Cloud computing threat to Microsoft

Guardian:

Google is to launch a service that would enable users to access their personal computer from any internet connection, according to industry reports. But campaigners warn that it would give the online behemoth unprecedented control over individuals' personal data.

The Google Drive, or "GDrive", could kill off the desktop computer, which relies on a powerful hard drive. Instead a user's personal files and operating system could be stored on Google's own servers and accessed via the internet.

The long-rumoured GDrive is expected to be launched this year, according to the technology news website TG Daily, which described it as "the most anticipated Google product so far". It is seen as a paradigm shift away from Microsoft's Windows operating system, which runs inside most of the world's computers, in favour of "cloud computing", where the processing and storage is done thousands of miles away in remote data centres.

Home and business users are increasingly turning to web-based services, usually free, ranging from email (such as Hotmail and Gmail) and digital photo storage (such as Flickr and Picasa) to more applications for documents and spreadsheets (such as Google Apps). The loss of a laptop or crash of a hard drive does not jeopardise the data because it is regularly saved in "the cloud" and can be accessed via the web from any machine.

...

The NY Times reports that it is likely to take place on a $200 netbook computer.

The global credit crisis may have caused the decline in consumer and business spending that is assaulting the giants of high tech. But as the dominant technology companies try to emerge from this slump, they may find themselves blaming people like David Title just as much as they blame Wall Street.

Mr. Title, a 35-year-old new-media manager at a film production company in New York, has dropped his cable subscription and moved to watching most of his television online — free. While shopping for a new laptop for his girlfriend recently, he sidestepped more expensive full-featured computers and picked a bare-bones, $200 Asus EeePC laptop, also known as a netbook.

“We’ve reached one of those moments in tech history when there are low-priced and free alternatives that are both user-friendly and reliable enough to make the switch,” Mr. Title said. “Then there’s the extra bonus of saving some cash.”

Silicon Valley has been gripped by a growing sense that the economic retreat might do more than depress earnings. There is too much ingrained optimism here to think that the tech sector will not bounce back, stronger than before.

But the fear now is that consumers like Mr. Title, and businesses operating with the same cost-cutting mind-set, will erode the high-margin businesses of the information technology industry — slowing some technologies and companies but giving new momentum to others.

A normally confident Steven A. Ballmer, chief executive of Microsoft, expressed this very fear last week after announcing the company’s first big reduction of its work force. “Our model is not for a quick rebound,” he said. “Our model is things go down, and then they reset. The economy shrinks.”

...

Hey, it happened to the mainframe business about 20 years ago. Microsoft's operating system has been overpriced for some time taking up and increasing percentage of the price for a new computer.

My son already has a netbook with a Linux operating system. It seems a little small for me, but I can see where some one who travels a lot would appreciate its size and weight. The screen as about the size of the original Compaq computer, but this computer is about the size of a trade paperback. Needless to say, you do not get an ergo keyboard with it.