Google Cloud Worth $225B, Deutsche Bank Says • Hacker News Board

Re: Google Cloud Worth $225B, Deutsche Bank Says

#201

Post by lern_too_spel » Sat, Oct 05, 2019, 12:23 AM UTC

dev_dull wrote: post #194

throw_away wrote: post #177

Earlier quoted context omitted.

If we're using stock price as a metric to judge strategy, GOOG's gains have been stomped by AMZN since 2006 by about 8x: https://yhoo.it/30KNk3A By that chart, GOOG's only about 5x-ed since 2006.

If you compare most companies to one of the best-performing publicly traded company in the history of the world, you'll find they'll get "stomped". Who is the say they wouldn't have lost money and done worse? If they would have invested in on-demand streaming video, maybe they wouldn't have been "stomped" by Netflix's 60x return since a similar date?

We're looking at the specific decision of whether or not to have invested in cloud services, which the GP poster said the Google execs had looked into and made a decision that was clearly wrong, which should have been obvious even when they made it. AWS helped Netflix build a competitor to Prime Video, but if Amazon didn't have AWS, Netflix would have just used another vendor.

Re: Google Cloud Worth $225B, Deutsche Bank Says

#202

Post by tootie » Sat, Oct 05, 2019, 12:59 AM UTC

rumanator wrote: post #116

tootie wrote: post #105

Earlier quoted context omitted.

You work for Google or something? I've been in an out of a ton of IT departments and I'm just reporting what I've seen. I've honestly never done a real evaluation of GCP as a whole. Only Firebase. From what I've seen first-hand, AWS is the default choice. Azure has substantial market share, particularly among orgs that are already bought into the Microsoft stack. GCP just doesn't have a strong story to tell. I should…

> You work for Google or something? I've been in an out of a ton of IT departments and I'm just reporting what I've seen. I don't work for google, nor does your attempt to switch to personal attacks change any of the points I made. In fact not only do your assertions sound heavily biased, you now admit that you never done a real evaluation of a service you're criticising. Frankly I don't care if X or Y has more marke…

I didn't say anything about GCP's quality and I don't know why you think I'm demeaning it. I'm just saying I have not seen any IT org that was heavily invested. I have seen a bunch using this or that feature (Firebase or AI/ML services) enough to be mentioned as a client but none that use it as their primary infrastructure. My point being that just because they have an impressive list of clients doesn't mean they're winning anything. And winning is not necessarily correlated to the quality of their product.

Re: Google Cloud Worth $225B, Deutsche Bank Says

#203

Post by swedish_mafia » Sat, Oct 05, 2019, 1:05 AM UTC

lacker wrote: post #43

I was working at Google when AWS launched in 2006. The internal message was, we don't want to build a competitor. We have the technology to compete in this area, but it is fundamentally a low-margin business, whereas reinvesting in our core business is high-margin, so we should keep our infrastructure to ourselves. I wouldn't say the Google strategy was wrong per se - their stock has about 10x'd since then. But it's…

> we should keep our infrastructure to ourselves.

Hilarious, now that we know amazon builds better infrastructure. How they say it? „don’t buy your own hype“!

Re: Google Cloud Worth $225B, Deutsche Bank Says

#204

Post by sterlind » Sat, Oct 05, 2019, 1:21 AM UTC

swedish_mafia wrote: post #203

lacker wrote: post #43

I was working at Google when AWS launched in 2006. The internal message was, we don't want to build a competitor. We have the technology to compete in this area, but it is fundamentally a low-margin business, whereas reinvesting in our core business is high-margin, so we should keep our infrastructure to ourselves. I wouldn't say the Google strategy was wrong per se - their stock has about 10x'd since then. But it's…

> we should keep our infrastructure to ourselves. Hilarious, now that we know amazon builds better infrastructure. How they say it? „don’t buy your own hype“!

(I work for Azure, so I don't really have a dog in this fight.)

Google's cloud seems pretty capable, they're just going through teething. They got to live migration extremely fast, and they seem to have nailed BigQuery and Spanner (albeit not the pricing model.) They will get more reliable.

Internally though, Google was (and maybe still is) a decade ahead. With Borg they deployed their entire infrastructure as containers, running at insanely high utilization via Heracles, and built homogeneous and highly-scalable networking. They invented synchronous georeplication with Spanner. From all accounts, it's a paradise.

It just turned out they were too greedy with keeping their innovations to themselves, too egotistical to believe the rest of the world would catch up, and it was too difficult to productize their infra.

For instance, their containers can only rely on API filters for security, so they couldn't bring Borg to the masses, other than cutting it down dramatically to make Kubernetes and requiring it to run on VMs. It looks like Spanner is also priced by the core, which implies it also can't be safely/compliantly commingled with their internal instances.

Still, for a company playing catch-up and needing to completely change their mindset (remember that initially they didn't even offer VMs), they're doing darn well. Especially now that they've pivoted to GKE/big data/ML and targeting multi-cloud or niche clients rather than enterprises.

Google deserves fame for its infra, it just didn't have good business sense when it came to cloud.

