Many of Microsoft's long-time PC partners—Asus, Lenovo, Samsung, and now HP are offering Chromebooks. Why are they doing this? Because people want an affordable computer that, unlike Windows 8 systems, doesn't require them to relearn everything they ever knew about how to use a computer.
So, what can Microsoft do about this? They can do the exact same thing they did when Linux netbooks tore into their market share in 2008: Bring back an older, better version of Windows. Then, it was XP Home in place of Vista. Microsoft soon followed this with the revival of XP Pro.
If Ballmer is smart—which I seriously doubt—he'll repeat the same trick and revive Windows 7. Today, Windows 7 PCs and laptops are still available, but they're getting hard to find and the selection is getting thin.
If he's not that bright, I expect to see Chromebook sales grow to double percentages for all the Chromebook OEMs by mid-year. It happened to Vista, another dog of a Windows operating system, and I see no reason to expect it won't happen to Windows 8.
Linux-powered netbooks big selling points were that they were better than Vista laptops and cheaper to boot. Chromebooks also have those advantages over Windows 8, but they have more as well. First, thanks to tablets, smartphones, and the related BYOD movement, Microsoft no longer owns the end-user experience. Indeed, Goldman Sachs already has Windows in third place behind Android and Apple.
Netbooks were also, by definition, small devices. That market space is now occupied by tablets. Chromebooks, as HP is showing, don't have to be tiny.
Finally, Chromebooks are the first major cloud-based end-user device. When you buy a Chromebook, you don't get just a standalone device with Chrome OS. You get cloud storage, the Google Docs office suite, Gmail, and on and on. In short, for one low price a Chromebook gives you everything you need from a basic computer.
Even if Microsoft does dust off Windows 7, the Chromebook is going to far from than just a thorn in Windows' side. It's going to be a significant office and home desktop.