Datacenter Junkie

Michael Halligan

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Who’s Afraid Of The Big, Bad, Google?

By mhalligan on Wed, 06/11/08 - 9:28pm.

Everybody. At least, they should be, few large technology companies are immune to Googlenoia. This is especially true in the hosting market where “Economies Of Scale” has long been the mantra for defining growth potential and competitive advantages.

Essentially, hosting is a commodity. Every hosting company has the same seven, non-trivial problems. Whether it’s a mom & pop VPS provider, or the managed hosting arm of a Tier-1 ISP with geographically distributed datacenters and multi-billion dollar run rates, they succeed or fail by their execution on these seven key problems.

Customer Acquisition
Customer Deployment
Customer Retention
Facilities (Power, Space & Cooling)
Network
Site Reliability
Security

Google already understands and executes on six of these seven problems brilliantly. As for customer acquisition, it’s going to be hard to compete with their goodwill, scale, and unlimited advertising. One might say Google is poised to dominate the Cloud.

Here in Seattle, however, the locals disagree. Amazon Web Services is the “local boy done good”. We like to say that Amazon created the Cloud, and will forever own it despite Amazon’s less than stellar performance thus far. Comparing S3/EC2 with AppEngine is a good way to enthusiastically rally locals in favor of Amazon. .

Unfortunately, as Amazon is well aware, Google wins both in economies of scale, and in engineering prowess. AppEngine is Google dipping their toes into the Pacific in comparison to Amazon swimming in the Puget Sound.

In terms of pure scale, Google could start a price-war today that would make all other cloud companies irrelevant tomorrow. They would only have to re purpose some of their spare fiber, and servers towards the cloud. All of this is before taking into account offering the same proprietary technologies make Google sexy: