Amazon and Google, Winning the Battle

And, the news continues about amazon and google, claiming these 2 will be the winners as the US Internet matures. Reuters reports on a new study.

SAN FRANCISCO (Reuters) - An Internet analyst for a major Wall Street firm argues in a new report that Google Inc and Amazon.com Inc will be long-term winners, while Yahoo and IAC InterActiveCorp fall by the wayside and eBay Inc becomes a merger target.

Sanford C. Bernstein analyst Jeffrey Lindsay argues in a 310-page report entitled "U.S. Internet: The End of the Beginning" to be published on Tuesday that Google and Amazon are best placed to withstand the current economic downturn.

"We expect two players to continue to perform strongly, Google and Amazon," Lindsay writes. "Both Google and Amazon.com are still racking up annual growth rates in the 30-40 percent range, with only a relatively modest slowdown in sight."

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James Hamilton's Comparison Google Application Engine vs. Amazon Web Services

James Hamilton attended the Google IO conference and posts his comparison of Google Application Engine (GAE) vs. Amazon Web Services (AWS).

Last week at Google IO, pricing was announced for Google Application Engine. Actually it was blogged the night before at: http://googleappengine.blogspot.com/2008/05/announcing-open-signups-expected.html.

The prices are close to identical with Amazon AWS although GAE differs substantially from the AWS offerings.  The former offers a easy to use Python  execution environment whereas Amazon offers the infinitely flexible run-this-virtual-machine model. Clearly the Amazon model costs more to provide so, by that measure, AWS pricing is somewhat better:

Google Application Engine Pricing:

· $0.10 - $0.12 per CPU core-hour

· $0.15 - $0.18 per GB-month of storage

· $0.11 - $0.13 per GB outgoing bandwidth

· $0.09 - $0.11 per GB incoming bandwidth

· From: http://googleappengine.blogspot.com/2008/05/announcing-open-signups-expected.html

Compared with AWS Pricing:

· $0.10 - $0.80 per VM hour (depending upon resources allocated)

· $0.15 per GB-month of storage

· $0.100 - $0.170 per GB outgoing bandwidth

· $0.100 per GB incoming bandwidth

· From: http://www.amazon.com/S3-AWS-home-page-Money/b/ref=sc_fe_l_2?ie=UTF8&node=16427261&no=3435361&me=A36L942TSJ2AJA and http://www.amazon.com/EC2-AWS-Service-Pricing/b/ref=sc_fe_l_2?ie=UTF8&node=201590011&no=3435361&me=A36L942TSJ2AJA.

There are some important differences that make the pricing comparison somewhat biased in a couple of ways. Two important differences: 1) as mentioned above, Amazon gives an entire virtual machine so EC2 is much more flexible than GAE both in that it can run arbitrary applications in arbitrary languages and that it supports all execution models whereas GAE only supports HTTP request/response.  Another key difference is the storage subsystem.  In the numbers above, we’re comparing the Amazon blob store (S3) with the more structured storage model offered by GAE.  The more comparable AWS SimpleDB pricing is considerably higher than the GAE storage pricing. SimpleDB charges $1.50 GB/month in addition to machine usage and network transmission costs.  GAE is offering much more affordable semi-structured storage and the GAE storage model actually supports data types rather than having to force everything to character format.

And, James makes a good point about the Amazon as a retailer vs. google.  Amazon understands as any good retailer, Wal-mart, Costco - the pennies added up, and are important given your low margins.

GAE is still free to start with under 5M page views/month and up to ½ GB storage for free.  Obviously this helps developers get started without strings and that’s a good thing. But, more importantly, it avoids Google from having to go to the expense of billing very small values.  In a weird sort of way, I’m more impressed with AWS billing $0.04 on some accounts in that it shows there billing system is incredibly lean. Scaling down billing is hard, hard, hard.

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WSJ article "The War for the Web", mentions data center 7 times

WSJ has an independent opinion article written by Andy Kessler, The War For the Web, discussing the battle for the future of computing between Google, Microsoft, Yahoo, Amazon, and smaller players IBM, Sun. What caught my attention is in Andy's article he mentions data centers 7 times.

