While the bulk of the attention at Google I/O last week, at least in terms of keynote airtime, was devoted to improvements to user-facing projects like Android and Chrome, the Cloud team had announcements of their own. Most obviously, the fact that the Google Compute Engine (GCE) had graduated to general availability. Both because it’s Google and because the stakes in the market for cloud services are high, there are many questions being asked concerning Google’s official entrance to the market. To address these, let’s turn to the Q&A.
Q: The first and perhaps most obvious question is why now? Or more critically, why did it take Google so long for GCE to GA?
A: The flip answer is to point to how long Gmail was in beta. Google, historically, has had no reluctance to preview their services to a limited audience, a necessary precaution in many cases given their scale. The way one story goes, Google was forced to scramble for mere bandwidth following the release of Google Maps, having substantially underestimated the overwhelming demand for what was, at the time, a revolutionary mapping product. At scale, even simple things become hard. And delivering IaaS services, while a solvable problem, is not simple.
All of that said, Google’s late entrance to this market is also likely to be the product of a strategic misstep. Consider that Google App Engine – the company’s PaaS platform, and one of the first to market – has been available since 2008. It has been abundantly clear in the years since that, while PaaS may yet become a mainstream application deployment model, IaaS is more popular by an order of magnitude or more. Whether it was Google’s belief that PaaS would eventually become the preferred choice over IaaS, or whether Google had questions about their interest or ability to execute effectively in that type of a business, the fact is that they’re seven years late to market.
Q: So is it too late?
A: Surprisingly, the answer is probably not. Google’s delay has certainly created an enormous hill to climb; Amazon has spent the past seven years not only inhaling the market, they’ve actually been able to sustain a remarkable pace of innovation while doing so. Rather than being content with a few core services, Amazon has continued to roll out new capabilities at an accelerating rate. And in a departure from traditional IT supplier practices, they have lowered their prices rather than raised them. Repeatedly.
All of that said, two factors are in Google as well as other would-be Amazon competitors’ favor. First, far more workloads are not running in public clouds today than are. This means that as impressive as the growth in the cloud sector has been, a great deal of oxygen remains. Second, cloud infrastructure is by design more ephemeral than the physical alternatives that preceded it. It’s far more difficult to decommit from thousands of physical machines than cloud instances. While migrations between public clouds, then, are not without complication or risk, they are more plausible than customers swapping out their on premise infrastructure wholesale for a competitor.
So while Google’s delay was costly, it is unlikely to be fatal.
Q: Is Google serious? Or are these cloud services just more Google experiments that will be shut down?
A: It may be natural to ask this question in the wake of the house cleaning Google’s done over the past few years, shuttering a variety of non-core projects. There is no real evidence that this concern is legitimate regarding the Google cloud offerings, however. In App Engine, Google has technically been in market for years, and in that time, they have ramped their involvement up, not down. GAE has expanded its capabilities, multiple datastore options have been launched, GCE has been previewed and then released as a production product.
Google also probably cannot afford to sit this one out. A world in which an increasing number of compute workloads run on infrastructure maintained by competitors like Amazon or Microsoft is a multi-dimensional threat to Google’s business. Besides infusing those businesses with capital that can be used to subsidize efforts to attack Google in areas like mobile, owning customer relationships via cloud sales may allow competitors to cross-sell other services, such as collaboration or even advertising.
For those still not reassured, it’s worth noting that – like Amazon – Google is compelled to maintain large scale infrastructure as part of its core business. While its primary revenue source is obviously advertising, Google is at its core an infrastructure company. Which means that reselling infrastructure is not exactly a major departure from its business model.
Q: So Google’s serious about the cloud market – are they equally serious about the enterprise market?
A: The answer to this depends in part on how you believe cloud is currently being adopted by enterprises. If you’re of the belief that enterprise cloud adoption will resemble that of traditional infrastructure, Google does not currently appear to quote unquote serious about the enterprise market. Certainly they are not offering at present the certification program, for example, that Amazon is in an attempt to court enterprise buyers. Google’s recent standardization on Debian, in fact, could be construed as an active rejection of enterprise requirements; CentOS, at least, would represent an opportunity to market to current Red Hat customers.
What if, however, you believed that cloud adoption was proceeding not from the top down but rather the bottom up? What if you believed that developers were leading the adoption of cloud services within the enterprises? How might you optimize your offering for developer adoption? Well, you might begin by standardizing on the preferred distribution of developers. Which would be, according to the research of my colleague Donnie Berkholz, none other than Debian-based distros. You might price competitive with the current developers’ choice, Amazon, and go one step further to offer sub-hourly billing. And you’d obviously expose the whole thing via a single JSON API, accessible via a command line tool.
The punchline, of course, is that Google has done all of the above. In a perfect world, you would build cases for both developer and enterprise, as Amazon has done. But playing from behind, Google appears to be betting on the developer rather than pursuing the features that would appeal to traditional enterprise buyers.
If you think developers are playing a deciding role with respect to adoption, then, within the enterprise, you can argue that Google is serious about that market. If you believe that CIOs remain firmly in control, then no, Google is not serious about the enterprise.
Q: What was the most significant cloud-related announcement from I/O?
A: The answer depends on timeframe. In the short term, the addition of PHP support on App Engine dramatically expands that platform’s addressable market. Likewise, the more granular pricing will potentially lower costs while allowing developers the ability to experiment.
Over the longer term, the introduction of the non-relational Google Datastore gives GCE an alternative to Amazon’s Dynamo or SimpleDB, as well as the countless other NoSQL databases saturating the market, and a complement to their existing BigQuery and Cloud SQL (MySQL-as-a-Service). Given the massive popularity of non-relational stores, this announcement may be the most significant over the longer term.
Q: How serious a threat is Google to Amazon’s cloud? Or Microsoft’s, or Rackspaces for that matter?
A: I argued in my 2013 predictions piece that Google would be the most formidable competitor Amazon has yet faced, and nothing that’s occurred since has caused me to rethink that position.
In the short term, neither Google nor anyone else will challenge Amazon, whose dominance of the cloud is substantially understated, in my opinion, by this 451 Group survey indicating a 19% market share. The Register, meanwhile, points to the disparity in available services. Amazon is to the cloud what Windows was to operating systems and what VMware is to virtualization, and it would be difficult to build the case otherwise.
Over the medium to longer term, however, Google has economies of scale, expertise in both software and infrastructure, and existing relationships with large numbers of developers. More specifically:
[Google] has the advantage of having run infrastructure at a massive scale for over a decade: the search vendor is Intel’s fifth largest customer. It also has deep expertise in relevant software arenas: it has run MySQL for years, the company was built upon customized versions of Linux and it is indirectly responsible for the invention of Hadoop (via the MapReduce and GFS papers).
Google’s a fundamentally different type of competitor to AWS, and there are signs that Amazon recognizes this.
Which is what will make the months ahead interesting to watch.
Disclosure: Amazon, Microsoft and VMware are RedMonk clients, Google is not.