Tuesday, July 7, 2009

Google lobs ChromeOS to Microsoft's Bing?

In recent days we have heard the announcement by Google to introduce their Chrome OS to take on Microsoft's stranglehold on the OS market. There have been many pundits all over the blogosphere who have sliced and diced this story to no end.

Here's my take on it. I don't for a second believe that google is doing this in response to Microsoft's Bing. Some of the blogosphere pundits are suggesting that since Microsoft seemed to get some traction with search, the best way Google could hit back was to announce Chrome OS.

Google has its own challenges. It has a gorilla size market share of the search and the associated ad market. Sooner or later it position there will be threatened either directly by some new startup or indirectly as it has been hit recently due to the economic downtown. Ad spend has been lowered by many companies as they try to recover from this economic storm. But, google's balance sheet is strong, with cash aplenty.

In a mobile ecosystem it is critical to ensure that speed, simplicity and security are addressed and that is what Chrome OS focuses on according to Sundar Pichai, their vice president of product management. Larry Augustin, a prominent Silicon Valley investor said that “Market changes happen at points of discontinuity” and I couldn't agree more.

What I see Google doing with Chrome OS and Android is that it realizes that "mobile has become the mode of first consumption for all information". To this end with the convergence of the mobile device headed to some middle ground between smartphones and netbooks, Google wants to have a greater play in that space. Can they still play with the Windows OS dominating in this space. Yes they can. Can Google's applications (cloud based) be threatened by Microsoft or others? Absolutely.

But the true question is, Do they see an opportunity to grab a chunk of this converging opportunity that is still nascent so that they can play a greater role in guiding the market? Yes, they do. Therefore, In my view, Google is not entering the OS market just to go head to head with Microsoft. They are entering this market for they see a convergence toward mobility which they can leverage better than anyone else right now. Like I said earlier, "mobile has become the mode of first consumption" and if companies are not headed there, then they are headed to oblivion.

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