Why Google Android May Fail and Chrome OS Will Fail

Rob Enderle
Slide Show

What Google's Buying

Highlights on a handful of Google's 2010 acquisitions

Android exists on a lot of products and appears to be successful, but the prognosis for the Chrome OS is dropping like a rock. This week, I thought I would go around and discuss Android with some of the folks who build and monitor the products and I got some interesting responses, which I will share here.


There is an interesting lesson playing out in the operating system space that may also showcase the future of the Chrome OS: The OEMs using Android are far from happy and Google's relationship with them appears to actually be getting worse. The problem appears to be with the model that Google is using, coupled with a hiring practice that appears to favor inexperienced young employees with high GPAs. The hiring problem likely affects a lot of their efforts, but the model will likely impact their platform efforts more strongly.


Let's talk about both.


Google's Failing Revenue Model


Slide Show

Top FREE Android Productivity Applications

15 of the hottest free Android productivity apps.

Google's model is to give things away for free and then charge for them after the fact. It sounds brilliant particularly if you reach a position of dominance in search like they have because it creates an economic barrier to entry-you have to buy market share and you won't get to a decent revenue stream until you have significant numbers since ads are driving the revenue. However, that economic benefit is offset by what appears to be a significant problem: When you separate revenue from a product, customer satisfaction really suffers.


For Android this has translated to Google creating products and then modifying them largely in a vacuum because the OEMs aren't contributing to revenue and therefore don't get any real vote. The attitude appears to be that if you are getting something for free then you should be happy with what you get.


This pulls the actual solution provider out of the decision process and that is why the Android products generally feel unfinished when compared to their iPhone, RIM (Research In Motion) and even Windows Phone counterparts, and things don't seem to be improving very quickly.


This isn't a problem that can't be fixed. They could, for instance, create a quality metric driven by the OEMs and measure their people on it, but currently they haven't figured out how to replace money as the primary way that companies measure how well they are actually doing.


Staffing: Exacerbating the Problem


In talking to the OEMs, one of their biggest complaints was that the people they interface with are rude, unprofessional, inexperienced, clueless and generally unable to successfully resolve issues in a timely manner. The level of frustration with some of the OEMs is incredibly high. When confronted with this problem, Google's common response has been that they simply can't find qualified people, which is kind of amazing given the level of unemployment that exists in the world.


This suggests that Google's hiring policy is at fault; the company is known to favor recent graduates who will start at low salaries but have high GPAs, instead of more experienced employees. This exacerbates the quality problems significantly because it means these problems aren't being properly communicated, escalated or resolved. In fact, in talking to the OEMs, you get a sense that much of the team that Google has working on operating systems are actually learning on the job. It kind of makes it even more amazing that they got a product out that works as well as it does.


Wrapping Up: Android is in Trouble, Chrome OS Will Fail


Some of the problems that Google is having aren't unusual. Microsoft had similar staffing issues when they were ramping up to handle enterprise sales in the 90s, and IE6 problems were related to having a free product without a good alternative to revenue for measuring quality. This means that these issues can be corrected, but if one of the primary problems is one of communication, then Google may not yet fully grasp how bad they are. This is good news for challenging products like Windows Phone 7 and bad news for Chrome OS, which will likely have the same issues but be running against Windows 7 and not the mess of aftermarket OSs that Android came out against.


This suggests that Android may slide next year and Chrome OS will not approach expectations. The major lesson here, which encompasses the staffing issue, is that there has to be a strong intrinsic measure of quality that connects the users and the folks paying for the offering to the product. When the user is the end source of the revenue, that can be cash, but when you decouple revenue from the user you have to replace what you've lost. Google didn't do that and the end result is not meeting OEM expectations and Google may not yet realize how bad things are. And this means that Google management's projection that 60 percent of enterprises will switch to the Chrome OS suggests that Google has another problem: complete disconnection from reality.

Subscribe to our Newsletters

Sign up now and get the best business technology insights direct to your inbox.


Add Comment      Leave a comment on this blog post
Dec 3, 2010 6:59 PM Cougar Abogado Cougar Abogado  says:

Rob, while I feel like I often detect a strong level of dislike for Google in your posts (especially in privacy concerns), I am intrigued by your arguments, here.

I consider myself to be quite the Google (particularly Chrome OS) evangelist, and yet I'm impressed with your arguments that performance generally requires tangible metrics, namely $.  (I got my undergrad in business finance, so that might be why I'm inclined to listen closely, here.)

I think you may have hit the nail on the head, as far as OEMs running Google software, yet, as an enthusiast myself, I can see a ton of users simply bypassing their OEMs all together (heck, I'd prefer to do that with HP and Microsoft).

On the other hand, I'll be interested to see how your points about mass adoption play out because, admittedly, I seem to find most people are less inclined to probe their Windows registry (even if I do have very limited knowledge/understanding) than I am.  We can also look to the Nexus One for Google's view of customer support (which I think is quite impliedly a community service project, rather than employee support.)

I've heard a lot of arguments about why Chrome OS will fail, mainly a) it's ahead of its time or b) it missed the netbook boat and TABLETS ARE TAKING OVER!!! of c) it's just a flippin' browser!  I think Google somewhat intends Chrome OS to be ahead of its time (to lead) and take a look at new MacBook Air sales, if we think tablets will eviscerate notebooks completely.  Finally, I think that the Internet will definitely be the default computing platform, soon enough.

In sum, I'm impressed that you go beyond what I feel are very short-lived analyses, based on a few months data, and look ahead to the future.

I think Google would do well to at least take your criticisms into consideration.

Dec 3, 2010 7:30 PM Cougar Abogado Cougar Abogado  says:

Another quick thought, on the 60% attribution link at the end.  NY Times writer Claire Cain Miller said, "Mr. Upson says that 60 percent of businesses could immediately replace their Windows machines with computers running Chrome OS."  I agree with you that it's highly unlikely that 60% will change to Chrome OS.  On the other hand, even Ms. Miller paraphrased Mr. Upson as saying 60% could switch.  I'm substantially concerned about the distinction, regardless of how ReadWrite interprets the paraphrase.

Jan 29, 2013 11:32 AM Snirp Snirp  says:
This article was good fun to evaluate after just over 2 years. Reality checking in: Android commands 60 to 70% market share. Chrome is the top seller on Amazon and several OEM's are committing support: Acer, Samsung, HP and Lenovo. On a business level: Microsoft's experienced employees have successfully alienated OEM by directly competing against them with competitive advantage. Your predictions are now suffering from a "complete disconnection from reality." Reply

Post a comment





(Maximum characters: 1200). You have 1200 characters left.




Subscribe Daily Edge Newsletters

Sign up now and get the best business technology insights direct to your inbox.

Subscribe Daily Edge Newsletters

Sign up now and get the best business technology insights direct to your inbox.