I have just read a paper written on Business Models by the Sloan School of Management written in 2006. In a nutshell, a business model consist of two elements: What a business does and how the business creates value. They have found that there are different kinds of business models operating in the economy but some perform better than others, both in terms of higher profitability and market value.
The most common business model is one that involves selling ownership of assets to customers. Examples of these are manufacturers, they sell what they make and distributors, they sell what others make. The paper has discovered that business models involving selling the right to use without owning the asset, perform better than business models that involve selling the ownership of assets. This is the new paradigm of the future and Google understands this.
Though some may raise their eyebrows on Google’s plan to develop a “web platform to rule them all” as laughable, it is no laughing matter. Google is selling you the usefulness of something you want without ownership. The launch of Google Chrome OS signals this tectonic shift where even the mightiest will fall in the ensuing earthquake that will shake the business landscape. Google and Microsoft represent two different paradigms which is expressed in their business models. With the technological advances we have made, accessibility to cloud-based services and software will be increasingly valuable to consumers.
“Google has partners that share its vision says something about the shakiness of Microsoft’s position. Acer, Adobe, ASUS, Freescale, Hewlett-Packard, Lenovo, Qualcomm, Texas Instruments, and Toshiba are all working with Google to help it re-imagine the operating system. So too is Intel, as The Register reports.” (information Week, 10 July 2009)
My personal take is that Google’s plans for Chrome OS is an inevitable path of the future of business. Am I right? Your thoughts please.
Google Chrome OS: Web Platform To Rule Them All
With Chrome OS, Google aims to make the Web the primary platform for software development.
By Thomas Claburn, InformationWeek
July 10, 2009
Google’s plan to release its own operating system based on its Chrome browser is at once audacious and laughable. Microsoft Windows represents slightly less than 90% of the personal computer operating system market, a position it has held for years.
Google’s industry ally, Apple, has managed to steal a few percentage points of market share away from Microsoft in the past twelve years under the singular leadership of CEO Steve Jobs. But Windows remains the dominant operating system, more dominant even than Google is in search.
And with the forthcoming release of Windows 7, Microsoft appears to be well-prepared to defend its empire.
It’s hard to imagine a less promising business for Google to enter, especially given that Google plans to give Chrome OS away for free. And Google’s grand plan to shake up the operating system market isn’t made more credible by the absence of any actual programming code or substantive information about Chrome OS.
Yet, the fact that Google has partners that share its vision says something about the shakiness of Microsoft’s position. Acer, Adobe, ASUS, Freescale, Hewlett-Packard, Lenovo, Qualcomm, Texas Instruments, and Toshiba are all working with Google to help it re-imagine the operating system. So too is Intel, as The Register reports.
Google’s decision to target the netbook market may help the prospects of Chrome OS. Although Microsoft has made a concerted effort to push Windows on netbooks to fend off low-cost Linux-based challengers, Google may find it easier to compete in the netbook market because access to cloud-based services and software is more valuable on devices with constrained resources than on high-powered desktop computers.
Steve Andriole, professor of information technologies at the Villanova School of Business, observed in an e-mail that Google’s announcement comes at the right time, just as the industry is moving to smaller, more mobile devices.
He believes that both pricing and Google’s vendor relationships will play major roles in determining the acceptance of Chrome OS.
But Google is betting that will change and is working to effect the change on which its bet depends. Within a year or two, Web browsers will gain access to peripherals, through an infrastructure layer above the level of device drivers. Google’s work with standards bodies is making that happen.
According to Matt Womer, the “ubiquitous Web activity lead” for W3C, the Web standards consortium, Web protocol groups are working to codify ways to access peripherals like digital cameras, the messaging stack, calendar data, and contact data.
Womer said the standardization work could move quite quickly, but won’t be done until there’s an actual implementation. That would be Chrome OS.
And as the long-foretold Internet of Things emerges — allowing everyday objects to be addressed via online queries — Chrome OS will be well positioned to help Google organize even more of the world’s information than the company already handles.
Chrome OS will sell itself to developers because, as Google puts it, writing applications for the Web gives “developers the largest user base of any platform.”