Online Operating Systems Are the Key
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Chrome OS
Microsoft needs to focus its attention, first and foremost, on the online
operating system space. Google announced Chrome OS recently in a bid to compete
with Microsoft Windows in netbooks. But anyone who believes Google will stop
there is kidding himself. Google will continue its push in the operating system
market, doing its best to attract users on any computer. Google doesn't just
want to get into the OS market, it believes that the future of that space is on
the Web and it wants gain control of that space before Microsoft can
effectively counter this move.
Microsoft seems to understand that. It also announced Gazelle,
which, at this point, is a model for developing a browser-based operating
system that can manage system resources. That sounds more powerful than
Chrome. But will it come to fruition? At this point, it's anyone's guess. But
it's hard to believe that Microsoft would allow Google's domination to continue
unabated as it delivers an online OS.
Office
Another core of Microsoft's business is Microsoft Office. It appeals to
both the consumer and the enterprise. It's also one of the top revenue drivers
for Microsoft. Realizing that, Microsoft should be concerned that Google and a
smaller company, Zoho, are attracting customers who don't have a real need for
Office. They can simply go online, type up a simple document, create a basic
spreadsheet or develop a simple presentation in no time. It's convenient. And
as long as Google follows through with its promise to make Google Docs easily
accessible through Chrome OS, it could spell trouble for Microsoft. Synergy, which
worked in Microsoft's favor, is now working against it.
And that's precisely why Microsoft needs to focus its online efforts on
software. Although search has helped Google stay dominant online and Microsoft
has a new search engine, Bing, search is not Microsoft's core business-software
is. As long as Microsoft allows Google to take the lead online, it will have an
even more difficult time catching up. That could mean a severe drop in revenue
and profitability.
It should be noted that that impact is many years down the road. For the
foreseeable future, Microsoft will still hold the high ground, thanks to the
enterprise need for on-premises software to handle powerful applications. But
today is the beginning of a new OS war on a new frontier. Google is laying the
groundwork for what could become a real Windows challenger. If Microsoft
doesn't respond now, it could find itself clinging to Windows on the desktop as
both consumers and the enterprise move online.
So, while search is a concern in the short term, Microsoft needs to look at its
core business. It needs to block Google. And it needs to ensure that its
ability to control software won't be put into jeopardy by focusing too much of
its attention on Bing.
