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Summary:

Last week Google showed off its progress on Chrome OS, introducing an apps store in support of it and offering a pre-release hardware trial program. But making Chrome OS what CEO Eric Schmidt calls a “viable third choice” in operating systems looks doomed.

Chrome OS desktop

Last week, Google showed off its progress on Chrome OS, introduced an apps store in support of it, and offered up a pre-release hardware trial program (real machines won’t ship until mid-2011). But it’s likely all for naught. Google CEO Eric Schmidt’s objective of making Chrome OS a “viable third choice” in operating systems looks doomed.

Limited Functionality, Limited Appeal

Right now, the hot trends in technology are social, real-time, mobile and cloud computing. Chrome OS is only optimized for one of them; its machines are true cloud clients. There’s nothing in Chrome OS or its user interface that accommodates social media or real-time information feeds. Schmidt even evoked the old Network Computer vision. Chrome OS computers will be highly dependent on the cloud for applications and minimally functional when disconnected. They’ll have cellular modems, but it’s not clear that existing networks can handle the network traffic demands of a cloud-centric client.

Problematic Positioning

Chrome OS also suffers from awkward positioning: both externally, to developers and potential customers, and internally within Google’s own product line-up. While it’s true that PCs serve both companies and consumers, the value of the Network Computer premise appeals only to enterprise IT managers. Its manageability and simplified functionality play best in applications like airline reservations, point-of-sale terminals and ATMs, or in limited-application mobile devices used in shipping and store inventory management. Yet at least for now, app stores are purely consumer offerings. The apps Google showed last week came from media companies (New York Times, NPR, Sports Illustrated), Electronic Arts, and Amazon.

Where Are Google’s Real Opportunities?

Meanwhile, Google itself says Android will be its primary tablet operating system. In fact, Google aims Android at most of the best opportunities to establish new or alternative operating systems. I’d argue that there are three product categories where Google could try to establish a new OS platform, either with Android or Chrome OS. I discuss these in more detail in my weekly update at GigaOM Pro.

Related Content From GigaOM Pro (subscription required)

  1. HOW ABOUT SOME DISCLOSURE IN ALL CAPS, MR. CARD?

    DO YOU OWN APPLE OR MICROSOFT STOCK?

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  2. I have a few problems with the claims in this post which exemplify exactly why Chrome OS *has* the potential to succeed.
    1. They aren’t looking to be “third choice” indefinitely. In fact (as has been widely reported), the PM of the Chrome OS team said “I think we will have failed if this doesn’t become your default way of computing.”
    2. Social lives on the Internet. It is actually unique in that it’s one of the first core trends (unlike the previous focus on office software that computing trends used to be directed towards) that *does* live on the cloud.
    3. The cloud, and thus Chrome OS, is built for real-time; just look at the real-time propagation of settings to every Chrome browser for a representative example.
    4. We aren’t even to the beta stage with this yet, and I’m not saying that to back something up with speculations about how the OS will improve. By the time full-fledged consumer products are out, 4G will abound and connectivity issues will be rare to non-existent in any of the cities with such capabilities. And for the day-to-day, mundane tasks? When you desperately need Docs to sync to the cloud constantly, you won’t even need to be on a fast network; the data pushed from such a task is very small.
    5. Wait, why is it not optimized for mobile? These notebooks are tiny and very light and have SSD’s so you can drop them, something you don’t normally do unless you’re one the move.
    6. Let’s disregard all the people who already have a Cr-48 and repeatedly say “this is going to make me leave my [macbook, other primary laptop] at home a lot more”. Let’s even say I’m a special case of a geeky consumer who isn’t representative of a general population that is unwilling to live solely in the cloud (something I don’t agree with). I seem to remember a good portion of that conference was spend talking about all the enterprise partners they already have in this (DoD anyone?), and then one of the launch developers came on stage to say “hey, we’ve got a bunch of enterprise customers begging us to write a webapp for Chrome OS because they see the security benefits”. This company, Citrix, is perhaps one of the most exciting things about Chrome OS, because you can essentially run any traditionally-local software via an internal cloud where you have a network-hosted version of the software and everyone interacts with it via their browser. There is huge potential for this in the enterprise, and really shows just how well-tailored Chrome OS is for this audience.
    7. Just because they are going to use a product that is much more mature than Chrome OS for tablets in the short-term, it still doesn’t mean this is their long-term vision.
    In short, I find it very difficult to say that Chrome OS has no opportunity to succeed. On the other hand, I wouldn’t say it’s guaranteed success either, but it definitely has huge potential.

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  3. Can you honestly say that ChromeOS fails at the “social” angle?

    Most folks using facebook/etc are still using the browser… considering the Cr-48 has a webcam and microphone and mobile data, it seems like an ideal web-based social client… arguably better so than most other laptops.

    If ARM-based netbooks running linux failed to hamstring WinTel, perhaps ChromeOS will. It seems like almost the perfect netbook OS. Acer/Asustek are probably drooling at the opportunity to add value here. Apple is likely keeping a close eye on this development’s success or failure for their Mac product line. Microsoft (possibly Intel) should be very scared.

    Disclaimer: I own Apple stock.

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  4. Spoken like a true card.

    Chrome OS is probably the most interesting development in the technology landscape since Apple’s iPhone. The web, without the anachronisms, without the archaic ways of treating data as separate from tasks and intent.

