Thursday July 9, 12:12 AM
Google aims at Microsoft's heart with PC operating system
By Glenn Chapman
SAN FRANCISCO (AFP) - Google (NASDAQ: GOOG - news) 's personal computer operating system will fire a shot at the heart of rival Microsoft (NASDAQ: MSFT - news) and move their escalating battle further onto Internet turf, analysts said Wednesday.
Google says it will launch "Chrome OS" by the middle of next year and that the operating system will be quick, light-weight and tailored for a "cloud computing" trend of offering applications online as services.
Google pitches Chrome as ideal for low-cost, light-weight netbooks, a growing segment of the computer market.
The Internet titan also announced its Google Apps suite of email, calendar, word processing, instant messaging and online telephony programs are out of a test, or beta, phase.
Google's "cloud" services compete with Outlook, Word and other Microsoft software.
Chrome OS could become a viable challenger to the Windows operating systems on which Microsoft's global empire was built, according to analysts.
"This is very disruptive," said analyst Rob Enderle of Enderle Group in Silicon Valley.
"This takes the entire concept of an operating system and takes it to something it really should be in this century; something much more tied to the Web. Right now, the market is moving online."
Google already has an Android operating system only used for mobile phones at the moment, but the software has showcased Google's keen interest in expanding beyond its search engine base.
Chrome is "our attempt to re-think what operating systems should be," Google said.
The search engine giant said it will open-source the code for "Chrome OS" and that netbooks running the system would be available by the middle of next year.
Rubicon Consulting principal Michael Mace said in an online posting that it seems Google is making clear that it wants "to bleed Microsoft to death" by giving away equivalents to the software king's products.
Free netbook operating systems offered by Google will pressure Microsoft to cut prices on Windows software or risk losing market share. Windows operating systems run more than 90 percent of the world's computers.
"The more free options, the more pain caused," Mace wrote.
Microsoft has a few years to respond to the Google threat because of the pace at which high-speed Internet networks are improving, according to Enderle.
Faster, more reliable networks are expected to make cloud services more enticing.
"Microsoft OS was basically built before broadband and the Internet and is in some ways almost anachronistic in this environment that we're in now," said analyst Christa Quarles of Thomas Weisel Partners (TWPG - news) .
"This whole idea of Web delivery applications is something that we think is part and parcel of the way the world is going."
Google is "clearly looking for ways to chip away at Microsoft," she added.
It would take Google "quite a while" to wrest a significant share of the operating system market from Microsoft because many programs depend on Windows, according to Gartner (NYSE: IT - news) analyst Michael Silver.
Bundling an operating system with cloud services could cause Google regulatory woes similar to those that have haunted Microsoft, which has been a prime target of US and European antitrust officials..
"It is certainly hard for the European Union to tell Microsoft they can't do something and then have Google show up doing it," Enderle said.
The European Commission (EC), Europe's top competition watchdog, opened a new front in its epic antitrust battle with Microsoft in January, hitting the company with fresh charges of unfairly squashing competition.
Microsoft has said regulatory wrangling has prompted it to strip Internet Explorer Web browsers from copies of its Windows 7 operating system to be sold in Europe.
Windows 7 is on track for worldwide released on October 22.
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