The conventional wisdom has it that Microsoft should be afraid – very afraid – of Google's Chrome OS. After all, how can the high-priced Windows compete against a free operating system released by what has arguably become the most successful technology company on the planet?
The conventional wisdom is wrong, though. The development of Chrome OS could be the worst mistake Google has ever made and one of the best things to happen to Microsoft in a long time.
To understand why, we need to first take a look at the problems Microsoft has had with Windows. Chief among Windows' woes are hardware problems. Unlike Apple's Mac OS, Windows isn't tied directly to hardware. Windows has to work with countless computers, CPUs, graphics cards and other components that make up the core of a computer – you name it, and Windows has to work with it.
It is an impossible task and it is inevitable that Windows will choke at times. When you write an operating system that's not directly tied to hardware, those problems are par for the course. And your company takes a PR hit for it.
This is something Google has never faced. So it will have to gear up a development team not just for the operating system itself, but for writing drivers and handling hardware. It will have to hire more tech support staff and build a bigger support organisation. Even worse, when things go wrong on Chrome-powered PCs, people will blame Google, even if the Chrome OS isn't at fault. So Google's stellar image may become significantly damaged – which translates into lost revenue.
If there were enough financial benefits to be gained from the launch of Chrome OS, though, all that would be worth the pain. But that's where Google has stumbled. There is no clear business plan for Chrome OS. Giving away an operating system in the hope of big returns appears to be a replay of the strategy that held sway at the height of the internet bubble. We all know how that turned out. With Chrome, Google seems to be suffering from a similar delusion and it can expect the same results.
Of course, a company that gave away a really decent operating system for free would stand to gain a lot of exposure and could expect more people to use its other services. For a lot of companies, that sort of thing could increase revenue enough to offset development and technical support costs.
But we're talking about Google. Who uses a computer and doesn't know about Google? The word "Google" became a verb years ago, with the brand having become so ubiquitous that even TV news maps bear the logo. Google already has as much name recognition as it needs, with as much market share as any non-monopoly can expect. Chrome won't increase those in any significant way.
So, just what will the Chrome OS do? It could tarnish the Google brand and eat up precious company resources on a project with no clear benefit. As such, the company will be less able to launch new projects with potentially larger payoffs.
So, why is Chrome OS good for Microsoft? If Google is distracted by developing a new operating system, handling tech support and dealing with the inevitable public relations fallout it will face from unhappy users, the company won't be able to grow its business in other areas. And it will be much harder for Google to combat Microsoft, which has finally found its feet online with the launch of the search engine Bing, and the planned move to web-enabled Microsoft Office. Bing may take market share away from Google's core search business, and Office may fend off Google Apps, while Google is distracted by Chrome. So, Chrome OS may end up not being a shiny, bright thing after all – it may be nothing more than a lead sinker.