    Indeed, I’d rather see Chrome OS move into the mobile space, with pure browser APIs to access functionality, rather than see Android become more the norm. Android was never fleshed out as a vision, as a way of working with a mobile device. Chrome OS on the other hand has already declared managing software installs dead, managing backups dead, managing user profiles dead.

    There is more here than your shallow analysis can even being to capture. Hints are pointed to by Citrix’s work with Chrome OS, and the yet to be revealed nature of “chromoting”. Entire IT staff budgets are on the brink of being slashed by a centralized, scalable, fault-tolerant cloud solution.

    I’m not exactly sure why I read GigaOM anymore. The insight has washed out, and sensationalism seems to rule the day.

    Also: you may need to schedule a meeting with your typographer.

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  5. I am more bullish on the potential for Android than I am for Chrome OS, even though Chrome OS is the more “futuristic” platform. Google itself leads with Android in some of the market segments that appear most promising in terms of establishing a new platform:
    - mobile phones
    - tablets
    - Internet-integrated TVs

    While social lives on the Internet, it seems like it’s up to Chrome OS app developers to deliver social experiences. Ditto real-time feeds and user interfaces.

    Chrome OS is ahead of the curve in cloud-based computing, and could establish itself with developers as such. I’m quoting CEO Eric Schmidt on the “viable third choice” angle, and he’s the one that mentioned the old Network Computer concept. Citrix will help with enterprise IT, but those folks are a pretty conservative lot.

    I don’t own any Microsoft, Apple, or Google stock directly (outside of mutual funds).

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  6. To estimate the success of a cloud based OS like Chrome, observe your own computing behavior. When you fire up the laptop, how much time is spent in the Browser? At least 50% of the time? For a casual user (someone not directly in the tech industry), it’s probably close to 75% of the time.

    So to your points:
    1) Limited functionality is subjective to the functions demanded by the user. It’s easy to argue that ChromeOS will be able to meet the computing needs of your parents. Also, limited functionality translate to a much lower price. If we can find netbooks with Windows for $199, how much will a laptop with the Open Source ChromeOS cost?

    2) ChromeOS is not for corporations, it’s a consumer oriented product. It will most likely be targeted towards very casual users that simply need a sub-200 dollar laptop.

    3) The real opportunity is a laptop in every single hand in all parts of the world. Imagine the fabled $99 laptop. At that price, you’ll easily find it in the hands of every student K-12 in the US and in Asia’s young population of 2 billion hungry for technology and education. With that kind of user base on Chrome, Google can dominate the next universal platform: your browser. That’s the “real” opportunity.

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  7. Uh… I’m no analyst, but it is abundantly clear to me that Chrome OS is one more tool in the arsenal Google intends to use to capture different target markets. Android is their inroad into mobile, Chrome OS to the PC market, with various web properties supporting both. As such, it fits the bill smartly.

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  8. All I can say is this – I bought a brand new Win 7 Lenovo Laptop last year. My estimate is that more than 98% of the time I spend on this laptop is spent in the Chrome web browser. The other 2% of the time has been spent in a combination of Microsoft Word, Excel and photo viewing software. The time spent in Word and Excel was only because people sent attachments in those formats. That is all.

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  9. I’d be more excited about Chrome OS as a one laptop per child platform if the third-world Internet and WiFi connectivity was available, cheap or subsidized.

    And here’s some more discussion, prompted by an ex-Googler’s prediction that Chrome OS will be killed or merged with Android:

    http://friendfeed.com/paul/1af77944/prediction-chromeos-will-be-killed-next-year-or

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    1. Hi David,

      I’m actually very excited about Chrome OS’s role in the developing world, especially in Asia. In China and Vietnam (and likely all other countries in the region), free wifi is ubiquitous. 3G is available almost country wide, even in rural areas and costs about $4-5 a month.

      We’re not just talking about the poorest of the poor, but the billions in Asia that’s rising into the middle class. A quick global demographic study shows a huge market for Google.

      As for Paul Buchheit’s comment, it is intuitive that the two platforms converge but it’s easy to argue that ChromeOS is the more robust platform, since the world uses the browser. It is inevitable that the browser will become the next generation’s desktop OS. If Google is able to achieve critical mass with Chrome, they can control development to close the gap between cloud and desktop OS much quicker.

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  10. Fandroids don’t get it. Fine, fine, fine — you love Google’s products and future intentions. But… A specifically web-only OS solves no problems. Fast boot, syncing, easy install, easy updates, etc… are ALL achievable with a traditional OS. ChromeOS’s sole purpose is to fuel a transition to web-only apps and that is all. This is great for Google, but consumers don’t care. This is not a consumer problem. The consumer doesn’t care if an app is web-only or a local install if it delivers on features. All that a web-only OS provides a consumer now (since every OS has the web) are the pain points of all that it lacks in comparison to the functionality of a twenty year old OS, never mind the new mobile OSes or hybrid traditional-web/social OSes like JoliCloud. Fandroids may love the notion of helping Google, they may claim that consumers WANT this. But they don’t. I don’t care about what’s good for Google; I care what is good for me.

    ChromeOS could be Android that doesn’t allow app installation, only has a browser, and it would already be 100x better.

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