Ad giant Google thinks its cloud biz could be bigger than its adverts

GCP Next Google's third cloud developer conference is winding down, and two things are clear – that Google is willing to spend what it takes to become a major cloud player, and that it has a long way to go.

"We wouldn't be scaling up in this way if we lost money every time we deployed and if we didn't think this is a real business," Diane Greene, the Chocolate Factory's VP of cloud told the press. "We're investing billions in this and it's a long-term business plan."

Just before the conference started, Google announced two new data center campuses and plans for ten more around the world. These places are colossal caverns of computing, packed full of Google's custom-build hardware and a specially hardened and cut-down version of Linux as the operating system.

All through the conference, Google hammered the message that it was scaling out its cloud services to compete with Amazon, Microsoft, IBM and others in the burgeoning cloud sector. Google is a small player in the market compared to AWS, but it's looking for rapid growth and for cloud to become a major money-spinner.

"Cloud is one of the fastest growing businesses inside Google and our growth rate is accelerating on a monthly basis. I think this sector could be larger than advertising," said Urs Hölzle, Google's VP of technical infrastructure. "If you look at the addressable market in the cloud, it's huge and it's still very young – like 2000 when search ads took off."

That's a big prediction – possibly a little too big. But Google wants to take on several sectors of the cloud industry and be to it what the firm is to search. Based on what we've seen this week, the company has a long, long way to go.

Firstly, on strategy, Google is willing to front the capex needed to build out services that can rival Amazon – the clear market leader in cloud hosting. But it's also making a pitch to companies to act as a full-service operations team, allowing customers to sack large chunks of their IT staff by automating devops.

Given that, it was perhaps unfortunate that the firm presented Disney as one of its key new customers. Team Rodent has angered many in the industry for its willingness to bring in cheap overseas labor to cut IT staffing costs, and Google offering to do the same for its cloud business was a little close to the bone for some.

As well as larger enterprises, Google was also heavily pitching small development teams to get them on their side. New cloud software is being made open source to increase availability, and the company is pushing its AI technology to all comers in the same manner.

Google really does believe its AI systems are the special sauce that will get it big breaks. Given IBM's continuing efforts to find a use for Watson, Microsoft's deep Nazi mistakes, and Facebook's talk but no action, Google might well be right on this one.

But there was something missing at the show this year – much talk about what comes in between. Google was making clear pitches to the largest companies and the smallest operators, but there was very little for mid-range companies.

"I'm not seeing anything here for medium firms, like a small chain of gas stations in Ohio," Rik Turner, senior analyst on the infrastructure solutions team at Ovum, told The Reg.

"They're obviously cozy with the big boys, and are putting a lot of effort into wooing developers, which kind of indicated they are still trying to get traction in the rest of the business world."

Google is coming up from behind and, as Stackdriver shows, is willing to play nice with Amazon while flipping the bird to its more immediate competition. But Microsoft and IBM aren't going to take Google's plans lying down and will respond.

In the long run, this is all good news for us, in the shape of cheaper computing. Like Amazon, Google is competing on low cost as well as high availability, and that means cheaper hosting costs for the foreseeable future. ®