
Google Cloud revenue could be bigger than ads - prostoalex
http://uk.businessinsider.com/urs-holze-talks-google-cloud-beat-search-2015-11?r=US&IR=T
======
funkyy
If one of those giants could make a user friendly service with proper, clean
documentation, then that would be bulls eye. Both AWS and Google are really
bad at this and they assume every potential customer have quite good
technological knowledge (IT college + 1-2 years work experience type of
knowledge) or have all the time in the world to dig in in to countless
instructions and specifications. With a first look I am not sure what type of
server should I buy to set up a simple website - if such a basic information
requires from me to do even simple research - I am out.

This is where DigitalOcean and Vultr are profiting the most - publishing
tutorials, explaining everything and helping to go step by step through the
setup with simple notes and comments.

~~~
Johnny555
If you're just looking for a single server to let you run a website, AWS isn't
really a good fit for you -- and they probably don't want your business. They
(as you found out), aren't really setup to provide you the kind of support you
need.

When you outgrow Digital Ocean and want to set up larger distributed
infrastructure that spans datacenter and regions for high availability (and
you hire the people that can run it), then AWS (or Google Compute Engine,
Azure, etc) will be a better fit for you.

~~~
funkyy
I am actually a startup and time is very precious for me. Within a day I
managed to set 4 server infrastructure on Vultr - I have database server, 2
workers and 1 web facing server. While this is nothing compared to what
companies use AWS for, I will be scaling very quickly. And best thing? I wont
be scaling to AWS.

Lets look at Vultr, that is more complete option compared to DO in my opinion.
You get click away following:

-backups

-ddos protection

-internal IP

-storage servers

-dedicated resources servers

With this I can scale up to rather large size. While this is not enough for
some startups, for MVP and Bootstraping startups that's more than enough. And
frankly once I will grow big enough to hire tech guys, I will just move
everything either to dedicated servers or simply to Rackspace or Softlayer for
premium cloud solution.

The whole point of my comment was - AWS, Google and Azure - all are loosing to
the ones like DO and Vultr in smb market. And while it looks irrelevant now,
what stops DO etc. to scale up and offer more services? I bet if not due to
their enormous growth rate, they would be already doing this but for a year or
two they must focus more on scaling rather than increasing number of products.
Once they are ready AWS/Google will be forced to either buy DO for crazy money
or rethink their documentation, offering, approach, business model etc.

~~~
Johnny555
I don't think AWS is chasing the Small Business market (but they probaby want
the Medium Business market), they are looking for the enterprise market. I
doubt AWS turns much, if any profit on a 4 server implementation when support
costs are factored in. Instead of 100 4 server customers, they'd rather have a
400 server customer.

If I had a small static site that could be served by a few dedicated servers,
I probably wouldn't use AWS myself. But, for me, the power of AWS is the
elasticity - I can scale from 100 servers to over a 1000 servers and back down
to 100 servers in one day - and those servers are distributed across 3
regions. And I have nearly a petabyte of data in S3. If I ran my app on
dedicated servers, I'd need to pay for 1000 servers to handle my peak load,
and I'd need a large petabyte-scale storage array (well several of them for
redundancy).

I'm probably biased in thinking that my use case is more what AWS is seeking
since they provide a good API and powerful tools to enable exactly this use
case.

~~~
funkyy
But that is what I am saying. If there is a startup, it builds infrastructure
that is easy to scale. In a year they end up having 500 servers. Are they
interesting to AWS? Sure. Are they interested to move their infrastructure
from quite good setup that works to completely new provider? Not likely.
Medium sized high growing startups cannot really afford moving to new
infrastructure until they got proper funding.

I can scale Vultr from 100 servers to 1,000 in 1 day as well (most time this
takes is to click things through, not sure if AWS have buy XXX servers at once
but if they do, thats good then).

