Microsoft Worried By Google Chromebooks’ Momentum in Schools
Critics of Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) line of Chromebooks argue that there’s no way the low-cost laptops can challenge the dominance of Microsoft’s (NASDAQ:MSFT) Windows laptops, but a recent milestone in Google’s education sales show that school administrators think otherwise.
During its earnings call and in a post on its Enterprise blog, Google announced that schools bought more than a million Chromebooks in the second-quarter of 2014. The small, low-cost laptops, which run Google’s Chrome operating system, number among the widening variety of options for educators and administrators seeking to get computers into classrooms.
In the Google post, Bridgeport Public Schools’ chief information officer – and Educational Technology Guy blogger — David Andrade wrote about why his district chose Chromebooks, touching on two key benefits of the laptops: affordability and simplicity.
“I was a fan of the Chromebook right from the start because of their affordable price and ease of use … We could buy three Chromebooks for the price of a single desktop computer and the district’s small IT team wouldn’t have to struggle to keep up with the repairs and updates on aging PCs. We would also save on support time and costs since Chromebooks update automatically.”
Most of the school district’s students don’t have access to computers outside of school, and 95 percent of students receive free or reduced price lunches. Using the school district’s own modest budget, and later some grants as well, the district has purchased thousands of Chromebooks with the eventual goal of deploying them to every classroom in grades 4 through 12. “The Chromebooks have already changed how teachers teach and students learn: there’s less ‘listen-to-me’ lecturing, and more active student involvement in creating their own projects.”
Andrade’s experience with Chromebooks runs parallel to what other administrators have found to be the benefits of adopting the low-cost hardware. In addition to the Chromebook hardware representing an inexpensive option, the laptops can offer school districts significant cost savings on software as well. Chromebooks use Google’s cloud-based services, like Google Docs and Google Drive, instead of traditional alternatives like desktop-based Microsoft (NASDAQ:MSFT) Office, which stores documents on a local drive.
Many school districts now use Google Apps for Education to give each student an email address, plus easy access to their documents from any computer, which makes sharing devices considerably easier. Google recently expanded its Google Play for Education app store to Chromebooks, a big advantage for educators and school districts using the laptops. ZDNet also reports that Google will replace Chromebooks that stop working without additional cost, and that combined with Chromebooks’ ability to update themselves makes a large number of devices much easier to maintain than has been the case with traditional laptops and tablets.
Apple’s (NASDAQ:AAPL) iPad has been a favorite of educators bringing technology into the classroom, but many lessons that require students to create content benefit from the ability to use a physical keyboard, making low-cost laptops a more attractive alternative for many administrators. NPD reported last December that more educators were choosing Chromebooks rather than Apple MacBooks and Android tablets, and Chromebooks represented 21 percent of commercial sales of notebooks through November of last year, driven by the education market.
Just last week, NPD’s Stephen Baker reported that Chromebook revenue has increased more than 250 percent, with Windows products seeing a 15 percent increase and Apple products a 13 percent increase — showing that the commercial market is still strong and represents ample opportunity for companies who offer what commercial buyers, like school administrators, are looking for. Competition is expected to heat up through the rest of the summer, as Microsoft and Apple adjust pricing to maximize the school shopping season.
Chromebooks’ closest competitors price-wise are a $199 HP (NYSE:HPQ) laptop and $249 laptops from Acer (ASIYF.PK), and Toshiba (TOSBF.PK), but those machines are based in Microsoft’s traditional Windows ecosystem and don’t boast the simplicity and accessibility of a Chromebook. Similarly, Chromebooks are considerably less expensive than iPads, and are much easier to manage in large numbers than traditional laptops or tablets. Apple is still catching up to the features that Google has put in place for easy management and updating of the software on large numbers of devices — an endeavor that administrators have long complained about with Microsoft’s systems and their need for anti-virus utilities, software updates, and operating system upgrades.
In the past, Microsoft has run advertisements making fun of Google’s Chromebooks, and recently created a website to convince consumers that Windows laptops are better than Chromebooks. However, the company’s new budget laptops demonstrate that it’s finally getting serious about trying to compete. The move to offer a cheaper laptop is a step in the right direction, but as critics of the Chromebook’s dependence on a Wi-Fi connection note that traditional, full-featured laptops are available at price points similar to Chromebooks’, the comparison isn’t entirely even for the education market.
Schools are generally more interested in simplicity, accessibility, and ease of management than in the high performance and myriad software choices that consumers might prioritize, and Microsoft’s new laptops don’t come outfitted with the education-friendly content and management ecosystem that makes Chromebooks so simple for schools to use. Just offering low-cost hardware won’t be enough to create a truly education-friendly solution. As Google gains momentum in the education market, both Apple and Microsoft should be worried about evaluating their own strategies, as simple bulk discounts may not cut it anymore for administrators looking to purchase education-dedicated devices that don’t require the bigger investment or the maintenance often associated with traditional laptops.
IDC analyst Scott Strawn told Business Insider that the landmark of a million Chromebook sales last quarter demonstrates that the Chromebook is gaining momentum as an alternative to a traditional Windows-based computer: “Education is an extraordinarily important sector that Google is going to want to focus on. There’s still a long way to go but a million sales of Chromebooks does represent an alternative to Windows on a desktop, and that’s pretty meaningful.”
The fact that many schools consider Chromebooks and the Chrome operating system as an alternative to Windows 8 should have Microsoft worried. Last year, 22 percent of U.S. school districts were using Chromebooks, and that figure can reasonably be expected to grow quickly as more educators and administrators consider Chromebooks an attractive and accessible option. Whether Microsoft will be able to defend itself against the trend will depend on whether it can create an education-friendly ecosystem of apps and utilities to accompany its budget hardware — but for the foreseeable future, it looks like Google has a pretty competitive edge on that market.