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> Google's opportunity cost from renting out its hardware was so huge that it'd never make sense to do so, because ads was a superior business model to anything

> Google's opportunity cost from renting out its hardware was so huge that it'd never make sense to do so, because ads was a superior business model to anything else and machine demand was infinite. This seems reasonable though. Cloud is much lower margin than ads, so what’s the proposition to move into it? Just because I’m good at something doesn’t mean I should do it. I make a mean scrambled egg, but don’t want to go into that business.

native_samples 5y ago
Good question but there must be one, because Google very much wants to win in cloud.
- prepend 5y ago
  It doesn’t seem like Google wants to win. They’ve been distant #3/4 for 10 years. If google wanted to win, I’d expect them to be more competitive. I don’t really use GCP much but it seems like a hobby product line. For example, they only have $4B revenue last quarter with almost $1B of losses (9% of Google’s revenue) [0], Compared to AWS’ $13.5B (12% of Amazon revenue) and Azure’s $15B (not sure what percent as this number includes lots of things that I don’t really consider cloud). [0] https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-cloud-market-share/ https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-clou...
  - native_samples 5y ago
    It's hardly a hobby given the huge amount of features they've added to it. It's not winning, but that's not due to lack of trying. Probably more due to lack of enterprise nous and a bad reputation in certain areas.
vl 5y ago
Well, Urs actually gave answer at all-hands meeting, when everything became “cloud, cloud, cloud”. Clouds grow so fast, that Google would eventually stop being hardware purchaser #1 in the world, loose best discounts, which would make Search/Ads unprofitable. So there was no choose but to join cloud arms-race. But of course it was too late. It was essentially IE moment for Google.

native_samples 5y ago

Good question but there must be one, because Google very much wants to win in cloud.

prepend 5y ago
It doesn’t seem like Google wants to win. They’ve been distant #3/4 for 10 years. If google wanted to win, I’d expect them to be more competitive. I don’t really use GCP much but it seems like a hobby product line. For example, they only have $4B revenue last quarter with almost $1B of losses (9% of Google’s revenue) [0], Compared to AWS’ $13.5B (12% of Amazon revenue) and Azure’s $15B (not sure what percent as this number includes lots of things that I don’t really consider cloud). [0] https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-cloud-market-share/ https://www.parkmycloud.com/blog/aws-vs-azure-vs-google-clou...
- native_samples 5y ago
  It's hardly a hobby given the huge amount of features they've added to it. It's not winning, but that's not due to lack of trying. Probably more due to lack of enterprise nous and a bad reputation in certain areas.

vl 5y ago

Well, Urs actually gave answer at all-hands meeting, when everything became “cloud, cloud, cloud”. Clouds grow so fast, that Google would eventually stop being hardware purchaser #1 in the world, loose best discounts, which would make Search/Ads unprofitable. So there was no choose but to join cloud arms-race. But of course it was too late. It was essentially IE moment for Google.