The news: Microsoft, the world’s most valuable company, announced an optimized edition of Windows 11 built around the needs of the education market, as well as a new $250 laptop designed to compete with Google’s Chromebooks.

Why it’s worth watching: Microsoft is clearly targeting Google’s Chrome OS with Windows 11 SE, a lightweight version of their OS optimized for cloud management, as well as access to Office 365 and OneDrive education editions. 

• Microsoft has lost a lot of ground to Google in the education market. In context, the US Chromebook market grew 548% YoY in Q1, making Chromebooks the fastest-growing category of PCs in Q1, per Canalys.
• Companies like Acer, ASUS, Dell, Dynabook, Fujitsu, HP, JK-IP, Lenovo, and Positivo have been tapped to deliver Intel- and AMD-powered education PCs aimed at running Windows 11 SE. 

The bigger picture: We previously reported that the chip shortage, high demand for PCs, and a looming price hike pushed Microsoft’s Windows 11 launch into the back seat. 

Refocusing on education helps Windows 11 get traction in a market long dominated by Google and affordable sub-$500 Chromebooks. Google Workspace for Education is used by 170 million students and educators globally.

• For Microsoft and its PC OEMs, making budget educational PCs using older, cheaper, and less powerful processors and components offers a respite from the months-long component crisis.
• Large sales to schools and universities can help push Windows 11 adoption numbers and now gives an alternative to traditional Chrome OS and Chromebook schools.
• Windows 11 in schools also helps Microsoft build loyal users, as today’s students will be tomorrow’s professionals—possibly sticking to familiar OS and hardware.

What’s the catch? Microsoft is coming from behind in educational software, cloud services, and hardware and will likely need to heavily discount its services or offer additional incentives to pry away market share from Google.