And once again, I am not saying about small websites/static sites. I am
talking about startups. Companies that can grow XXXX% a month for first few
months, companies that are very careful where they spend money and where they
allocate resources.

~~~
ersoft
Good luck scaling vultr beyond 30 servers. My company is using vultr for over
1 year and we were running about 40-50 servers during peak load. Here problems
start to appear very often:

\- We nearly failed our launch due to failure to increase server capacity
during peak traffic, Vultr didn't have any more instances in that datacenter.
This happened a lot of times and support always answered "We don't know when
we will add more capacity".

\- Periodic network partitions. In the last two months we experienced a lot of
network partitions both on public and private network, some of them lasting
for about 2-3 days, our fleet beeing totally partitioned in 2-3 distinct
blocks. Even new instances started had private network down (100% packet
loss).

\- Technical support. We opened a few support tickets asking when private
network will be fixed. Usually they respond that everything is fine and I have
a configuration issue. I reply with ping/mtr logs and finally they agree there
is a problem (which can be easy tested by themselves anyway). Then, they fix
the issue after 1-2 days. Good luck fixing this yourself when your external
load balancers have no public network connection, and new provisioned
instances don't have it, too :)

\- They changed instance types. The instances started months ago have a
powerful CPU at 3.6Ghz which is shown in all their advertised benchmarks
against DO/AWS/etc. Now they are offering 2.4Ghz CPU which is about 60%
slower. When I told them about this I received an predefined template response
like: "Thanks for your inquiry, we are constantly revising our hardware to
meet customer needs".

\- They increased pricing. First, the instance pricing was 20% lower than on
DO. Then, they changed the price as beeing the same as DO and added a 20%
discount. Then, they removed this discount, just telling everybody that they
ended the discount period, nothing about the price increase :).

So, we are in the process of migrating everything to Google Cloud. We've been
testing it on a staging cluster of 10 nodes and everything works smoothly, so
we are in the process of moving the production cluster too. Be aware of small
instance types (f1-micro and g1-small), they have very small CPU capacity for
production load.

Also, Google offers us a lot of hosted stuff we don't need to manage anymore:
DNS, Mysql, Datastore, Object store, etc. We were using Amazon S3 before, but
peering from other datacenters (eg Vultr Datacenter, DO) sucks, constantly
getting network timeouts, increased latency, etc.

------
powera
First of all, "cloud computing" is going to be a very low-margin business
compared to ads. So comparing revenues doesn't mean very much.

Second, pretty much every Google business other than ads could be described as
"running on Google cloud" for some definition of Google cloud. Apart from App
Engine (which is a completely separate starting point than the rest of GCE and
is really more of a solution to Google internal tools than to enterprise
customers), the initial cloud offering can roughly be described as "what is
the MVP that can run both websearch and gmail". As they gain customers, they
gain features.

(note: I used to work on Google App Engine [and Cloud])

~~~
blfr
Not to go all corporate but cloud offering has a lot of synergy with other
Google projects. They already have this huge infrastructure, and bought a lot
of fibre when it was cheap. Standardizing and renting it out only makes sense.

------
thoughtpalette
Google App Engine has been a pretty terrible experience in comparison to AWS
services.

~~~
secure
Can you expand on details?

Also, why are you comparing App Engine (Platform as a Service) with AWS
(Infrastructure as a Service)? Wouldn’t AWS vs. Google Compute Engine be a
better comparison?

~~~
vox_mollis
Can't speak for the parent, but the entire US offering is hosted at a single
datacenter, allegedly with 3 zones, but there were a couple times during our
evaluation of them when all zones went unavailable.

They really need a us-east and a us-west. Not just for availability, but for
latency-critical applications, too.

~~~
berns
This is not correct. GCE is now (1-Oct) available in the South Carolina data
center (us-east).

~~~
vox_mollis
Ah, I stand corrected. Thank you, it's been a while since we gave up on them.

------
redwood
Does anyone other that Google use GCE for production workloads?

I never meet people who are. My sense is they're a distant #3.

Maybe they don't have the storage issues Azure does? Or maybe they're worse.
Who knows.

AWS has indicated that the network is the bottleneck growing faster at a
slower rate than everything else which has huge implications for anything
network attached.

There is tremendous IP required to be competitive in the space and admittedly
Google may well have built that capability for its own services.

still the number one thing holding Google back has got to be the fundamental
lack of knowing how to be an enterprise oriented business. I suppose that can
be learned just as Microsoft is learning to be a cloud business.

my final concern is their branding seems komplex I don't like Google "compute
engine" as it doesn't flow off the tongue nor does the acronym. Google Cloud
does but it's confused if they want to call Google Cloud compute and Google
Cloud docs and email all cloud offerings... admittedly Microsoft blurs these
lines too. Only AWS can claim to be be the clear compute cloud winner and not
need to hide cloud usage numbers in SaaS offerings also sold

~~~
us0r
>Maybe they don't have the storage issues Azure does?

What storage issues does Azure have?

------
pvg
_[...] despite a later start, Android has become the single most popular
operating system in the world.

"I hope we're going to be the Android of that story," Hölzle said._

This seems like a strange wish given that Apple is making almost all of the
money in that market. Surely their goal can't be 'the most popular but not
particularly profitable cloud offering'.

