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TheStreet Open House

The HP Chromebook: RIP Microsoft

Having embraced the cloud for CRM and related services, why not embrace the cloud for the next-generation PC architecture as well? This was probably what Meg figured out, ditching Redmond in favor of its corporate neighbor in Silicon Valley, Google.

Ask yourself the question: How many people do you know in the last few years who got a new Hotmail address instead of a Gmail address?

None, of course.

Then, once people get a Gmail address, they start using Google Docs, which is a free competitor to Microsoft Office. It requires no complicated installs, configuration, and everything is saved automatically across all devices.

Microsoft Office can cost everything from $100 or so, to $400-plus. Google Docs is free.

With Microsoft Office also comes a service plan for that PC. Some people pay $250-plus for a 3-year "premium" service plan for a new Windows -- or for that matter Mac -- PC.

Meg Whitman probably saw that -- just like switching to Salesforce.com over some complicated Oracle system that required an army-like on-site staff and eternal expenses like a minor Mediterranean country -- the Chromebook also has its benefits in terms of dramatically lower lifetime cost. People tend to like it when a product costs less money up front, starts and works a lot faster, and then costs perhaps as much as 90% less to operate over the next 3 years.

After Samsung, Acer, Lenovo and now soon HP, who will be next? I don't know, but I can imagine that the major PC makers are now seeing the light. Asus, Sony (SNE), Vizio -- they will all likely join the Chromebook bandwagon within months as well.

Is there any PC company that will not make Chromebooks or Chromeboxes? Possibly. There are always those one or two North Koreas or Cubas at the end of the rope, refusing to let go.

In the meantime, Acer says 5% to 10% of their volume is now Chromebooks. That's after launching the model in November. Surely that counts as one of the fastest product ramps in this industry.

What is needed now for Chromebooks and Chromeboxes is a little like what's needed for (wholly or partially) electrified cars: More models, and more distribution. The average consumer for the most part has never heard about the existence of a Google PC, let alone tried one. Most stores and other retail outlets don't carry them. This has improved over the last six months, but we are still in the embryonic stages, distribution-wise.

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