Matt Rosoff, an analyst at Directions on Microsoft, said Chrome could be the key piece in Google's effort to convince users to replaced packaged software with web applications.
"This is the potential threat that Microsoft has been worried about since the 1990s," he said. "You've got web apps running inside isolated processes. It really sounds a lot like Google trying to take the web application model and make it more viable as a replacement for the desktop PC application model. This is Google trying to really push applications to the web and make that the way people do computing."
"Expect to see millions of web devices, even desktop web devices, in the coming years that completely strip out the Windows layer and use the browser as the only operating system the user needs," Arrington continued. "That was going to happen anyway, but Chrome plus Gears just made the decision a whole lot easier for hardware manufacturers. Microsoft, meanwhile, is stuck with a bloated closed source browser that they don't even tether to their search engine for fear of more antitrust woes. Google can push their search engine and other web services all day long on Chrome, with no government interference."
NEXT PAGE: More industry opinion on Chrome
Google's new Chrome browser, which was launched yesterday, is more about the search engine's attempts to kill Windows than it is about offering a new browser, say industry observers.
Mike Masnick, president and CEO of IT research firm Techdirt, agreed that Chrome is a key part of Google's strategy to make the operating system obsolete.
"This is probably a lot more about Google trying to help everyone move beyond the operating system market," he noted. "Google knows that the way to beat Microsoft is to become the operating system - the internet. You do that by relegating the actual OS obsolete."
He noted that while Google faces a tough battle against Microsoft, Chrome does offer features that can make it more attractive to users than Explorer.
"A quick look shows that the features it highlights (being able to run apps separately, better memory management, etc) are the sorts of things that allow people to make browser-based apps much more useful, rather than feeling the need to rely on client-side applications," Masnick noted. "People have predicted for years that we're getting closer to a world where all computing can be done over the network, and it looks like Google is trying to push that process right along."
Sheri McLeish, an analyst at Forrester, added that furthers Google's aim to be a "one-stop shop" for everything online users need.
"It ties into their longer term broader strategy around building out a place that is a destination that can leverage their other tools around search," she said. "If they own the browser ... they are increasing the audience to be able to look at the ads that are get served up."
However, she cautioned that even Microsoft has had challenges trying to get users to switch to their newer browsers. "There is an overall challenge to get people to switch browsers," she said. "[Chrome] doesn't mean anything right now. It is a beta.
There is a lot of fanfare without much behind it."
Rosoff added that Google might face challenges getting Chrome distributed.
"Google is a powerful brand, but they do need a way to distribute the browser," he added. "If you look at this long term, I don't know how PC makers are going to be about everything moving to the web."