~~~
simonh
Sure, the analogy isn't very strong, but from Google's point of view Android
is a big success. They want their hosting service to also be a big success,
it's just that the metrics for success are very different.

Google's strategy with Android is not to make money off it directly. It's to
ensure that there is always an open mobile platform with Google services and a
decent browser that has a strong market presence. They're actually doing very
well at that. But the mission statement for cloud services will be different
and presumably include making a profit.

~~~
pvg
'Google makes money from Android indirectly' is a sensible point but it's not
obvious how something similar applies to their cloud services. Or why the
emphasis is particularly on revenue. It sounds like there might be something
missing or confusingly oversimplified in the Business Insider summary.

------
coleca
I've been using both GCP and AWS for awhile now and think they both have their
strengths and weaknesses. AWS has an amazing breadth and depth to their
offering that GCP can't match. GCP has some very nice little features though
such as how easy it is to use their system with the gcloud CLI vs AWS' CLI.
The GCP offerings feel as though they were planned out and have some
overarching standards whereas the AWS offerings feel as though disparate teams
designed them and they tried to standardize them together after the fact.

But GCP has some big gaps esp when it comes to the network and their firewall
vs AWS' far superior security groups. Google has no way to chain rules
together right now which can make configuring a pain. Google also feels as
though it was really meant for everyone to be super user to take advantage of
their web console vs AWS where the amount of ways to segment access is
dizzying.

~~~
eitally
Agreed 100%. I give it a year, though, and I think Google will sort a lot of
those things. Just judging from all the press lately -- a lot of which seems
"solicited", based around PR pieces -- it seems clear they're taking GCP very
seriously now.

~~~
coleca
Yes. It's fascinating to watch these companies evolve. A few years ago AWS was
all about price reductions. Now, they are focused on large enterprises and
most of their R&D is on features that appeal to that set. Google seemed to be
built by engineers for engineers, but now they are starting to really polish
the edges around their offering (for example their new redesigned web console
that was release a week ago or so).

The other advantage Google has is simple no-nonsense pricing. The longer you
run a machine, the bigger discount you get. That's pretty much the extent of
their pricing schema vs Amazon with their whole reserved instances and you
never really know if you're getting the best deal without breaking out Excel
and doing some analysis.

------
CodingGuy
If Google Cloud would offer much cheaper outgoing traffic than AWS, I would
switch immediately. 10 cent/GB is like modern highway robbery...

------
nypar
>(...) there are some announcements coming up that will "remove any doubt."

I guess in the next few months, it will be interesting to see how they compare
to low cost competitors like "Backblaze B2".
[https://www.backblaze.com/b2/cloud-
storage.html](https://www.backblaze.com/b2/cloud-storage.html)
[https://www.backblaze.com/blog/b2-cloud-storage-frequent-
que...](https://www.backblaze.com/blog/b2-cloud-storage-frequent-questions/)

~~~
jo909
Backup/archive storage is a use case where storing your data far away from any
processing power does not matter.

Far away in the sense of bandwidth, latency and transfer costs.

For (nearly) everything else, the opposite is true. Google Cloud stands out in
the PaaS-world because of their excellent internal network.

While an excellent offer in their own domain, Backblaze B2 is not comparable
at all.

~~~
nypar
Thanks for the explanations. Much appreciated.

------
melted
This comes from the same guy who wrote the memo that started Google+. So I'd
take it with a boulder sized grain of salt. 3 years in Google is still having
trouble putting up the table stakes.

~~~
andrewbalitsky
Google tried to compete against Facebook with a "me too" product very late in
the game. And now they're doing the same against Amazon. ¯\\_(ツ)_/¯. What's
next? Google Doors operating system? Google ZuneTunes music streaming?

~~~
wodenokoto
They also took the entire search market with a me-too web search engine, and a
huge chunk of web-mail with a me-too solution. And they do have music
streaming and they do have several operating system.

