Google Chrome OS World — Winners & Losers in the Paradigm Shift

I have been avidly reading about the details of Google’s Chrome operating system. Initially, I was disappointed. In its early stages it appears that the Chrome OS will be simply a boot up to the Google Chrome browser (youtube video). After reading some commentary, including Ben Parr’s post on Mashable entitled “With Chrome OS, Google Intends to Destroy the Desktop and Microsoft,” I reconsidered my initial opinion. Google’s web-centric philosophy and the Chrome OS has the potential to be shift the computing paradigm. If you want to read the basics of the Chrome OS, there are over 1,045 news articles published in the last 24 hours.  I intend to head in a different direction than most of the mainstream articles. After a brief introduction to Google’s Chrome OS, I will discuss the winners and losers if Chrome OS achieves widespread acceptance. Other musings appear in this post.

Brief Introduction

Chrome OS will initially be an alternate OS for netbook computers.  It will boot up fast, load the Google Chrome browser and do nothing more.  You will not have the ability to install additional software.  This benefits Google because, as Parr points out, Google reaps profits from people spending more time online.  Chrome OS promotes an entirely “webcentric” computing experience.  Gmail, Google Calendar, Google Wave, Google Docs, etc. will be the replacements for programs like Microsoft’s Office suite. Furthermore, most information will be stored online in the cloud.  If this shift occurs and Chrome OS eventually finds its way from netbooks to computers, I predict the following classes of winners and losers.

Industry Winners

1. Google wins and wins big.  Google has the best map for the web in its search engine and some of the very best webcentric applications.  Figuratively speaking, Google owns the web.

2. Companies that provide access to the web or own the underlying infrastructure.  Although competition will increase, the dominant players should benefit.

3. Sites that generate views and retain interest (“sticky” sites).  Facebook is a prime example.  Recently valued at around $9.5 billion, Facebook draws more people into the web and it probably among the stickiest of websites.  Companies like Facebook benefit in the same fashion as Google, through advertising revenue.

4. Content providers capable of producing sticky content.  Talented writers, reporters and bloggers serve to benefit by either publishing their own content or selling their services to sites.

5. Programmers who produce webcentric applications.

6.  Some low-end device manufacturers.  As more people shift to cloud computing and the Chrome OS, computers that are somewhat underpowered by today’s standards will be in demand.  Many computers will basically be “dumb terminals” merely capable of launching a browser, displaying pictures and streaming media.

Industry Losers

1.  Microsoft.  Microsoft lives and dies by the sales of software in boxes.  Remember, in Chrome OS, software cannot be installed.  Microsoft has very few webcentric properties and applications.  Nobody “Bings.”  The only somewhat serious webcentric utility Microsoft has is Hotmail/Live Mail which lags far behind Gmail in features.

2. Companies that piggyback on Microsoft sales.  Good examples are companies that write anti-virus software for Windows.

3.  Almost any software company that sells discs in boxes.  These companies will need to reprogram their applications to be entirely web-based or face extinction.

4.  Eventually high-end device mass manufacturers.  Probably for many years some industries will need to rely on software that can be installed.  The CAD industry, graphic designers (currently no suitable replacement exists for Adobe Photoshop in the webcentric world) and other technical software.  When these products become available in the webcentric world, only dumb terminals will be needed.

5. Companies that manufacture data storage for anyone but content providers, hard drive manufacturers specifically.  In the webcentric world, data is stored in the cloud.

6.  Old media (like print and radio which are already dying a slow death) and possibly cable television. In the webcentric world, everything is on-demand. As internet speeds increase, Chrome OS will be the vehicle through which users find content to enjoy. Content providers slow to adapt and provide all of their content through a browser will suffer.

Consumers Could Win

Consumers could benefit from a webcentric world.  Chrome OS is free.  Low-end hardware will be less expensive because devices will not be pre-packaged with Windows and there will be more demand for low-end hardware.  Competition in the access to the web will drive down the cost of access (driven in part by cellular companies and free Wifi spots).

Businesses may benefit.  Initially, there will be costs to revamp networks to run a webcentric system.  In the end, businesses may only have to pay for cloud expenses–online storage and perhaps online processing.  No more expensive servers.

Consumers Could Lose

The cloud could fail.  You could lose important information, all of it.  Redundancy, redundancy, redundancy and rewind will need to be prevalent in the webcentric world.

Google could “Go Rogue.”  Although highly unlikely, Google could begin charging for anything and everything at any rates it deems appropriate. Keep in mind that the Sherman Antitrust Act, the primary antitrust act in the U.S. used to regulate anti-competition, only applies to restraints on trade. Merely increasing prices (from free to the-sky-is-the-limit) is part of the capitalist system and not regulated.  Google has, thus far, avoided antitrust discipline because it has not engaged in any prohibited anticompetitive conduct. Perhaps legislators would keep a potentially “rogue” Google in check.

Become an Early Adopter?

If you want to try the webcentric world today, simply boot up your computer and delete everything but the browser.  Chances are good that you could accomplish most of what you want to do on the computer.  This could be where we are heading.

P.S. Follow up article.

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