3 ms·

Assuming you are correct and Google invested heavily that seems to rule out strong profits from GCS at this time. So what exactly is it that Google is doing no

Assuming you are correct and Google invested heavily that seems to rule out strong profits from GCS at this time. So what exactly is it that Google is doing now that will lead to long-term profitability in a business where revenue is closely tied to scale? Can Google really prevail over Amazon (first mover) and MS Azure (great enterprise chops + Office) based on capital investment alone? Amazon and Azure are not standing still. Both also have an order of magnitude advantage in market share. Finally GCS is not strong in the big growth markets in Asia. For my money Google's best bet is to stay in the game and hope something alters the market in a way that weakens their competitors. That assumes they can double down on the investment to remain viable and recognize the opportunity before others do.

crazygringo 8y ago
First, Google doesn't need to prevail, it just needs to get a sizeable enough chunk of the market to make a profit. E.g. even if it's an eternal long-term 33% to AWS, Azure and GCP, it's a rational investment for Google. The market's big enough. Second, Google is clearly betting that its scale will indeed give it a benefit -- the scale of its data centers which include all of Search and everything else (e.g. raw costs for computing and storage being cheaper than competitors), the scale of its investments in machine learning which it makes available on GCP, the scale of its investments in private networking and security, etc. Part of Google's pitch is that it's providing Google-class security and networking which AWS and Azure simply can't match.
- gaius 8y ago
  even if it's an eternal long-term 33% to AWS, Azure and GCP, it's a rational investment for Google They would need to grow their marketshare ten-fold to be in that position, and they would need to defeat Alibaba on its home turf. It’s not going to happen. GCP could possibly drive IBM and Oracle out of the cloud market, but even that’s unlikely.

crazygringo 8y ago

First, Google doesn't need to prevail, it just needs to get a sizeable enough chunk of the market to make a profit. E.g. even if it's an eternal long-term 33% to AWS, Azure and GCP, it's a rational investment for Google. The market's big enough. Second, Google is clearly betting that its scale will indeed give it a benefit -- the scale of its data centers which include all of Search and everything else (e.g. raw costs for computing and storage being cheaper than competitors), the scale of its investments in machine learning which it makes available on GCP, the scale of its investments in private networking and security, etc. Part of Google's pitch is that it's providing Google-class security and networking which AWS and Azure simply can't match.

gaius 8y ago
even if it's an eternal long-term 33% to AWS, Azure and GCP, it's a rational investment for Google They would need to grow their marketshare ten-fold to be in that position, and they would need to defeat Alibaba on its home turf. It’s not going to happen. GCP could possibly drive IBM and Oracle out of the cloud market, but even that’s unlikely.