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2 Reasons Why the PC Dies by 2020

By Tim Beyers – Updated Apr 6, 2017 at 9:39PM

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The Chromebook plays into two key trends.

Zero-maintenance computers such as the Chromebook will kill the PC and Windows within 10 years, delivering a punch to the solar plexus of Microsoft's (Nasdaq: MSFT) core Windows business. Apple's (Nasdaq: AAPL) Mac business is no safer, while Red Hat (NYSE: RHT) should continue as it has, since much of its operating system software powers servers.

Sound crazy? Maybe it is, but Google's (Nasdaq: GOOG) plan to outfit businesses with low-cost, zero-maintenance Chromebooks shows signs of a classic technology disruption. Here's a closer look at the two most important factors.

1. The rise of on-demand models
Consider all the ways you consume on-demand computing without even thinking about it:

And that's just a sampling. I'm not even counting Sony's (NYSE: SNE) PlayStation Network, so popular that recent outages resulted in a global uproar. There's also Facebook to consider. More than 600 million people associate themselves with the site. Of that, I'd guess 100 million spend at least four days of every month glued to The Social Network. As consumers, our attitudes have changed. We're consumed with consumption of Web services.

Corporately, IDC estimates that the market for business services delivered via the public cloud will grow from $16 billion last year to $56 billion by 2014. Others say the market will expand to be worth more than $100 billion before the end of that year. Either way, IT departments are committing more funds to deploying software via the Web.

2. Start-ups starting without infrastructure
Venture capitalists appear to be equally bullish on cloud computing. More than once during my recent trip to Silicon Valley with Motley Fool Rule Breakers teammate Karl Thiel, I heard entrepreneurs and corporate insiders talking of how VCs are demanding that portfolio companies run operations in the cloud.

I can't be sure this is broad policy among Silicon Valley venture capital firms, but the stories ring true, if only for efficiency's sake. Subscription models cost less up front, leaving plenty of capital to hire coders and a sales team. Start-ups that produce more also sell more, and in the process position themselves for IPOs and buyouts. So even if there isn't a broad policy, it makes sense for entrepreneurs to go as light as possible.

Now imagine what happens when the handful of these companies that are going to be successful actually succeed. Will they abandon the cloud? I doubt it. If anything, they'll enhance their cloud infrastructure with some in-house gear and maybe some custom software, but even then, it'll be building from the outside in, rather than the reverse.

Meet your new best friend, the browser
Each trend points toward a browser-based, Chromebook-friendly future that prizes zero-maintenance computing for users, and places the IT burden on data-center operators and software developers. The resulting shift stands to alter the entire computing value chain, not to mention long-standing pricing models.

You can imagine Google cheering this idea. Apple is also preparing for this future via iOS devices. But Microsoft, Adobe (Nasdaq: ADBE), and other PC-dependent software makers who like big-ticket sales, are banking the future they're banking on.

Yet what can they do? There will always be software to buy and computers to own, but now that CFOs have proven willing to rent rather than buy infrastructure, it's only a matter of time before the PC gets shoved out Corporate America's back door.

Do you agree? Disagree? Let us know what you think about the future of the PC, cloud computing pricing models, and Google's strategy using the comments box below.

Want to read more about Google and the Chromebook? Add the stock to My Watchlist to get all of our Foolish analysis.

The Motley Fool owns shares of Microsoft, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Google, Microsoft, Netflix, and Adobe Systems, and recommended buying puts in Netflix, creating a bull call spread position in Apple, and creating diagonal call positions in Adobe Systems and Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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