The HP Stream is a low-cost, Windows-based alternative to Chromebooks. Here's how Microsoft is going to compete with Google for connected computing market share.
Google's Chromebooks are largely responsible for growing demand in the connected laptop market. After Google worked to prove the concept, consumers were the first to buy into the idea of a "bare-bones" machine, later followed by education and enterprise customers. Google seemed to be the lone dog in the fight, until now.
In September, HP announced the HP Stream notebooks and tablets, a set of thin client devices that operate similarly to Chromebooks, but rely on Microsoft's OneDrive and Office 365 services.
HP Stream users will get 1TB of Microsoft OneDrive and Office 365 Personal for one year, plus a $25 gift card for apps or games for notebooks and a Skype allowance for tablets. Certain models of the notebook and tablet give users an "optional 200MB of free 4G data each month with no annual contract for the life of the device," according to the HP press release. The Stream devices will be available in November with notebooks starting at $200 and tablets starting at $100.
Chromebooks have done well with SMBs and they are gaining traction with mid-market customers; but there is still room for Microsoft to compete, especially in the enterprise where Chromebooks have struggled to gain real traction.
To compete in the enterprise, Microsoft must begin by leveraging its brand. Recent business moves show that Google has purported to be working on improving the security of its products and devices but, in some circles, the name Google is still synonymous with the cloud, which means lack of control for enterprise administrators.
Microsoft, on the other hand, has a long-standing position as one of the most trusted enterprise technology brands. According to a recent research report conducted by Forrester Research, Microsoft is considered even more trustworthy than Apple. Although, that might not mean as much after the recent iCloud breach that lead to the leaking of celebrity photos. Still, Microsoft has long established itself as a "friend to the enterprise," and it needs to lean on that identity to gain ground with Stream.
Google has made strategic choices in regards to the vendors it chooses for Chromebooks, and Microsoft seems to be on the same path. The choice of HP as a first partner should serve Microsoft well as HP brings its own strong relationship with the enterprise into the equation.
Perhaps one of the biggest threats to Google is the potential for Stream and other Microsoft-connected devices to increase the use of OneDrive and Office 365. One of the biggest complaints for businesses and schools in adopting Chromebooks is the lack of compatibility between legacy Word documents and Google Docs.
File conversion in Google Drive is getting better, but Office 365 offers the option to avoid conversion all together. This is especially true for financial departments where Excel is so deeply ingrained.
Thin clients such as Chromebooks and Stream offer large companies a way to cut down on IT costs surrounding imaging and app deployments. While not parallel to a traditional Windows system deployment, Stream devices will offer a familiar environment and ecosystem that could lead CIOs and CTOs to choose Microsoft devices over Chromebooks when choosing a set of devices to deploy.
Employees that are used to the Microsoft's Office suite will be comfortable using Office 365, if they aren't already using it to begin with. Google Apps offers a powerful set of apps that perform just as well, if not better, for business purposes; but they typically require extra training or education of users and IT staff who aren't familiar with them.
The last point for both parties to consider is pricing. HP's $199 starting price point makes it competitive with some of the most popular Chromebooks, such as the Acer C720.
Considering subscription models, Google has incentivized its pricing for businesses, schools, and students. For Microsoft to compete, it will need to make the same incentives, perhaps offering its software at a lower price across the board.