~~~
andrewbalitsky
Those weren't a "me-too". By all accounts, google search was insanely better
than its alternatives (Lycos/AltaVista/Yahoo). Nobody paralled the speed and
storage of email in the browser that Gmail did at the time of its launch. Is
that "me too"? But you're right, the key here isn't me-too. Android was
arguably a me-too iOS. Chrome was arguably me-too Firefox/Safari. So why /did/
the me-too Google+ flop so impressively against Facebook? What did they learn
from that failure and the Android/Chrome successes to be able to successfully
outperform Amazon in (arguably) it's most important service with a me-too
product?

~~~
soylentcola
Not going to claim this is the authoritative reason for the G+ flop but as far
as I can tell from the user perspective, it came down to a few related issues
with the basic way social networks work.

Probably the easiest way to illustrate is to take the other examples you gave
(search, mail, and browser) and compare to G+. If you're a user and you are
used to Yahoo or Altavista but you hear about this new Google search, you can
easily check out Google search and start comparing how it works relative to
your usual experiences. If you like Google search better, you just start using
Google search as your primary engine. Done.

If you had been user@yahoo.com for years and hear about Gmail, you open a
Gmail account, start sending and receiving email as user@gmail.com and if you
prefer the new service, you set up forwarding on your user@yahoo.com account
and tell friends and family to use the Gmail address. Done.

If you had been using Safari and hear about Chrome, you download Chrome and
use it for a few days. If you prefer your old Firefox setup you leave Chrome
installed or ditch it but if you like Chrome, you just start using Chrome.
Done.

But social networking isn't the same as email or a browser or a search engine.
It's about communication like email but unlike email, you can't just pick
whatever social networking service you prefer and use it. For social
networking (at least in the typical Friendster/Myspace/Facebook way we usually
think of it), you need _everyone_ to be on the same service in order to
communicate with them. Switching services is a lot more work than switching a
browser or a search engine and there's no relatively easy "patch" like
forwarding for email. For a massive amount of people and orgs, Facebook was
the first big social network that they invested their time in. It was the
first one that really got widespread adoption among people who may not really
do much else on the web. It was the one that your mom and your boss and your
neighborhood association and your local bartender all joined.

And when G+ came along, plenty of people (myself included) checked it out
because we like checking out new services and Google has put out several that
are at least competitive if not definitive (gmail, search, chrome, maps, etc).
I won't speak for everyone but I found it much nicer to use than Facebook.
There was no Farmville spam. Sorting the contacts that were displayed on your
feed or who saw your posts was much more granular and visual than Facebook.
The mobile app was much faster and more attractive. It was already tied to
your email, voice/video chat, calendar, and photo/video hosting if you had a
Gmail account. At the time, Facebook didn't have a lot of these features.

But regardless of whether you liked it or hated it compared to Facebook, it
turned out to be irrelevant. Because unlike switching from Yahoo to Gmail or
Firefox to Chrome, switching from Facebook to G+ wasn't something that only
depended on your interest and relative acceptance of change or effort. Because
unless all of your Facebook contacts did the same, it didn't matter which you
liked more. The real limit of these kinds of services is that they're not
interoperable. And if one (in this case, Facebook) gets a "critical mass" of
users who might be resistant to change or switching services, it's nearly
impossible to succeed as a competitor.

The only real way it could succeed is by offering something other than
Facebook (which is what they're going for now I guess) but they will never be
able to succeed as a _better_ Facebook even if they build one.

------
cenal
Google should just buy Digital Ocean and build their cloud around that. I know
it's not on the same level of sophistication as their existing offerings but
who cares? It's so affordable and easy to get up and running with that it's
easily the best acquisition target for them.

~~~
Johnny555
Who cares about the level of sophistication? Customers do.

DO has a nice product for relatively unsophisticated users that just want to
build a website. But when you want to move a large application that spans
hundreds or even thousands of servers and scales up and down to meet demand,
you're not going to run it on an unsophisticated provider.

You're going to want a provider with rich service API's and enough capacity to
let you scale your infrastructure as needed.

Most of DO's customers are not in the target market for AWS or GCE - while
those users provide decent revenue from a small amount of compute resources,
Google and Amazon are looking for the larger corporate customers that are
willing to purchase thousands of compute units and terabytes (or petabytes) of
storage.

------
0xFFC
I am curious what is Oracle going to do , what do you think ? They are going
to as harsh as possible in cloud.Do you think they can take on AWS ? (reading
comments in HN is one of my best resource)

------
liveoneggs
You pay google (ads) to get traffic to your website, where you also pay google
(cloud) to serve it- good for business!

------
entropyneur
> That means that Google can offer ever-increasing lowered prices to customers

Hmm, maybe things have changed since, but last I checked their offerings were
more expensive than any of the main competitors by a nontrivial margin.

~~~
vgt
Google has been the price leader in compute and storage for at least 2 years.
Here's an example:

[http://www.rightscale.com/blog/cloud-cost-analysis/google-
vs...](http://www.rightscale.com/blog/cloud-cost-analysis/google-vs-aws-
pricing-google-cuts-are-first-2015)

