Should Microsoft be afraid of Google’s Chrome OS?

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How should Microsoft respond to news that Google will make its own operating system?

Guest: Michael Cherry, Directions on Microsoft

Here is an edited transcript of my interview with Cherry:

Gordon: How is Google’s announcement of a new operating system likely being viewed at Microsoft?

Cherry: There’s a certain amount of interest when someone else makes claims they can do an operating system. There will be a lot of interest in what are they doing, what are they actually delivering.

I think there will be concern on the part of the company that it could fragment the sales of netbooks into netbooks running the Chrome OS, Windows and Linux distributions. When you add another player into a mix it’s going to have some effect.

The missing piece here is while Google promises us there is going to be great applications for this OS, we need to see them. It’s those applications that are going to get people to use it. It’s not the OS itself.

Gordon: Some people are painting the Chrome OS as sort of a nuclear bomb dropped into the lap of Microsoft, and that it sets up an epic battle. Do you see it that way?

Cherry: Not really. The thing that will keep operating system developers at Microsoft, Apple, and the operating system developers who contribute to Linux distributions doing their best work is alternative operating systems. I think its super for application developers and consumers. So hopefully what Chrome OS does is spur a new generation of applications.

Gordon: How should Microsoft respond to the Chrome OS?

Cherry: The best response is to keep making sure you do your best work with your operating system, that you continue to make it better. To make it a better platform to run applications on than your competition does. That means making sure its fast and secure.

Gordon: I guess the big question for me is will it end up being better to have this sort of Internet-based operating system versus a more traditional OS that sits on your computer and does what Windows does.

Cherry: There is tremendous potential for it in the future. I just don’t think we’re ready yet. I’ve yet to find a Web-based application that I’m willing to give up my locally-running counterpart for. Web-based applications don’t have all the features I want them to have.

Second, I’m very concerned about storing my data in the cloud. We had a severe outage here in Seattle last week where a large data center that hosted a lot of Web services went down after a fire.

Third, there are a lot of privacy issues related to data. I certainly don’t want my data in a Web-based application if a third party is indexing it and going through my data.

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