It’s clear that Microsoft has got its biggest possible challenger in the name of Google Chrome OS, but the impact of ‘Chrome OS’ may not be limited to Operating System industry only. If ‘Chrome OS’ succeeds in securing OS market share of even 15-20% within a span of 5 years from its launch, it may result in magnified losses to Microsoft in many regards. Here’s how…

It’s not just Windows OS but many other Microsoft products that critically account for Microsoft’s revenue stream such as

• Microsoft Office application suite
• Web browser: Internet Explorer
• Search Engine: Bing.com (earlier Live.com)

All of the three Microsoft properties mentioned above have a straight competition from Google’s product line. For Microsoft Office applications suite, Cloud based Google Docs is the toughest challenger. Against Internet Explorer, Google Chrome is gripping up the roots fast and against Bing.com, Google Search is already holding the hugely dominant position.

Now, all of the three Microsoft weapons have somehow been riding the huge success of Microsoft Windows. Here are the reasons…

• Office applications suite became hugely popular only because it was bundled with Microsoft Windows OS and now considered an integral part of Windows Operating system.
• The only reason behind huge domination of ill-famed Internet explorer in web browser space (IE6+IE7+IE8) is its bundling with Microsoft Windows OS.
• Bing.com has been taking advantage of Internet Explorer’s popularity. As spotted earlier by SearchEngineLand , Bing’s early peak(when it leapfrogged Yahoo!) was a result of an IE6 bug and for general cases, Internet explorer’s default search engine is set to be Bing.com. This has given big boost to Bing’s early growth.

In a scenario where Google Chrome OS, bundled with Google Docs, Google Chrome and Google Search as the default utilities takes over roughly 20% of the OS market share, it would not only be just Microsoft Windows but MS Office, Internet Explorer and Bing.com as well, which are bound to bear the proportional losses.

The same scenario holds for Google as well. If Chrome OS becomes a sustainable success in OS industry , Google’s other major products such as Google Docs, Google Chrome and (already successful) Google Search are bound to enjoy the fruit of success.