Google App Engine: Googzilla’s Slow, Small Baby Steps
April 10, 2008
Google is reasonably transparent–if you know the angle from which to observe the company. Viewed head on, Google sells only ads, generates billions. On one hand, the company races forward with betas, new engineering initiatives, and acquisitions. On the other hand, Google goes ever so slowly in converting its technological advantages into cold, hard cash.
Wall Street looks at the billions in ad revenue. Notes the $400 million from enterprise sales. End of story. Most Google pundits follow the same track. Its Google Search Appliance is not given much respect by the 150 companies competing in the search and content processing market. The scores of products available are quirks or footnotes to the larger story of Google’s ad revenue.
Google App Engine: Tech Pundits Salivate and Howl
The tech pundits pounced on Google’s announcement at its developer conference. You can take your pick from dozens, scores of comments, articles, news analyses, and Web log posts. The screen shot below shows what was on offer at 3 pm Eastern on April 8, 2008, on sector leader TechMeme.com and sector laggard Ask.com’s news service, Big News:
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You would have to spend an hour or more clicking and scanning the links on these two services to find out what Google is doing. Many of the articles are recycling the information Google has made available. The only hitch in the get along is that Google is moving slowly into cloud-based or hosted services. In fact, aside from making a user’s storage persistent, Google’s App Engine is a tentative first step.
Petri Dishes?
For several years, Google has been a Salesforce.com cheerleader. In a confidential report I wrote last year, I documented how Google has cooperated with Salesforce.com. The pay off for Google, aside from a grateful corporate partner and some modest enterprise exposure, has been similar to a student auditing a class. There’s little or no cost, and the student can learn a great deal listening and talking with others in the lecture hall.
Amazon’s Wizardry Out Wizards Google’s Wizards
Google has also watched as Amazon moved into cloud-based services. Amazon’s idiosyncratic approach to secrecy makes it relatively easy for an observer to identify what European graduate students to crack tough engineering problems, learn which San Francisco university makes grad student available to do Amazon research, and what open source software Amazon uses to soften the nasty edges of its traditional relational database and its gracelessness in handling transactions.
Amazon also publicizes reasonably well its developer program. (Google indexes Amazon’s Web site as thoroughly and perhaps more thoroughly than Amazon’s own A9.com service.) Amazon describes its cloud services in news releases, and there are some high-profile start ups who talk about the reliability, cost-savings, and scalability of the Amazon cloud services. Amazon’s investor conference calls are chock full of goodness as well.
But there’s one dark hole at Amazon. I keep looking for more detailed information, and frankly I’m finding only fuzz.
What’s never particularly clear about Amazon is its revenue from its cloud-based services. More important to me, I find it difficult to figure out how Amazon spends its technology money. I’ve been impressed with how much technology Amazon can deploy with its acceptable but not generous tech budget. You can see for yourself that Amazon’s financial statements say that technology expenses run at about $800 million for fiscal 2007 while Google’s investments are more than twice that amount, maybe three times that amount if you assume a slide of Google’s administrative costs are really related to engineering. Almost everything at Google except the jet airplane with the waterbed and the skeleton of the Tyrannosaurus Rex on the Google campus.
What If Amazon Is Technically “Smarter” than Google?
Amazon is either a lot better at engineering and cost control than Google, or there’s real genius at work within the Amazon infrastructure. If I accept this facile observation, it follows that Google is not as skillful as Amazon on three fronts: [a] engineering, [b] cost control, and [c] management.
You’ll have to make your own decision about which of these two Web heavy weights is the better. Do you favor Web retailer Amazon? Do you favor Web ad giant Google? Neither is perfect, and both companies have made life unpleasant for many competitors. Both companies have some wild and crazy initiatives. Amazon, for example, is morphing into an Apple Computer consumer product company. Google has more than 80 products and services that pepper the market place like random lead shot from an shotgun. Management at both companies seems fascinated with activities that are not directly germane to their core business. Amazon’s top dog is into space travel. The Google guys are going green. As the economy teeters like a drunken elephant, both of the companies float serenely over the troubled economic landscape.
With Which Company Is Google Competing?
Google, now in its 10th year, seems to be prepared to complete with several companies. In telecommunications, Google seems to be working–slowly, of course–to exert pressure on AT&T and Verizon in the U.S. telecommunications market. Now that Verizon has “won”, Google is shifting the battle front to under utilized side band. Google also exerts some modest pressure on Microsoft. From my vantage point in rural Kentucky, Google can make a tiny move and watch the giant in Redmond, Washington, over react. The media report Microsoft’s re inventing itself in great detail. The Microsoft-Yahoo saga is a Harvard business case in the making. “One morning Steve Ballmer looked out over the parking lot and took his CFO’s advice. Yahoo is a steal at $44 billion….”
