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  1. 1. NYT In Chrome, Hints of a Real Rival to Windows Peter DaSilva for The New York Times By MIGUEL HELFT and ASHLEE VANCE Published: July 8, 2009 SAN FRANCISCO — If at times you're frustrated with your PC — and who isn't? — Google says it is working on a solution. Many people easily lose patience with PCs that are slow to start up and prone to crashing, vulnerable to virus attacks and constantly in need of fiddly updates. Hoping to turn that irritation to its advantage, Google is developing an operating system — the underlying software that handles the most basic functions of a computer. With the software, Google is mounting a blunt challenge to the dominance of Microsoft, whose Windows operating system runs about 95 percent of PCs. Google promises that its Chrome operating system, which will be available on computers in the second half of next year, will put an emphasis on speed, simplicity and security. Google faces enormous hurdles. Computing giants like I.B.M. and Sun Microsystems have spent years trying to dethrone Microsoft, with little to show for it. But if it gains traction, Google's plan could undermine not only Windows but also Microsoft's other multibillion-dollar franchise, Office. Google is
  2. 2. trying to put the Web browser at the center of people's digital lives, relegating complicated operating systems like Windows to a secondary role. "I'm not saying the shareholders should take their money and run, but this is the beginning of the end of Microsoft as we knew it," said Jean-Louis Gassée, a venture capitalist who has battled Microsoft in posts at Apple and his own computer company, Be. A spokesman for Microsoft, Frank Shaw, declined to comment on Google's announcement or the competitive threat. The new software's primary mission will be to run Google's Chrome
  3. 3. browser, which will serve as a quick on-ramp to Web sites and online applications like Gmail and Facebook. "We're designing the OS to be fast and lightweight, to start up and get you onto the Web in a few seconds," Sundar Pichai, a vice president for product management, and Linus Upson, an engineering director, said in a blog post announcing the project late Tuesday. "We hear a lot from our users and their message is clear — computers need to get better." The plan is part of Google's bet that a huge shift in computing is under way. In Google's view, Web connections will become so fast and browsers so powerful that most of the programs that currently run on PCs will be replaced by online applications. That would eliminate the need to install, upgrade and back up software. Analysts say advances in technology make that vision more realistic today than when the browser company Netscape unsuccessfully championed it a decade ago. But Microsoft still has many advantages. It has been able to keep its software partners churning out games, media software, tax preparation software and other applications that rely on Windows. And it puts time and money into making sure that a vast array of devices like printers and cameras work well with its software. While Google's new software will be free, other free products have failed to dent Microsoft's armor. A handful of companies offer the free Linux operating system as an alternative to Windows, but Linux has not gained
  4. 4. enough market share to weaken Microsoft. (The Chrome operating system will have Linux at its core, and like Linux it will be open source, meaning outside programmers will be able to modify it.) What's more, Google's operating system remains in its earliest stages of development, and there is no guarantee that the company can deliver on its promises. Other software projects from Google, like its Android operating system for mobile phones, have had only limited success in the market so far. Yet with Google's latest effort, some argue that the right company has hit on the right idea at the right time. "Google has a reasonable stab at redefining the desktop," said Mark Shuttleworth, the chief executive of Canonical, which makes a version of Linux called Ubuntu. Rather than buying bulky desktop computers, consumers have been turning recently toward small, low-cost laptops known as netbooks, which serve as little more than gateways to the Web. Google says its operating system will be initially aimed at netbooks, which are generally not powerful enough to handle the latest version of Windows. Google's fundamental business model, too, may play to its advantage. The company says it believes that making Chrome free to PC makers will be worthwhile because more people will spend more time online, using Google's search service and its other Web-based applications like Google Docs, a Web rival to Microsoft Office. That will help Google make more
  5. 5. money from advertising, which accounts for nearly all of its $22 billion in annual revenue. That approach essentially reverses some of the dynamics used by Microsoft to crush Netscape. At the time, Netscape charged $50 for its Web browser, and Microsoft undermined its leadership by making its own browser, Internet Explorer, free. Now it is Microsoft that faces free rivals to both Windows and Office, its two biggest cash cows. Under its model, Google could even afford to pay computer makers to install its software on their machines, essentially subsidizing their cost. "If hardware is free and software is free, the only way you make money is off of services, and that is Google," said Jim Zemlin, the executive director of the Linux Foundation. Microsoft, while slow to act, has not stood still. It is in the process of creating many of the same online applications as Google, although it has been less willing to make them free. In addition, Microsoft has blunted the popularity of Linux on netbooks. When they first appeared two years ago, the vast majority of netbooks came with Linux. Today, Microsoft's older Windows XP software sits on more than 90 percent of netbooks in the United States, according to NPD, a market research firm. But neither of those efforts can deliver the level of profits that Microsoft has enjoyed as it dominated the world of computing for the last two decades.
