The OS Battle Moves into the Cloud

10 Reasons Why Microsoft Should Fear Chrome OS

As the world prepares for the release of Google's Chrome OS, a Web-based operating system that Google announced earlier in 2009 and that is expected to be previewed Nov. 19, it's important for everyone to consider the implications of the release. For the first time in quite a while, a major company is jumping into the operating system space to compete with Microsoft and Apple. It will be an important launch that could have a real and meaningful impact on the market.

Apple won't need to worry about the release of Chrome OS nearly as much as Microsoft will. Apple is a hardware company. Mac OS X holds a relatively small percentage of market share in the software space and it isn't competing against Windows-based netbooks. But Microsoft does need to worry about Google and its Chrome operating system. Microsoft is competing heavily in the netbook market, on which Chrome OS has its sights firmly set. Moreover, it has online services of its own, in Azure and Office Online, that underscore its desire to move to the Web. Simply put, there is a lot at stake for Microsoft when Chrome OS is released. And it needs to act quickly to stymie Chrome OS' growth.

Until then, Microsoft should fear Chrome OS. Here's why:

1. Google keeps growing

Like it or not, Google is growing at a rapid rate. The company still dominates search. Its online tools, like Google Docs, are quickly becoming viable alternatives to Microsoft's software. Even its Android mobile platform is doing a fine job of offering something a little different, yet appealing. With the help of Chrome OS, Google is adding another weapon to its arsenal. And for Microsoft, that could be scary.

2. Google understands software

Although Google has focused on the online world, the company has proven time and again that it understands what consumers really want from software. A quick evaluation of Google Docs, its Chrome browser and Android prove that point quite well. Realizing that, there's no reason to suggest that Chrome OS won't provide a viable experience. After all, if Google has already done well developing software, why should anyone doubt its ability to create a viable operating system?

3. An online ruler

At the same time, Microsoft should be extremely fearful of Google's position online. By being the first major company to develop a viable online operating system for netbooks, Google is once again solidifying its position on the Web. In the meantime, Microsoft, which just released Windows 7 to much fanfare, is focusing its efforts on desktop software. The longer Google commands the Web, the harder it will be for Microsoft to break through its barriers.

4. Windows isn't stellar

Windows is still widely considered a less-than-stellar operating system. Sure, Windows 7 is better than Windows Vista, but the OS still suffers from security problems, quirks and a level of usability that some users don't find appealing enough. Now more than ever, Google has a real shot at changing the operating system landscape. And it's partly Microsoft's fault.

The OS Battle Moves into the Cloud

5. Microsoft needs more online assets

Although Microsoft has made its intention of bringing software to the Web known with Office and Windows Azure, a Chrome OS competitor, the company has so far done little to compete with Google online. Bing is undoubtedly a fine first step, but the software giant needs to do more if it wants to cut off Chrome's growth. That means Microsoft will need to quickly shift its focus online.

6. Netbooks are a key battleground

Chrome OS is designed specifically for netbooks. It's a smart move. Google realizes that Chrome OS won't provide much value to those using desktops or notebooks. It also understands that its operating system can't beat Windows in terms of power, application availability or enterprise viability. But when it comes to netbooks, Chrome OS is a viable solution. It does have the features users would want. And it will be able to compete against Microsoft's Windows 7 Starter Edition.

7. Netbooks are just the start

All that doesn't mean that Google will stick with netbooks interminably. We can probably expect the company to bring Chrome OS to desktops and notebooks over the next few years. That could cause some trouble for Microsoft. It has spent considerable cash and time trying to own the netbook market, but the desktop space is where it has easily reigned supreme for years. If Google delivers a viable alternative, complete with features that rival Windows, Microsoft will be forced to face off against a company with just as much power, cash and drive as itself. That's a battle that Microsoft won't want to wage.

8. What about the vendors?

Vendors can't be forgotten as we determine the impact Chrome OS could have on the software space. For years, companies like Dell, Hewlett-Packard and Acer have been searching for alternatives to Windows. For its part, Dell offers Ubuntu as a replacement for Windows. That decision was born out of the company's (and consumer) distaste for Vista. At the same time, vendors have been at the mercy of Windows for too long. They're chomping at the bit to have at least one company that can attract consumer attention and take Windows on. Google might just be that company.

9. The future is in the cloud

One of Microsoft's biggest fears should be losing the battle for the cloud before it even properly starts. Without a swift and forceful response to Chrome OS, it's doubtful that Microsoft can regain lost online OS market share from Google. Unfortunately for Microsoft, the future is decidedly in the cloud. More and more companies and consumers are moving there. And all the while, it's Google that's waiting for them. Chrome OS is just Step 1. If Microsoft wants to capture the cloud, it needs to move quickly.

10. Bing, ads and all the rest

Online, Microsoft just doesn't have it. The company is admittedly making strides in the search engine space, but Bing is still woefully behind the competition. The same can be said for Microsoft's advertising platform (another key online battleground), e-mail and Webmaster tools. The company might be making progress, but it's far behind. And the longer it takes for Microsoft to respond to Chrome OS, the greater the chance that it will allow Google to dominate the online OS market just as it dominates search.