Bill Jamieson: Can Google topple Microsoft with its new operating system?

Published on Wednesday 8 July 2009 10:56

IN A dramatic move that could transform the world home computer market, internet giant Google is launching an assault on the dominant Windows operating system run by Microsoft.

Google, which already provides e-mail, Web and other software products that compete with Microsoft, is launching a new operating system for computers that will tackle Microsoft's dominance head-on. Its new products will range from currently fashionable ultra-compact netbooks to full-size desktop PCs.

Microsoft is currently installed in 90 per cent of the world's personal computers and its position has has looked unassailable.

The new software, to be marketed as the Google Chrome Operating System, will be in netbooks for consumers in the second half of next year. The company said it is already working with multiple manufacturers.

Google claims its new operating system will be fast and lightweight, enabling users to access the Web in a few seconds. And it is set to take advantage of the swing to compact netbooks that have proved a computer best-seller over the past year.

The two US companies have been battling for years in a variety of markets, from Internet search to mobile software.

Whether Google will be able to make a dent in Microsoft's huge market share will depend on whether it can lock in partnerships with PC makers such as Hewlett-Packard and Dell, which currently offer Windows on most of their product lines.

At present the Chrome Internet browser, launched late last year, trails a faraway fourth in the Web browser market. It currently has a market share of just 1.2 per cent, according to market research firm Net Applications. Microsoft's Internet Explorer continues to dominate, with nearly 70 per cent.

Says Rob Enderle, principal analyst at Enderle Group, "It's been part of their culture to go after and remove Microsoft as a major holder of technology, and this is part of their strategy to do it.

"This could be very disruptive. If they can execute, Microsoft is vulnerable to an attack like this, and they know it."

There was no immediate comment from Microsoft this morning on the Google announcement which came late last night.

Charlene Li, partner at consulting company Altimeter Group, said Google's new system will initially appeal to consumers looking for a netbook-like device for Web surfing, rather than people who use desktop PCs for gaming or high-powered applications. But eventually, the Google system has the potential to scale up to larger, more powerful PCs – especially if it proves to run faster than Windows, she said.

Enderle expects Google to charge at most a nominal fee for the new OS, or make it free, saying the company's business model has been to earn revenue off connecting applications or advertising.

Li added: "A benefit to the consumer is that the cost saving is passed on, not having to pay for an OS. It's clearly positioned as a shot across the bow of Microsoft."