  6. 6. "There are answers for Microsoft, but all of them entail a significantly less profitable business model," said David B. Yoffie, a professor at Harvard Business School. July 9, 2009, 8:30 am The Incredible Shrinking Operating System By Saul Hansell Google's new Chrome operating system is a challenge to Microsoft in several ways. It will offer a free rival to Windows, which can add $25 to $100 to the price of a computer. But it also represents a conceptual slap at the elaborate array of features that make up the soon-to-be-unveiled Windows 7. Chrome OS will be positively minimalist by contrast. It will be built on a simple version of Linux that is meant to run only one application: the Chrome browser. Google's idea is that anything for which you may have wanted a separate software program can be done within the browser instead. Never mind all the other functions and add-on programs you find in Windows. This vision of the declining importance of the operating system reminds me of a conversation I had recently with Paul Maritz, the chief executive of VMware and a former top Microsoft executive who once ran its operating system unit.
  7. 7. "The traditional operating system is becoming less and less important," Mr. Maritz said. "It's not going to go away, but it is going to shrink." VMware is in a fierce battle with Microsoft for the hearts and minds of executives who run big corporate data centers. So take Mr. Maritz's predictions in that light. But he nonetheless paints the same scenario for Microsoft's big customers that Google's vision relies on for individual PCs. An operating system, as Mr. Maritz describes it, does two things. It is the central nervous system of a computer, controlling the disk drives, memory, displays and such. And it provides a toolkit for people writing programs, allowing them to save steps and also make all the programs operate in consistent ways. Windows, for example, defines how menus appear, how programs look for files, how they can display video and myriad other functions. Both roles are being usurped by new technology, Mr. Maritz argued. VMware makes software that inserts itself between the operating system and the actual hardware it runs on. It performs a function called virtualization — allowing programs and operating systems to be shuffled among different computers so they can be used more efficiently. One minute a given server could run Windows and the next, VMware could swap in a different application running Linux. Microsoft has its own virtualization system, although it mainly supports Windows. Meanwhile, Mr. Maritz said there are new ways that developers write applications that rely less on the services in the operating system. For
  8. 8. example, they can use software known as development frameworks. Microsoft's own .Net framework is one. But there are others, including versions of Java, Ruby on Rails and Django. "There are very few developers who write applications directly to Windows or Linux," Mr. Maritz said. "They write applications to one of these frameworks." The frameworks, in turn, are made to work on a variety of different operating systems. "If you are in Ruby on Rails, you have to work really hard to tell what the operating system is, it is so far removed," Mr. Maritz said. This is much the same as on personal computers, where you can't really tell if you are on a Windows machine or a Mac if all you are doing is using a Web browser. VMware is deliberately trying to squeeze the role of the operating system by working directly with the developers of these application environments to create features that take advantage of its software. And it is supporting a movement called "Just enough operating system" which encourages developers to use the smallest subset needed of the pieces of an operating system. Clearly this isn't the only model around for running servers. Microsoft has its own vision of how data centers will evolve, with services like Azure, its operating system for cloud computing.
  9. 9. But the nature of its competition is changing. It's not enought for Microsoft to simply prove that Windows is better than OS X, Linux and other operating systems. The company increasingly has to convince customers that they need an operating system at all. July 8, 2009, 1:29 pm Does Being Free Cheapen Google's Brand? By Saul Hansell Is Google undercutting the value of its own brand by giving away everything free? That's an interesting implication raised by the statement that the Yankee Group just sent out about the announcement of a Google operating system for PCs. The research firm argues that the real winner of the battle between Google and Microsoft is Apple. That may be overstated, but it raises an interesting point about the gaps in what Google has offered consumers. Google is as well-known as any company in the world, and it has earned a reputation for technological innovation. But so far its products are not consistent, easy to use and interconnected the way Apple's are. "What's really hurting Google's ambitions is its inability to build a brand ecosystem," the Yankee analyst Joshua Martin wrote. "With the announcement of the Chrome OS, Google has missed the chance to
  10. 10. weave a consistent story for consumers." Mr. Martin imagines that if Apple were to introduce a netbook or some other portable computing device, it would connect neatly into its line of products, which run from the iPhone and iPod through the Mac and Apple TV. What Mr. Martin doesn't talk about is that Apple no doubt would command a price premium for any portable computer entry, and that a segment of users would willingly pay it. Being a luxury goods provider like Apple is hard work. You need to maintain both the style and substance that makes your products worth more than the run-of-the-mill competition. But it's great business if you can get it. To its core, Google believes in the other extreme. The company is based on exploiting the relentless reduction of the cost of computing hardware, the economies of open source software, and the efficiency of huge data centers. It drives down the cost of everything it gets involved with by offering services, from e-mail storage to Web analytics — and soon, operating systems — for free. All it asks is the chance to show some ads and collect some data. For corporations, which want higher levels of service and don't care for ads, Google charges fees, but much lower than its rivals. This has been a lucrative strategy so far. And betting on technology getting cheaper is on the right side of history. But is Google squandering some of what may be the best brand yet
  11. 11. created this century by positioning its operating system as cheaper than Windows? What would happen if the company made the Google name worth paying extra for?