Google has always dismissed allegations of direct competition with Microsoft, and that seemed almost believable until Chromebook crash-landed right in the middle of Microsoft’s pool party.  It runs on its own browser-based operating system ChromeOS, immediately making it a competitor to Windows. ChromeOS is Linux-based, and had been under development since 2009. There are three manufacturers for Chromebooks: Samsung, Acer and unofficially, an Australian company named Kogan.

With Chromebook, Google is indubitably competing with Microsoft, trying to steal Microsoft customers and severing its Office market with alternative, browser-based solutions.  They are also taking aim not on average consumers but large enterprises that are already using Google Apps for Your Domain (GAYD) and schools (knowing that these are Microsoft’s sources of mainstay revenue). The situation brings us to the question of whether or not Chromebooks have what it takes.

Here are the specs:

• 12.1 in laptops
• 16GB SSD storage (the Kogan models offer 30GB)
• 2GB RAM (1GB on the Kogan model)
• Intel Atom 1.66GHz
• made by Samsung or Acer (or, unofficially, Kogan)
• 8-second boot time
• 6-week update cycle for the OS and the browser
• will be available in the US, UK, France, Germany, Netherlands, Spain and Italy from 15 June
• price in the UK: £349 for Wi-Fi model, £399 for 3G-enabled version. (Kogan: around £225).

Chromebooks are priced at $1,500 which is only half of what a comparable Windows PC could cost. “We’ve corroborated that $3,000 figure with enterprise customers,” said Sundar Pichal, the senior vice-president at Google of the Chrome project. Spending $3,000 for a PC unit a year (inclusive of helpdesks, antivirus, firewalls etc.) makes a $28 per unit per month model a really good deal. For students, it’s only $20. In one year, it will only be $336 and $240 for students.

The cost effectiveness is also credited to the absence of security.  Since it is browser-based and doesn’t have a local storage, you supposedly won’t need an onboard antivirus solution and all your data will be stored online.  Moreover, if your unit gets lost or stolen, it’s just mere hardware that can be immediately replaced, and your important data will remain safe in the cloud. As to profitability,

“Users who use them use the web more,” says Pichal. “And where people use the web more, it’s great for Google. That’s on the consumer side; then our profits improve. On the business and school side, it’s a clear revenue business. So we hope to have a successful business.”

There are 3 million businesses with 30 million active users utilizing GAYD. That’s a huge market for Google to tap. However, a transfer to a model that’s never been tried before would be a risk. Besides, there are a lot business of functionalities that cannot be done on a browser and this will make things difficult for Google. If Google still manages to attract Microsoft customers, Google’s model will mean long-term losses for the software giant.

Moreover, it will also hurt security solutions companies, since ChromeBooks have no storage, thus, virus-free and self-checked. It can detect corruption within its software and will self-repair. Security solutions companies are piggy-backing on Microsoft’s enormous market, and the decline of the former will mean virtually everything for latter’s business.

Nevertheless, Google’s been pushing an agenda for cloud-based solutions for years now, and the wider it stretches its reach, the more its end goals are able to come together.  Microsoft’s been watching Google closely, spending the past several years seeking ways to improve its own software capabilities and browser-based solutions.  One thing’s for sure–a great deal of technology, as far as Google and Microsoft are concerned, are headed to the cloud.  This will be the war path for Google and Microsoft as the search giant becomes more aggressive in its long-term plans.