July 08, 2009

Why Google is making an operating system

Today Google announced that they are launching an operating system called Chrome OS. This is a strategically very smart move.

Google makes money off the web, their primary source of revenue is adsense which brings in billions of dollars a year. They are quickly diversifying their offerings with google apps, gmail, analytics and a host of other applications. All of them webbased. They are an Internet company by heart: This is where their soul lies, and this is what they do best. Their back-end technology is unsurpassed and their brand is phenomenal. Their future and financial success depends on the Internet. Or more precisely it depends on having as many people and corporations as possible moving most of their information and work online. Preferably to one of Google's offerings.

There are two gatekeeper products between the user and Googles products: The browser and the OS. A user needs an OS and a browser to reach Google's products, and whoever controls these can put up roadblocks between the user and Google. I'm talking about Microsoft here of course. And since many of their products compete with Google, Office being the prime example, they have have all the incentive in the world to make the users way through the OS and browser as hard a s possible before they can reach Googles products. It's a good strategic decision, Office is a major cash cow and accounts for a large part of Microsofts revenue. It would be stupid to make it easier to use a competitors products if you can do something about it. Which Microsoft can because they are the gatekeepers.

Google knows this, and are trying hard to change the status quo. That's why they have long supported the Mozilla foundation who make the Firefox browser. It's also why they launched their own browser last year. Microsofts Internet explorer has always been buggy, and not quite up to date. The newest technology often isn't available in explorer. This isn't because Microsoft engineers are stupid, it's because Microsoft management is good at strategy. They want people to use the Internet for browsing news and finding information, not to start undermining the goldmine that is office. And you need a state of the art browser to use the heavy javascript that makes online productivity apps possible. When Google launched a browser it was a jab at the gatekeepers. It was much faster and more responsive than Explorer, and the javascript engine blew them out of the water. This put Microsoft in a strategically bad position, they didn't want to make the browser so good that online apps could eat away at their core business, but if they didn't follow suit they would start losing marketshare quickly. Damned if you do, damned if you don't. Note that Google's browser doesn't need to have a large marketshare, indeed that's not the goal. The goal is to show the world what can be done in a browser, and thereby forcing Microsoft to innovate. And it worked: The newer versions of explorer are faster and have particularly gotten better at executing javascript, the backbone of online apps. Google won the browser war, with the help of Mozilla. The important point here is that Google doesn't care what browser you use. They don't make money on browsers, they make money on online offerings and apps so all they care about is that your browser is fast and supports the newest technologies.

Now they are launching an operating system, and attacking the last gatekeeper technology between the enduser and their offerings. Strategically the situation is exactly the same as the browser war, Google doesn't care if you use their OS. All they care about is that you can get to their products quickly, and that you start moving your data onto the web instead of keeping it on your own harddrive. And the way to do this is to launch an operating system that shows how easy it is to use the Internet for almost anything. That's why they have been boasting about ridiculously low startup times. Turn on your computer and 10 seconds later you'll be at google.com. And they'll use the OS to show how little you actually need to have on your computer, how few programs you need installed, and how much easier it is if you find your information with Google, use Google docs for your work, share your family pictures with picassa, and check your website stats with Google analytics.

Microsoft will have to adapt, and follow along. If they want to keep their marketshare that is. Of course they'll be destroying their core business in the process. Damned if you do, damned if you don't.

This one will be hard for Microsoft to counter.

If you made it all the way to the end you must have found it interesting.

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Blogger Hitchhiker said...

the whole day I've been browsing and reading various blogs 'bout todays "only news" :P .... but this is the best and so to the point.... one of the best stuffs I've read for a while....

6:52 PM  
Anonymous Anonymous said...

Good strategy dissection there, you should do management consulting if you don't already :-)

6:52 PM  
Blogger Max Tobiasen said...


Hey thanks a lot :-)

Check out this post from Joel Spolsky about business strategy and complimentary products, it's somewhat related and a good read.


6:55 PM  
Blogger MC said...

Well said

8:12 PM  
Anonymous Tom said...

You still left us wondering why Google invested in the development of a browser while at the same time injecting a lot of cash in the Mozilla foundation. What do they expect to achieve with Chrome that they could not with Firefox?

9:00 PM  
Blogger Max Tobiasen said...