Right now, Google is competing in telco, publishing, video distribution, advertising, and applications for consumers and business. Wall Street insists that Google really is an advertising company and blows off these other sectors as “marginal”.
Keep in mind that Google may be deploying its version of a MIRV (multiple independently targetable reentry vehicles). The MIRV can target Amazon and also Facebook and Microsoft.
Attacking Amazon Slowly?
With the announcement of Google App Engine, another assault appears to be under away. Remember, this is a slow, multi-point assault. Google is not in a big hurry. In fact, the key to Google’s skirmishes is a relaxed, almost laid back approach to corporate war fare. Google seems so diffused. Its actions are tentative. Couple these two characteristics with going slow, and it is very difficult to perceive any direct competitive movement from Google.
To see what Google does requires a version of time-lapse photography. An observer has to look at specific areas of Google activity every week or so over a period of years. Do this, and you see some interesting developments. I talk about slowness and Google’s competitive strategy in my two studies–The Google Legacy and Google Version 2.0, both published by Tetbury, Glou.-based Infonortics, Ltd. I wont’ repeat that material in this essay. I will highlight five aspects of Google’s strategy of going slow and applying oblique pressure.
- Google is patient. It’s focus is on universities, developers, and technical education for anyone who is interested. Amazon has nothing comparable to Google’s “learn to program the Google way” initiatives. These range from material on the Google Web site to a formal tie up with IBM to cultivate programmers in prestigious universities. The Summer of Code is a huge PR coup and recruiting tool. Oldsters can leave Google because the pressure from the influx of young wizards makes the pressure increase on others. Up or out, as the saying goes.
- Google is viral. Google does one thing; for example, announce cloud services for a handful of people. The word goes out, “Sign up or you will be behind.” Without much effort at all, Google creates buzz even though the buzz is for a limited set of tools.
- Google is indirect. The goal of Campfire and Google App Engine is what? If you ask a Google HR person, it’s a great way to identify possible job candidates. Ask one of the enterprise professionals, and you learn that Google App Engine extends the services to the paying corporate customers. Ask a Googler working on App Engine, and you learn that Google is furthering its openness. Each of these is true… sort of. App Engine is the digital equivalent of breaking a rack of balls for a game of pool in the university center’s game room. Hit and see what happens.
- Google operates by generating a steady, increasing pressure in a market space. No single action is directly competitive with a specific product or service. Google went out of its way to say that Google Docs was not a fully-loaded word processing system. Of course it isn’t. The big gun system consists of several Google products and services but these are not bundled in one big bang package…yet. Each move by Google increases pressure on some competitors. Collectively, Google is de stabilizing some business sectors. If a company is negatively affected, well, that’s collateral damage.
- Google is a supra-national company and tough to regulate and see in one, quick glance. In Google Version 2.0, I describe Google as a different type of enterprise construct. Because it is service-centric and anchored in math, It’s hard to pin down what Google is doing, can do, and will do beyond free Web search and ads. The revenue from Google’s ad business is like a super nova. Observers have a tough time seeing outside the light and perceiving detail on the surface of the Googleplex.
If you accept these five characteristics, you can see Google App Engine as just “another brick in the wall”. At some point in time, the bricks will reveal an architectural plan. When the Google has the structure roughed out to its satisfaction, then it will be easier to see what Google’s cloud computing will be.
Can Google become an Amazon? No, I think that if Google’s slow tactics work, Google could end up hosting Amazon’s applications or just buy Amazon. Google-Zon has a nice ring to it. There are rumors that eBay is talking with Google about Skype. When eBay bought Skype, there was no chance that Google would have a piece of that telephony business. Today, Google involvement with Skype is a definite possibility.
Wrap Up
I want to keep the Google App Engine in perspective–that’s Google perspective. Although a small scale initiative, Google’s App Engine is going to have some increasingly significant impact. BigTable (Google’s in house data management / database is part of Google’s App Engine play. I devote a chapter to BigTable in my 2005 study, The Google Legacy: How Google’s Internet Search Is Transforming Application Software.
In my keynote at the Information eContent conference next week, I’m showing a segment of a letter from an anonymous veep at IBM who asserts that Google’s actions are known to IBM and sees Google as no threat to IBM. I spoke with two IBM DB2 professionals in June 2007 and was told, “Google is not entering the database business.” I was at Oracle late in 2007 and was told, “Google has told us that it does not have a commercial role for BigTable.” I wonder what those folks make of Google App Engine? Maybe Mr. Bezos can round up these three companies’ database wizards and share insights.
It’s pretty clear to me that Google is moving into some potentially lucrative markets… just slowly. Almost too slow to notice. I think Amazon may notice. Maybe Verizon has noticed? IBM or Oracle. Nah, not a chance. What about you? Is a Google MIRV headed your way?
Stephen Arnold, April 9, 2008
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