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Two of the giants of the technology world have finally come to blows. And the battle may reshape the industry and impact every business that uses computers.

Okay, that sounded dramatic. And Google's move into operating systems has been a bit of a surprise to everyone but the industry's insiders. But the two companies have been at war for a while now. Mashable has a good run down of the competition between the two companies.

Microsoft's efforts to get into the search market have been in the news for months now. First they tried to buy Yahoo! and now they've revamped their own search abilities and come out with the very publicized Bing. Google has 85% of the search market cornered. Bing is competing with Yahoo! for top dog in the remaining 15% of the market.

Google may control the search market, but Microsoft is equally dominant in the operating system market. But Vista (Microsoft's newest version of Windows) is almost a cuss word for many computer users because of it's bugs and shortcomings. Everyone still uses Vista because, well, what else is there? Google hopes that Chrome OS will provide and answer to that question. It helps that Chrome OS is free.

The two companies also compete in the communication software market (Gmail vs Hotmail) and mobile arena (Windows Mobile vs Android).

BusinessWeek provides some details on the Chrome OS announcement:

Late on July 7, Google said it's developing an operating system for personal computers based on its Web browser Chrome and the open-source coding platform Linux. The software, called Chrome OS, will be specially designed to run applications such as e-mail, word processing, and multimedia through the Internet rather than from a user's hard drive.

In otherwords, Chrome will be an operating system for people who believe in cloud computing.

And that is where Chrome OS would change computing, and change the operating system business model. Chrome OS would mean that the cost of an operating system wouldn't have to factored into the cost of a new PC, and that the cost of other software (like Mcirosoft Office) wouldn't have to be factored into the business model because users would rely on cloud-based applications (like Google Docs). Google has made news recently by toying with the idea of releasing premium paid versions of its free apps.

Google and Microsoft have both talked about the release of Chrome OS.