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Last week Google sent shockwaves through the technology world when it announced plans to introduce an operating system in fall 2010. Pundits quickly termed Chrome OS "classic disruptive innovation" that promised to up-end historic market leader Microsoft. Do the pundits have it right?
Harvard Business School Professor and Innosight co-founder Clayton Christensen coined the term "disruptive innovation" to describe a pattern he observed across a range of industries where an entrant would transform what existed or create what didn't through simplicity, convenience, affordability, and accessibility.
Recent disruptive innovations include Nintendo's Wii gaming console, General Electric's $2,500 echocardiograph machine and Tata's $3,000 nano automobile.
At Innosight, we've helped dozens of companies recognize and respond to disruptive developments, and we've developed a straightforward set of tests to assess a strategy's disruptive potential. Running Chrome OS through the assessment suggests significant disruptive potential -- but some real questions as well.
The first part of the assessment looks at the degree to which the would-be disruptor has picked an appropriate "foothold" approach to start their disruptive march.
Google's planned foothold in the netbook market fits the three characteristics common to high-potential disruptors:
So far so good. The next part of the assessment looks at the potential for the disruption to progress from its foothold. Is there a clear path for the entrant to expand its business? And will the market leader ignore or -- better yet -- run away from the entrant?
Here there are some troubling signs. First, while there certainly are conceptual opportunities for Google to build a sizable business in the netbook category or expand into other categories, there are legitimate questions about the company's ability to seize those opportunities.
Despite the hype about Google's innovation prowess, the company hasn't proven that it can build sustainable new growth businesses. After all, more than 95 percent of its revenues traces back to its core search advertising model. Recent reports suggest Google is trying to fix this problem with a more disciplined approach to innovation. Chrome will be a crucial test of this approach.
Second, there is every reason to expect that Microsoft will fight fiercely for the netbook market. In an ideal disruptive circumstance, the market leader either ignores the disruption because it is too small to matter, or it decides to cede what appears to be unimportant low-margin business in order to focus on more attractive opportunities up market.
As the pattern of disruptive innovation has become increasingly clear, companies like Intel, Dow Corning, ING, and General Electric have demonstrated how to organize and execute in a way that allows incumbents to "catch" disruptions emerging in their markets' peripheries.
Microsoft seems poised to join this list. The company has made significant strides in the netbook market. Its hotly anticipated Windows 7 operating system will have a de-featured netbook-specific offering.
One cautionary note: Microsoft appears to be approaching the netbook market in a defensive way. In other words, its strategy appears to be centered on protecting its core business in more demanding market segments. Winning against Google -- and Intel, who is also emerging as a competitor in the operating system space through its efforts in the "Moblin" coalition-- requires Microsoft to flip its strategy and plays offense.
Disruption isn't pre-ordained. It depends on the choices made by the disruptor and the company that faces the disruption. My current bet is that Chrome OS ends up being less of the "nuclear bomb" proclaimed by one pundit and more of a nuisance -- unless Google overcomes its historical struggles to scale non-search advertising businesses and Microsoft slips back on its heels to a more defensive posture.
Scott D. Anthony is the president of Innosight, an innovation consulting company, and the author of The Silver Lining: An Innovation Playbook for Uncertain Times (Harvard Business Press, 2009) and the Innovation Insights blog.
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I removed chrome.
EXACTLY how would I use a network dependent computer in Grasmere, ID (or most of the US away from the Interstate highways)?
For those that have never been to Grasmere, there is no cell tower within 75 miles and no land based telephone or cable TV. In other words, no Internet. Note that in vast parts of the US, cell phone service dies a few miles from the Interstate highways and what cell service there is,is NOT 3G data capable. Even in big cities there are many "dead spots" where neither Wifi nor cell data works.
Note also that the pure physics does not work because there will NEVER be enough radio frequency bandwidth to support everyone that wants to use network based systems. Already, the cell data systems in Japan are overloaded due to people watching porn movies and many of the cell sites in Singapore are less than 35 meters in diameter because there are so many users that anything bigger woud be useless. This means on a subway platform in Singapore that could be as many as FOUR cell sites just to have enough bandwith for voice, let alone call data!
This is just more wishful thinking by folks that do not really understand real users and the real world.
Call it my own private cloud.
Outside of that, I'm having trouble figuring out what I'd use a netbook for. (For that matter, I can't justify an Apple iPhone/iTouch either - although you'd think me an Apple fan-boy for the computers I mostly use.)
Given my lack of imagination about the utility of a netbook, I don't think Chrome OS will be a threat to Microsoft until:
(1) Adobe Flash & Shockwave are available for it
(2) There's some good gaming software for it - although that means a good game, not necessarily lots of flash-and-bang.
(3) It can be used to present Microsoft presentation material
A new security architecture and a new windowing & GUI (graphical user interface) argue against any of that happening soon.
Microsoft did much the same thing to get market share in the early days (MS Dos and Windows), I think. I remember my IT guru telling me that Gates would rather I used Microsoft products, even pirated software, rather than any competitors. It is only after they became really dominant that they tried to collect from everybody and of course the technology developed so that they could do it better too.
when has a pundit ever been right?
Not part of the job description, as I understand it.
The Google OS is just another Linux Distro it would probably have a custom made Google desktop instead of KDE or GNOME but that just eye candy the gOs would probably have just about every Google app preloaded and god willing working NATIVELY. What would be distributive is if Google really put his weight behind the project and spend money in marketing the OS. One of the few things that Linux need to get in order to expend the linux desktop market share beyond 1% is a national marketing campaign. In other word we need to give a netbook with Ubuntu or the new gOs to Oprah!
By the way, wouldn't it be safer to wait on calling Chrome OS "disruptive" until after somebody has actually seen it?
every time i open that idiot program it reminds me of how bad microsoft has gotten. no problems in chrome. none.
i am whats called a power user. i notice the tiniest slowdown and a nag prompt that might be a minor annoyance to some can be a non-ending nightmare to a person like me.
every successive version is slower than the one before it, uses more resources than the one before it and provides little trade-off in terms of funcionality. dont get me wrong, i was a big fan of IE when it rightfully crushed netscape (that scrolling problem is what really killed that program)
microsoft has joined real media, aol and other previously successful companies that forgot the customer and got greedy.
microsoft's security "featuers" nag and harrass you into madness without making the browser any safer. its like taking your shoes of at the airport to give the ILLUSION that they are trying to do something when all they are really doing is inconveniencing their customers. i could write a book on what's wrong with today's microsoft in general and internet explorer in particular.
Froze my machine like a popsicle - Vista Pro