Chromebooks. Should Microsoft be concerned?

Google, a nearly impenetrable force in the search market, is also starting to make waves (no, not that wave) in the operating system market as well. No-one can reasonably say that Google has crafted the perfect laptop/desktop OS, but it is hard to overlook the fact that the platform has been gaining steam over the past few months.

Chrome OS is Google's lightweight operating system that attempts to make the browser the life of the device. In short, nearly everything you do with Chrome OS is heavily dependent on having an Internet connection and as long as you meet that simple requirement, Chrome OS delivers nearly everything you need via its browser.

Chrome OS comes on a variety of products from Acer, Samsung, Lenovo and in the near future, HP. The devices are called a Chromebook (laptops) or Chromebox (desktop) and come with exceptionally low price tags, starting at $199. The innards of these devices are usually quite light and are by no means intended for power users. In fact, Google has moved nearly everything to the cloud for these devices including local storage. (If you want to learn more about Chrome OS, you can read about the platform here.)

Seeing that more and more vendors are picking up Chrome OS as an alternative option for consumers, should Microsoft start to feel a bit concerned?

It is easy to write-off Chrome OS as a platform with limited capabilities, and to argue that it won’t work for the Enterprise (yet), but Microsoft should still be paying attention to this market as they have been unsettled in quite a few areas recently after failing to properly adapt (Windows Mobile, tablets).

Here’s the deal, Google is clearly making a clever pitch to OEMs to get them to start building extremely low-cost machines that appease consumers as they are in similar forms to Ultrabooks and yet cost a fraction of the price. To the simple consumer, these devices are exceptionally attractive as long as they fit a few requirements.

What are the requirements? If you need a laptop for checking email, browsing the web, and a simple word processor, Chrome OS fills all of those needs and does it at a palatable price point.

What we have is Google trying to undercut the market with a low-priced product, much like the failed netbook craze from a few years back. But, if Google’s Chrome OS is able to fill the gaps where netbooks failed (mainly, netbooks trying to be considered full-class notebooks, when they lacked the horsepower) and are properly marketed to consumers, Google could make a strong play.

So, should Microsoft be concerned about Google’s Chrome OS? Put it this way, if they don’t wise up and start fending off the competition early on, they will once again find themselves playing catch-up. Let us not forget too that Microsoft failed miserably at hedging out the iPhone, with Ballmer saying “there's no chance that the iPhone is going to get any significant market share”. Granted, that quote was when the iPhone was selling for $500 with a two-year contract.

Even though notebooks and desktops are currently Microsoft’s domain, if they fail to act now, they could yet again find themselves struggling to regain lost market share in the near future.

So, before you write off Chrome OS as another Google flop, think about what consumers will need for casual computing in the next few years. If you think Chrome OS might fit that bill, you will begin to see why Microsoft needs to wise up to Google’s play in the low cost market.

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