Re: Google Cloud Worth $225B, Deutsche Bank Says

#205

Post by redredrobot » Sat, Oct 05, 2019, 2:24 AM UTC

exacube wrote: post #76

lacker wrote: post #43

I was working at Google when AWS launched in 2006. The internal message was, we don't want to build a competitor. We have the technology to compete in this area, but it is fundamentally a low-margin business, whereas reinvesting in our core business is high-margin, so we should keep our infrastructure to ourselves. I wouldn't say the Google strategy was wrong per se - their stock has about 10x'd since then. But it's…

I feel they entered the business because they AWS showed the industry that it actually has pretty good margins. However, I think the sentiment is probably true that selling VPS is low-margin over the long-term, but i think the margins come from the other bits: global economies of scale, good infrastructure management & practices, and providing their proven internal technologies (ML/AI, managed distributed services).…

My understanding was that market share is: AWS > Azure > GCP > Alibaba

Re: Google Cloud Worth $225B, Deutsche Bank Says

#206

Post by SpicyLemonZest » Sat, Oct 05, 2019, 2:30 AM UTC

wolco wrote: post #197

SpicyLemonZest wrote: post #103

Earlier quoted context omitted.

I'm not sure what "speculation" is meant to imply here. Deutsche is explicitly giving a speculative valuation here; they speculate that Google Cloud will reach $38 billion of revenue in 2025. But that's not some pie-in-the-sky impossible dream; AWS brought $25B (and operating income of $7B) last year. There are two direct responses to your last question: all parts of running a server farm are hard, and a cloud platfo…

The valuation doesn't add up. At 38B revenue we can assume 12B operating income so 20x profit. But your telling us today it is worth 225B not in 2025?

I can't find a copy of the analysis (it's unclear to me whether it's even public). But presumably Deutsche either thinks 38B is an an almost sure thing, or expects the business to grow even more after 2025.

Re: Google Cloud Worth $225B, Deutsche Bank Says

#207

Post by redredrobot » Sat, Oct 05, 2019, 2:33 AM UTC

solatic wrote: post #122

chillydawg wrote: post #68

Earlier quoted context omitted.

It is today, but it won't last. As automation tooling gets better the barriers to entry drop and competition kicks in and lowers prices. You can see it already: Aws are constantly lowering their prices. It's not just to be nice, they're competing hard.

Core infrastructure may or may not be low margin (traffic rates are nearly pure margin designed to create a moat and may or may not eventually be challenged by regulators as anti-competitive; it remains to be seen). But the lion's share of cloud margin comes from value-added managed services e.g. AWS Lambda and GCP PubSub, which are exceedingly more expensive than their underlying infrastructure but not nearly so exp…

I don't think your statements about (a) where cloud margins come from and (b) Lambda vs VM cost are correct.

Re: Google Cloud Worth $225B, Deutsche Bank Says

#208

Post by erichurkman » Sat, Oct 05, 2019, 2:36 AM UTC

my_usernam3 wrote: post #178

q3k wrote: post #152

Earlier quoted context omitted.

I'm really glad they took the opportunity to change the APIs and abstractions around. Some of the ones exposed by AWS are absolutely insane. Not to mention some of the paradigms: regionalized dashboards/endpoints, the mess that is EC2Classic/VPC, lack of projects for compartmentalization/namespacing ... a lot of those APIs also leak internal implementation details of their products, and trying to match them would be…

> AWS just seems like an underdesigned mess of loosely coupled components implemented by siloed teams That was my experience as well. It felt like they never included any UX person throughout any of the decisions. Their naming convention alone always seemed confusing to me, although it does seem to be improving.

Applies: https://twitter.com/QuinnyPig/status/1173389969454288896

Re: Google Cloud Worth $225B, Deutsche Bank Says

#209

Post by redredrobot » Sat, Oct 05, 2019, 2:46 AM UTC

verdverm wrote: post #169

Google is dumping money into their enterprise programs. They hired some experienced people to run it. Their offerings are soooo much better quality than AWS. Try getting a GPU vm with a local SSD on AWS, does not exist... In GCP I can set custom values for CPU, MEM, GPU, SSD. Try to ssh to a machine, and then one without a public network connect. Google is the only provider with a good portal to their partner program…

> a GPU vm with a local SSD on AWS, does not exist

I'm pretty sure that's not true. I believe you can get V100s or T4s with local NVMe SSDs.

Re: Google Cloud Worth $225B, Deutsche Bank Says

#210

Post by sdan » Sat, Oct 05, 2019, 2:49 AM UTC

dglass wrote: post #55

sdan wrote: post #6

Not surprised. If AWS can't make their UI a bit more user-friendly (especially for beginners) and remove their AWS Educate for students (which by the way is horrible), I think a good chunk of developers and possible institutions might move over to GCP. Other that UI, I think GCP in some instances may be cheaper (pretty sure I saw some instances that were cheaper... although I can't say for sure).

I find the GCP dashboard very confusing to navigate, and the material design does not help the information hierarchy one bit. I'd argue GCP is just as bad, if not worse, than AWS for beginners. I'm already intimately familiar with the AWS dashboard. Just because GCP's dashboard has a bit more polish is not enough for me to switch. Even slightly lower prices may not be either.

Agree with the docs part. As I've explained in previous comments, can't really differentiate either AWS or GCP. But personally I'd say GCP is very slightly better; not sure exactly why, but probably due to the fact it's a bit more organized than AWS's dump that goes edge to edge with bad fonts.