Windows vs Chrome: Prospects for the Future

on May 28, 2014

A year or so ago, clients first started asking me what I thought of the prospects for Chrome OS. What I told them was this: if you want to know about Chrome’s chances, then find out what Microsoft is up to. After all, it was Microsoft’s missteps that gave Google’s cloud-centric PC platform the gaping hole in the desktop market to drive through. And it is the software giant that has the power to mute Chrome’s outlook by righting the badly listing Windows ship.

Clients still ask the question today. I still answer the same way, though the range of possible outcomes is better for Chrome than it was last year — and worse for Windows. A healthy Windows would still pinch the spread, but it could no longer eradicate Google’s upstart OS like it could in 2012.

In a year, I might still be giving the same answer. But the clock is ticking. At some point, Chrome will have secured enough critical mass to be a viable force on the desktop no matter what Microsoft does.

When Google introduced the first Chromebooks three years ago, the devices were seen as a head scratching curiosity. Why was Google trying to launch a new OS when it already had a wildly popular mobile operating system in Android? Besides, Microsoft was well entrenched on the desktop with Windows 7, which was about as solid a platform as anyone could ever ask for — from Microsoft at least.

Chrome began modestly, with a pair of OEM partners in Samsung and Acer. They each sold a few units, but mostly to tire kickers in the government and enterprise IT segments.

Modest though its beginnings were, there wasn’t any substantive improvement for Chrome’s fortunes in 2012. Google hadn’t managed to expand its partner base beyond the charter pair. Sales remained anemic.

The Chrome environment may not have changed much that year. But the Windows ecosystem did. That summer, Microsoft’s hardware partners were shocked to learn the software giant was planning to come out with its own Windows 8 systems marketed under the Surface brand. Though few said so publicly, many OEMs were dismayed by the revelation.

Microsoft didn’t manage to sell many of the original Surface devices, but that didn’t soften the OEMs’ jaundiced view – in no small part because their Windows 8 hardware didn’t sell well either. I won’t belabor the many shortcomings of Microsoft’s brain dead OS here. (Although it is a favorite pastime of mine. Anyone who’s jonesing for a diatribe might want to detour HERE ). What I will say is the OEMs could see Microsoft was moving far too slowly to fix Windows 8 and they needed to sell systems.

By this time last year, the PC makers had grown desperate for an alternative. Aside from a few Windows/Android dual-boot schemes, there wasn’t another horse to saddle up beside Chrome. So, many of them decided to develop Chromebooks and get behind them.

Dell, HP, Lenovo and Toshiba, which sat on the sidelines before the Windows 8 launch, introduced and heavily marketed Chromebooks in 2013 and into this year. Shipments blossomed in 2013 from a pittance in 2012 to more than 2 million units.

The vast majority of those systems were sold within two segments and in one region: in education and at low end retail price points in North America. But they did well in those two segments. Chrome, which barely registered in education in 2012, snagged nearly 20 percent of the PCs sold into K-12 education in the third quarter of 2013, according to a study from FutureSource Consulting. And in US retail, Chromebooks were as much as one fourth of all PCs sold in December, according to NPD.

Indeed, Chrome is in far better shape than it was a year ago. Earlier this year in fact, Google reportedly decided it no longer needed to subsidize Chromebook development and marketing. (Interestingly, Microsoft began incentives at about the same time for OEMs building Windows 8.1 systems addressing the price points Chromebooks targeted in retail.)

Cisco announced it has ported its pervasive Webex videoconferencing app to Chrome, a sign momentum continues to grow. In the Windows camp, Mozilla revealed it is scrapping the Modern UI version of its Firefox browser, saying only about 1,000 people were relying on it.

Chrome still has a long way to go before it could hope to take on Windows globally. Aside from two segments in one geography, the world is oblivious to the upstart platform. Despite all the turmoil, a compelling version of Windows would be a devastating counterpunch. Today. Or in a few months. Maybe even in a year.

At some point, though, it won’t matter what Microsoft does. When that happens, Google is clearly ready. Even if Microsoft isn’t. Especially if Microsoft isn’t.