Very interesting, this doesn't match my experience, can you say more about how you reason to the claim that Google created a separate 'infrastructure business entity' ?
I am an ex-AWS employee. I can verify that AWS was founded as a new line of business using new servers purchased for AWS. The idea that AWS was started using Amazon's spare capacity is widely repeated but false. Amazon is definitely leveraging their expertise and not their physical machines. Source: I've seen the original pitch deck for Amazon S3.
Isn't it just common sense? The provisioning / capacity planning for a DC has to be done based on peak usage. The usage patterns of the core business and the hosted customers are almost certainly going to be the same -- there's going to be a trough in the night-time, and a peak in the evening. At the time when people want to buy resources, you'll have no spare resources to sell.
The only way the business model of selling spare resources could work is if you found customers with a different usage pattern to fill the trough. That's hard.
Yes, you can find some customers with time-insensitive batch processing that could be done during the night time. But Google and Amazon already do massive amounts of batch processing, and still won't have a flat utilization level over the day.
Or alternatively you could try to flatten out the diurnal variations by making sure there's no geographic affinity between users and the DCs. But that's suboptimal given intercontinental network latencies.
I get Amazon, and I've seen copies of the purported Bezos 'everyting must be a platform' missive, but when I joined the Google platforms group in 2006 and talked with Urs Hoezle about why all this infrastructure for search, we had a lot of interesting and far ranging discussions but he never said "Oh and we're going to rent this stuff out for money too!" Until the original AppEngine project, and that got a lot of push back and discussion inside Google about 'outside stuff' breaking out of the sandbox and into the Google infrastructure, providing outside access was generally viewed (in Urs' organization at least) as dangerous at best for very little value.
The Great Recession hit, Google stopped building infrastructure for a time and focused on utilization, which lead to some awesome improvements in cgroups and i/o scheduling and such, and only after that and some early successes of both AppEngine and other projects which were kind of like it but much less well publicized, did the idea start to be considered as something Google might actually productize.
I could completely see them building infrastructure at this stage which is purely for rent, they have the recipe for building data centers pretty well baked. But I have never heard it put that they started out with that in mind.
Thinking at Google has changed since you left. The more recent IaaS products from Google (from GCE onwards) have relatively little to do with earlier cloud initiatives like AppEngine, other than learning from their experience.
I hope so! :-) this is a pretty fast moving space and its been 4 years. My original question was around jedberg's understanding was that Google "...created their infrastructure businesses as separate entities..." which was different than my experience. I saw it as Google sort of backing into the business rather than creating a new business entity for it (like for example Enterprise was a separate business entity).
