This week Google confirmed a long running rumor that they were working on their own operating system when they announced their ChromeOS. Most of the resulting commentary I’ve seen have missed the mark. A lot of tech journalists and bloggers focused on the Google / Microsoft rivalry. Dave Weiner found that predictable narrative to be a boring one, and dismissed it for the same reason the journalists seemed to find it interesting, because it was yet another fight between two big tech companies. Ultimately ChromeOS didn’t interest him because the Chrome browser didn’t support his favorite browser extension, a bookmark synchronization tool, and because, being Linux based, it wouldn’t run Frontier, the desktop software he wrote that he uses to develop and run most of his websites. On Slate, Farad Manjoo criticized the move with an article titled “Five Reasons Google’s new Chrome OS is a Bad Idea.”
Here is the thing, and it is really simple, Chrome and ChromeOS don’t need to become popular for them to do well by Google, they just have to have influence.
It works like this. Google benefits when more people use the web more often for more activities. They benefit primarily from increased opportunities for advertising revenue, but also they are getting paid for Google Apps.
More people will use the web more often for more activities as:
- Web applications offer more and more utility and usability
- Devices that can access the web become more affordable
- Internet connectivity becomes cheaper and more widespread
I don’t think ChromeOS helps with internet connectivity, unless it includes easy to use mesh networking, and even then, its not going to make that big a difference, but the effort helps with the other two.
Chrome the OS both helps make web applications more useful. It has the potential to create an environment where web applications work better with each other, and also with local applications and files. By doing so Chrome OS also puts pressure on other OS vendors (ie Apple and Microsoft) to do a better job of supporting web applications as well.
It also gives them away to influence the cost of client operating systems, and, by extension, desktop, notebook and netbook computers. Linux may ultimately be an unpopular choice on netbooks, but its presence helped put pressure on Microsoft to keep selling XP and make it available for netbooks at a lower cost.
It would be a mistake to look at this through the cost issue through lens of the US or Western Europe. This really an issue in the developing markets where computer penetration among “consumers” and small businesses is still quite low. In those circumstances fewer people think they need to run Office or Photoshop, etc so compatibility with desktop applications isn’t as important as it is to tech journalists and bloggers. These markets represent a huge opportunity for Google’s advertising and also Google Apps. When computer penetration is low, even pushing the price down $20 could lead to a big bump in the number using computers, and that will help drive economies of scale that help make the hardware even cheaper, and network effects that increase the relative value of having a computer.
That all this might hurt Microsoft by putting pressure on their prices and revenues is kind of a bonus.