Can Google’s Chromebook Break Windows [Network Effects]
Michael Mace provides his thoughts on whether or not Google's Chromebooks can break Windows:
I wish it were true. Windows deserves to be replaced. It's just plain old, weighted down with decades of compromises and tweaks. The OS steadily degrades as you use it, and the security software companies will tell you privately that it's impossible to fully protect it from hostile software. I'm sure that with a clean start we could do better.
So I love Google's idea. Unfortunately, the Chromebook as currently defined is woefully unready to take on Windows. It may capture some niches and verticals, but it won't have a major effect on the industry unless Google makes major changes to it. And some of the biggest barriers to its success are inside Google itself.
The core argument underlying Mike's analysis centers around identifying the company that owns the network effects. Indeed, it is Microsoft with its OS and Office that own the network effects. When there is no clear owner of network effects, each technological generation completely opens up the field. However, when there is a clear owner of network effects, the winner of the previous generation gets to carry over it's advantage. Think of it a football rivalry where the score never resets to zero. That is the case with Microsoft. Proof that it owns the network effects is in the pudding (Vista, anyone?).
Microsoft has been scoring for years. For Google Chromebooks to win, it needs a couple thousand points just to be close:
Once a computing platform is established, it's not enough to make a product that's better overall. You have to duplicate the core benefits of the current product, and be so much better in some areas that you overcome the users' natural resistance to change.
For Google to win the network effects, it not only needs to build in features that elicit customer delight, but the basic must-haves for business operations.