Advantages of Windows for the casual consumer continue to erode

There's no denying that 2013 was a bleak year for sales of Windows 8 devices to consumers.  On the other hand, Chromebooks -- laptops running Google Inc.'s (GOOG) Linux-based cloud-centric operating system -- were picking up steam, particularly on the budget end.

I. Windows Apps on Chromebooks

Microsoft Corp. (MSFT) seems aware of Chromebooks' growing popularity and it appeared eager to nip this trend in the bug airing commercials late last year which inferred that, in part, Chromebooks were useless as they could not run Windows apps.

Well, thanks to VMWare, Inc. (VMW) that's not really true anymore.  VMWare this week announced a new cloud Windows virtualization platform that will specifically target Chrome OS.

VMWare is billing its technology as "Desktop as a Service (DaaS)".  The technology is expected to enable users to run nearly any Windows app in Chrome.

The technology employs VMWare's Blast software and uses HTML5 to help with the client-side graphics and audio. 

VMWare Horizon
VMWare Horizon (shown here running a Windows desktop) makes it a breeze to do 3D modeling on a $300 USD Chromebook client.

Given the cost of Windows licenses for x86 laptops is >$50 USD, Chromebooks are virtually guaranteed to be the cheaper buy.  While virtualization may add to that cost, it can be viewed as either a temporary solution from a migration standpoint and for some large business may be effectively free thanks to existing VMWare volume licensing agreements.

The new service is being rolled out as a two-part solution -- one part as a free Chrome Web Store client app, and one part as the vendor side paid enterprise VMware Horizon View 5.3 software.  VMWare writes that the client app will be "available soon" for Chrome OS.

Customers adopting the solution will have the option of having Windows servers or desktops on premise, which pipe fully virtualized remote desktops to off-site (or on-site) workers using Chrome OS laptops.  Businesses can alternatively rent virtualized Windows desktops from VMWare vCloud Service Provider Partners (VSPPs), who are going to be offering DaaS as a new enterprise service.

II. Chromebooks Ready to Explode in Sales With Termination of Windows XP

Only around 2.5 million Chromebooks sold in 2013, according to the Interactive Data Corp. (IDC). That's about 1 percent of global sales.  But that figure fails to illustrate the growing threat that Chrome is to Windows in a couple regards.

First, Chromebooks are currently mostly shipping to the U.S. and to consumers, rather than enterprise users.  According to the NPD Group, 1.76 million Chromebooks shipped to American consumers between Jan. and Nov. 2013.  That's over 70 percent of all Chromebooks sold.  Worldwide IDC estimates 314.6 PCs shipped in 2013, but NPD notes that only 14.4 million were sold on commercial (consumer) channels in the U.S. between Jan. and Nov. 2013.  Furthermore, the NPD Group notes virtually all Chrome OS products sold were Chromebooks. 

Lenovo ThinkPad

Now you're looking at the U.S. laptop market, which saw sales of about 8.4 million
units in eleven months of 2013, according to the market research. 

According to the NPD Group, Chromebooks more than quadrupled their eleven month sales from 2012 to seize 21 percent of the U.S. consumer notebook market.  That would account for the fact that Chromebooks are dominating Windows devices in some top online retail sites such as, Inc. (AMZN).

Chromebooks are seeing key inroads in potentially lucrative enterprise markets, such as off-site work devices and school laptop buyers.  With the advent of offline Chrome OS apps and a growing app catalog, which now features nearly 35,000 apps, Chrome is a serious contender.

This year OEMs are testing the waters with new totable Chrome OS mini-PCs (nicknamed "Chromeboxes").  With Microsoft terminating Windows XP sales (which are currently the primary OS loaded on PCs sold in developing markets), international sales of Chromebooks may spike this year, as well.

Windows XP is being yanked from the market in April, a nice supercharge to Chromebook sales.


Detractors will likely continue to point to Chrome's small chunk of global sales.  But with one in five laptops sold last year in the U.S. running ChromeOS, it's folly for developers and consumers alike to ignore this growing threat to the long-standing Windows hegemony.

Virtually every major PC OEM either has a growing stable of Chromeboxes and Chromebooks, or plans to release such products.  Meanwhile, savvy businesses are starting to realize that, as VMWare's fresh focus on products for Chrome OS users illustrates.

Chrome OS is basically free to OEMs (Google gets a cut of the advertising in the built-in browser).  

Source: VMWare

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