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I've been in IT since it was called DP (data processing). Google will smack Microsoft hard, because all of the hardware manufacturers hate dealing with Microsoft and their annoying software licensing.
If Google is giving operating systems away for free and MS is charging manufacturers $30, $40, $80 or more per PC, Google will win. Companies who have no problems moving manufacturing offshore will have no problems offering a cheaper netbook with a free operating system from a well known company.
Once Google forces MS to offer cheaper, less functional versions of their Windows OS, Google wins, because this will choke off Microsoft's oxygen (money) supply.
MS Office and MS Sharepoint are Microsoft cash cows which will be slaughtered by Google's OS.
Google is never going to offer full operating system support in Chrome for these Microsoft products that is as functional as what Microsoft offers.
In much the same way MS "breaks" competitors products by controlling Windows software compatibility, Google will turn the tables on Microsoft and break MS software compatibility in the Chrome OS, while offering shiny, free alternatives.
What Craigslist did to newspapers, Google will do to Microsoft - take the money out of their equation.
Is this good? Who knows? IT runs in cycles. Yesterday, it was mainframes, communications controllers and dumb terminals. Next came servers, routers and PCs.
Now it's "clouds", the Internet and netbooks/smartphones. Once a lot of important data goes missing from the "cloud", or worse, ends up in the hands of competitors or the NSA, we'll be back to keeping files on our own storage and the cycle will begin anew.