IN OCTOBER 2007 Jeremy Fennell, Dixons’ group category director, was on a trip to Taiwan meeting computer manufacturers and parts suppliers. “They were all talking about netbooks and saying it might be something we’d be interested in,” he said. Pint-sized, stylish and cheap netbooks were already a growing market in Asia where their no-frills hardware but smart design had proved a hit with a consumers who wanted to surf the web on the go.

Last year Dixons launched Advent, its own-brand netbook. It proved an instant success and Dixons started importing rival netbooks. They are now the fastest-growing category in computers. Netbook sales are expected to top 22m this year, according to iSuppli, an industry analyst.

And while still some way behind laptops in volume, sales are expected to grow 69% this year in the face of a global recession. “They really are the right product at the right time,” said Matthew Wilkins at iSuppli.

The netbook trend is part of a seismic shift in computing that is shaking up more than the manufacturers. Last week the move to ever more mobile computing set the world’s two biggest tech titans on a collision course.

After years of speculation, Google confirmed last week that it is set to launch its own operating system for personal computers. Chrome OS, as it will be known, will initially run on netbooks as a basic system to link users to the web, e-mail and other applications.

Google has already launched a Chrome web browser, which is still a relatively small player. But after its rollout next year Google has bigger plans for Chrome — which some analysts believe could lead to the defenestration of Microsoft’s world-leading Windows software business. When it comes to a clash of the titans, it doesn’t get bigger than this.

It wouldn’t be an exaggeration to say the two firms hate each other. Court documents have revealed Microsoft chief executive Steve Ballmer wants to “kill” Google and “bury” its boss, Eric Schmidt.

The hyperbole Chrome generated in cyberspace was suitably extreme. The Drudge Report broke with the headline DOMINATE: GOOG PLOTS DEATH BLOW TO MSFT. “Google Drops a Nuclear Bomb” on Microsoft, crowed TechCrunch. But for all the hot air Google has a long way to go before it can unseat Microsoft from a business it has dominated for 20 years.

Today more than 90% of the world’s computers run on versions of Microsoft’s Windows programs — it sells over 400m copies a year — and the fearsome Seattle giant will fight to the death to keep its top spot. And while Google has become synonymous with internet search, its record outside its core business is spotty.

At the heart of the battle are two fundamentally different approaches to technology that have driven Microsoft and Google to the top. If either is to best the other, it will probably be the firm better able to incorporate the skills of its hated rival.

LATER this month financial analysts will make their way to Seattle for their annual meeting with Microsoft’s top brass. Last year’s meeting was all about clouds. Given the Google news, this one is unlikely to be different.

“Cloud computing” has been the hot trend in technology for the past few years but, as the rise of the netbook shows, it is going mainstream. Instead of storing all our photos, documents, music etc on a PC at home, people are increasingly allowing these files to be stored remotely — either at home or in a cloud of servers owned by a company like Google — to be accessed anywhere, any time on any device they own.

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