Google doesn't really care whether people use firefox, Chrome, Opera IE or Conqueror. What they care about is innovation in the browserbusiness, so that they can make a better webexperience, and thus money.

The more competition the better, so I would guess that Mozilla and firefox have nothing to worry about since it's a drop in the bucket for Google to keep sponsoring development of Firefox.

10:08 PM  
Anonymous Jonathan Allen said...

Um, yea. The problem with that is without a multi-threaded RIA platform like Silverlight, Google Docs will remain crap. And crap won't beat MS Word. Hell, even pretty decent won't beat Word, you need something really stellar.

If Google was serious about beating Microsoft they wouldn't be wasting their time with Chrome OS. They would instead be investing heavily in their own RIA platform.

1:21 AM  
Blogger AlexMeyer said...


Actually I think it has more to do with the fact that their OS is build around the Chrome browser. By releasing a browser first, they both masked their real intent of making an OS and at the same time took the first steps towards making that OS.

10:17 AM  
Blogger Thierry said...

This exactly what google is doing. But instead of adding another plugin to the browser they are making the browser evolve through the support of HTML5. Chrome is at the edge and they are forcing IE8 to add some of the HTML5 features.

Thanks for this strategy dissection.

12:02 PM  
Blogger Veera said...

This is an interesting view point about Google OS! By controlling the market share in Web, Google can easily push their apps/services to the masses. Google OS can help them to take over the web soon.

12:50 PM  
Blogger Edinges said...


Google is working on their own RIA, they started with a java to javascript compiler and gui toolkit called GWT. And are working actively on HTML 5.

So they are preparing a set of RIA technologies, in parallel they are developing all kind of online services and api's, and don't forget their hosting infrastructure google appengine, once they merge it all...

12:59 PM  
Blogger NinjaItachi said...

This is the first article reading Google's motives that made real sense all day!

Ever since Chrome came out I was wondering when they were going to make an Android-Chrome OS for notebooks.

But even though I knew that one day it was going to get made, I couldn't understand what they were aiming for.

...the pieces have fallen in place.

12:59 PM  
Anonymous Anonymous said...

I don't see how this puts any pressure on Microsoft (or other desktop Linux distros). Most people don't just browse the Internet, or check mail and such. They are online, but they also use MS Office, or Photoshop, or Fallout 3 at the same time.

If there's anything to learn from the new wave of smartphones (iPhone, Pre), it's that web applications cannot replace native applications. Not with regard to performance, responsiveness, resources consumed and most importantly, developer committment.

Also, most computing devices, whether cell phones, netbooks, laptops or desktops, have nowadays good Internet browsing support (on any operating system). Most of these devices have some kind of sleep mode with a 1-3 seconds wake-up time. I just can't see what the Google OS will change in this landscape.

1:29 PM  
Anonymous Anonymous said...

If you strip off the irony, sarcasm and otherwise superflous remarks, this is what *actually* makes sense: http://fakesteve.blogspot.com/2009/07/lets-all-take-deep-breath-and-get-some.html

1:36 PM  
OpenID Dean said...

Good analysis of Google's strategy. But it's going to take more than an enhanced browser to get people to use Google-based applications.

The problem with browsers is that they use crude technologies like HTML and JavaScript. In order to get people to migrate from native applications to something tied to Google's web site based offerings Google is going to have to offer things that give a native look and feel or at least near-native polish.

We are seeing this evolution right now with JavaFX. A JavaFX applet can be opened in a browser and then dragged onto your desktop and run without a browser. JavaFX is the first RIA platform to be targeted at desktop, settop, and mobile devices so the way forward sans browser is in sight.

The browser and its antiquated technologies are another gatekeeper that has to get out of the way, and we are seeing the beginnings of this.

3:58 PM  
Anonymous Anonymous said...


Google made a browser with a fast Javascript engine, and then continued to give money to Mozilla so that they could implement a fast Javascript engine in Firefox, too. And since Firefox has a big market share, other browsers had to follow -- even IE!

4:02 PM  
Anonymous Anonymous said...

You begin your sentences with "and". Naughty boy.

6:40 PM  
Blogger Max Tobiasen said...


Sorry mom

And don't worry I won't do it again.


7:30 PM  
Anonymous Anonymous said...

Google are developing another interesting RIA solution, it's called "Native Client":


11:09 AM  

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