The greatest thing about Going Google is that even when it’s all over, and I return to my MacBook Air, I’m not going to lose any of the data I’ve put into Google’s system. Everything I’ve typed, +1’d, and Gmailed is available on any computer and device. But with such device independence, one question immediately comes to mind: If all of the content is available on all devices, what’s the point of Google pushing Chrome as an independent operating system at all?
To begin with, we need to figure out what Google’s goals are. The most apt description was put forth by venture capitalist Bill Gurley in 2011, when he used Warren Buffett’s famed “economic castle” metaphor to describe why Google was pushing Android and its other free services. The economic castle argument states that a secure company is one that has a huge castle (Search and AdWords in Google’s case) surrounded by unbreachable moats (Android, Chrome, default search engine status in iOS, and Firefox).
They [Google] want to take any layer that lives between themselves and the consumer and make it free… In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.
So this pretty definitively outlines Google’s top priority: protect Search and Ad revenue. It’s the basis of Google’s business, responsible for most of Google’s annual revenue. But for much of the last ten years, Google has been able to protect its core business lines without delving into the operating system business. Why does it now feel threatened enough to go into the hardware and proprietary operating system business, which could end up being a giant sinkhole for the company?
To understand this shift in strategy, we need only look at the tectonic shift that occurred when Apple released iOS. The product caught on like wildfire, and the success of mobile apps began displacing Google’s core source of revenue: the browser. With Apps becoming the source of people’s content, and being effectively siloed from the rest of the open Web and, thus, unsearchable, Google’s executives saw a significant threat.
Consider the future that never will be, the one that Google executives were looking at. If Apple was completely in control of the sources of information — mobile apps — it could block anyone it wants. This was never the stated goal of Apple, but being entirely dependent upon one company for your future source of revenue is rarely a good business strategy. This is why Larry Page was being honest when he said, “If Google did not act, we faced a Draconian future where one man, one company, one device, one carrier would be our only choice. That’s a future we don’t want.” It’s a dramatic statement, to be sure, but it also highlighted the strategic threat that Google faced at the time.
So the fact that Google released Android to combat what it saw as a threat of monopolistic dominance over the entire industry should surprise no one. Android served as a moat in the same way buying the rights to the search boxes of iOS and Firefox served as a moat. However, there’s a huge risk differential between buying rights to an existing platform and creating your own platform.
For starters, when Google inked the original deal with Mozilla in 2008, Firefox was responsible for between 25 and 30 percent of all Internet traffic. It was a no-brainer for Google to pay for the rights to become the default search engine. After all, Mozilla was clearly a driver of traffic, so the high cost of the search engine deal would pay off immediately for the company’s search engine. At the same time, it also built up an additional moat that stopped Microsoft or Yahoo from swooping in and taking a quarter of Internet traffic.
There’s a big difference in the level of risk between capitalizing off of a preexisting trend like Firefox and creating your own dominance, as Google was attempting to do with Android in 2007. Investing significant resources into Android is far riskier from a financial and brand perspective than paying to become the default search engine for a browser. Android could have failed miserably, and Google would be left to pick up the pieces. Compared to partnering with a third-party where the only thing to lose is cash, the differences are immediately apparent.
Android didn’t fail, though, and it is now one of the most important of the many moats that circle Google’s economic castle. Looking at why Android succeeded in the beginning, though, it’s clear that it had more to do with marketing and a perfect storm than with the product itself. Google claimed Android was a better product because it was “open” and customizable, and by the time that argument became tiresome, Google was already reaching feature parity with iOS, and in some places surpassing it.
Android’s initial success can be attributed to a number of things. At the time, the iPhone was only available on AT&T, which meant Google and Android had free reign in the rest of the market and on other carriers. Then there’s the fact that Google appeased users with hardware keyboards and other features that weren’t mission critical but which were good selling points for salespeople. Finally, Google assaulted the market with dozens of devices, so that it was (and still is, to some extent) hard to avoid an Android phone when looking for a new phone. Giving carriers a degree of control over the operating system also put them in favor with the group responsible for the majority of cellular sales.
Not to diminish the success of Android or the phenomenon of its growth, but the success of the platform had more to do with the chance of all switches lining up at the same time, and Google just following the path. Android’s success was a massive marketing and strategic win for Google, but it isn’t a sign of Google being able to necessarily build a better platform from the get-go, but instead that there were no other choices on the market for most carriers.
Android isn’t Google’s only platform success, though, as Chrome has slowly but surely become the browser to have on desktop machines. But unlike Android, Chrome has apparently won the market, with the market share for Internet Explorer and Firefox slowly in decline, while Chrome’s market share is at an all time high of nearly 40 percent. The reason behind this is that the browser was a leap forward for the market. It rolled out sandboxing, ran on WebKit, and was an early adopter of many of the new features of HTML5 before other browsers. There were bumps in the road, as with any product. But on the whole, Chrome as a browser has succeeded, because it was better than the other browsers. To understand this, look at the initial reactions when Chrome was first released.
This is not true for Chrome OS. The operating system faces staunch resistance in the form of Windows, OS X, Linux, and even Android in some cases. Chrome OS is not as feature rich as other operating systems, it isn’t as powerful, and it isn’t as widely supported. Sure, some people like it as a standalone unit, but that’s the exception to the rule. Because of this resistance, it raises the question as to if Chrome OS can actually succeed.
Up to now, the answer is that it hasn’t succeeded, because it doesn’t have a clear use case. It isn’t definitively better than competitors, like the Chrome browser, it isn’t entering an empty market with a “good enough” product, like Android, and it doesn’t have the cost advantage over other competitors, which would be the last big selling point for it. So regardless of the minute pros and cons of the operating system, the big question is: Will it succeed?
After all, everything you can do on Chrome OS (minus the built-in 3G modem, which isn’t a huge selling point), you can do on any other computer with the Chrome browser. This means there’s no lock-in on the operating system. There’s no reason not to leave, which is the biggest hurdle that Google will face if it wants Chrome OS to succeed.
There isn’t a clear cut way for Chrome OS to win, either. Aside from becoming a full-fledged browser with full capabilities like Windows and OS X, there’s not a big reason to carry around a Chromebook as your secondary machine. Google could have a more feature-rich version of Chrome OS in the works, but even if it did, it would be abandoning the very principles upon which Chrome OS is built, namely data portability and security.
With that in mind, then, there are really only two futures available to Chrome OS. If there’s no monetary or strategic way for it to be successful, there’s no clear reason why Google would continue to invest resources in it. To be blunt, it should be shut down or it should be folded into Android. From an objective and strategic point of view, it makes the most sense.
Unless Google has an ace up its sleeve in making Chrome OS definitively better in the OS market, like the Chrome browser was to the browser market, then the future for Chrome OS looks gloomy indeed.
[Illustration by Hallie Bateman]