at the base. When (not if) there are customers who use Microsoft apps on Google’s OS, Microsoft is cut twice by the very forces that make Google win when you use a Google service on Windows.
(Also, if you’re Microsoft you could argue that Google has been stepping on their toes with Google Docs, GMail, etc.)
Someday someone’s going to give Ballmer an aneurysm, and it might be Chrome.