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When you get right down to it, the impact Google's Chrome OS will have on Microsoft's dominance in the OS market will hinge upon a key phenomenon: the strength of customer inertia amongst computer buyers.

Consumers and corporations are used to Windows. They're familiar with it, they can rely on it to get the job done, they know how to support it, etc. All of these things support the customer inertia that has given solid control of the consumer and corporate end-user OS market to Microsoft.

The challenge Google faces in defeating this customer inertia is significant. Unfortunately, it's a challenge that many companies in many markets face. The reason is simple: most individuals and corporations don't like change. While this is often irrational, there are lots of good reasons for it too.

Let's take an extreme example from a completely different industry: oil refining. There are always lots of new and interesting technologies that pop up in the refining industry but the majority never see real adoption. The reason is simple: refiners are naturally hesitant to use a new and unproven technology in an environment in which failure can result in tens of millions of dollars a day in lost production -- even if that new technology offers the promise of lower costs, reduced labor, etc.

And so it goes with OSes and other computer technologies. Convincing consumers and companies to adopt your product or service can be just as difficult as convincing a refiner to put your widget into use in a facility that runs hundreds of thousands of barrels of oil through it each day. This is true even if your product or service is free because as much as individuals and companies hate to spend money needlessly, they usually hate to get stuck in bad product/service hell even more.

So what do you do? Dealing with customer inertia typically means being honest about the situation and asking some key questions that must be answered if you're to have any shot at overcoming the inertia. Here are those questions.

What's the real value proposition? It's easy to make assumptions about what consumers and corporations want and need. Google, for instance, has made some general assumptions about what consumers want out of their computers and Chrome OS is Google's attempt at delivering. But as I and others have pointed out, there doesn't seem to be a lot of meat behind what Google is doing. Sure -- consumers want their computers to work better. But is delivering speed, simplicity and security in the form of a browser sitting on top of a Linux-based windowing system really a value proposition when core functionality they've come to expect (eg. robust desktop applications, etc.) is stripped away? That's not a value proposition; it's a trade-off.

How mission critical is your product or service? Even if your product or service is cheaper, faster, better, etc., those things may only mean so much when you're targeting a mission critical application. The more mission critical the application, the harder it is for the benefits of your product and service to outweigh the risks perceived in adopting it. Remember: in practice, switching costs aren't limited to dollars and cents; there's a risk component as well, which factors into cost. This is why it's so important to assess worst case scenarios.

What are your key 'points of failure'?
To address those worst case scenarios, put yourself in a customer's shoes and think about all the things that could possibly go wrong when switching over to your product or service. Chances are you'll acquire a much more realistic idea of what you're up against and be able to figure out how to address them.

How accountable are you? Whether an individual or company takes a punt on your offering is often dependent upon how accountable you are if things go wrong. Are you available or on the hook to provide support? Is there a service level agreement or warranty? When trying to defeat customer inertia, accountability is reassurance and that can go a long way.

What's the total cost of ownership? Google Chrome OS may be free. But if you're a company giving it a look, the total cost of ownership certainly isn't. There are the costs of deployment, training, support, and infrastructure/bandwidth (after all, you'll be wholly reliant on web-based applications). In short, overcoming inertia requires taking a look and the big picture and intimately understanding what it will really cost customers to switch and use your product or service.

How can you really push the competition?
If you want to scare entrenched competitors, introducing a better widget alone isn't likely to do it. Pushing the competition is typically much more strategic. What can you do to force the competition to incur extra costs? What can you do to sweeten the deal for potential customers? These questions are generally not answered with "Give our product away for free!"; they're answered with thoughtful evaluation of your competitors' business model and the subsurface needs and wants of potential customers.

In conclusion, when entering a market with entrenched competition, customer inertia is possibly the greatest challenge to overcome. If you don't know what you're doing and aren't asking yourself the right questions, chances are you're going to get rolled over by a freight train.

Photo credit: the mad LOLscientist via Flickr.

Patricio Robles

Published 13 July, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)

Vincent Amari

Vincent Amari, Online Consultancy at Business Foresights Ltd

I think you need to include another, and very impotant point:
User Experience.

The best example I can think of is the iPhone.

As good as the hardware design aspects of the iPhone may be, IMHO it's real success comes from the user experience from the excellent interface to the whole app store concept.

If Google manage to create an OS with a similar user experience, the inertia will take care of itself.

about 7 years ago

Vincent Amari

Vincent Amari, Online Consultancy at Business Foresights Ltd

By the way, shouldn't they be using Android as the OS platform rather than the Chrome browser?

about 7 years ago

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