Today, there are several major clouds: Google, Yahoo, Microsoft, Amazon and smaller players IBM and Sun. Can there be more? Sure, but it would require a business model that could not only pay for it, but could rip it out every few years and modernize it. Google's $20 billion Web advertising business gives it the cash flow to do so. Advantage Google.

- Speed. Once you build the cloud, it's all about network operations. Whoever can deliver search results faster, wins. Users only realize this subconsciously, but it's true: Google's dominant share is as much about speed as it is for relevant results. Compare it to Microsoft or Yahoo and you'll see. Google built data centers next to waterfalls so electricity could be cheap enough to help it win the speed war.

The continuing battle between Microsoft and Google will mean fierce competition – adding features, building data centers, cutting deals and spending money on speed and customer convenience. That's the way to move technology forward. It's great to see Microsoft with some fight left in it. Not only hasn't the Internet yet matured, it's becoming an ever-more high stakes game.

This article helps to highlight a Green Data Center is part of a corporate strategy for Google, Microsoft, Yahoo, and Amazon to win the war, they need to be efficient with their resources. The most precious resource is power. Network is second, and water is going to quickly rise as another critical resource.

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Google Green Office Location

Location, Location, Location is key for green data center development, and for office's one of the biggest green efforts is to get people out of their cars and into a location that gets them walking more and the ability to live close to work.

The  SeattleTimes.com has a an article about Google's new 1,000 person campus in Kirkland, WA.

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The effect may be even more profound this time around because of the business. It's Google.

By early next year, some 195,000 square feet of offices along Sixth Street South, on the site of a former Navy depot and door company, will be occupied by Googleites. They will move into three office buildings in a campuslike setting near downtown Kirkland between Lake Washington and Interstate 405.

The development is expected to have major impacts on both the city and the region.

But the implications of Google's expansion go far beyond numbers of workers, said Ellen Miller-Wolf, Kirkland's economic-development manager.

"It's a really big deal," she said. "It's a change in the way of thinking about Kirkland."

Google's move is a transformative step toward the city's own vision of being a community where people can work, live and play all in the same place, she said, and where people walk more and sit in traffic less.

"Most important in the future of a city like Kirkland is driving foot traffic and downtown activity," said Dave Despard, an IBM vice president and member of the Kirkland Downtown Association. "Our biggest push is to attract and retain this level of employers and employees to the downtown."

The city already has taken steps toward that goal in developing high-density housing, she said. The number of multifamily housing units in the central business district jumped from 39 in 1995 to 1,170 in 2007.

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As the Google PR machine works through the positive image of articles like this, let's keep our fingers crossed they figure out a way to work with the press on equivalent articles for Google's data centers.

As more information and solutions move to the cloud, Google needs to create a positive image of its data centers. Secrecy may work if selling to the CIA and DoD, but businesses are going to want to know more information about Google's Data Centers if they are going to move their information in the the Google Cloud.  Amazon.com cloud services have been able to sidestep this issue which creates more pressure on Google's PR team.

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What Changes are in Store for Google's Data Center Infrastructure with New CIO, Ben Fried?

News.com reports on Google's new CIO hire Ben Friend from Morgan Stanley.

Google found its new chief information officer, Ben Fried, on Wall Street--and at least on paper, it looks like a good fit.

Google

Even though Google is a Silicon Valley company thousands of miles away from the buttoned-down brokers of lower Manhattan, the two domains have more in common technologically and culturally than one might think.

Wall Street companies and Google have different objectives, but both have a similar modus operandi. They use lots of cutting-edge computer equipment, often with plenty of in-house customization, to get ahead of the competition.

Most companies buy off-the-shelf software, but Wall Street firms like to write their own. Indeed, one of the areas under Fried's purview at Morgan Stanley was managing source code. Google takes this custom engineering philosophy a step further, building its own hardware, too. That's an important cultural commonality.

"They have a very similar attitude: 'Dammit, we can do it better than anyone else,'" said Illuminata analyst Jonathan Eunice.

This point of being better than anyone else is where it will be interesting what the effects are of Ben Fried's arrival.  How hard is it going to be for Ben to institute changes as an outsider? How good are the Google guys vs. the staff at Morgan Stanley? Does Ben have a doctorate degree?

WSJ wrote about the previous CIO Douglas Merrill.

How do you run the information-technology department at a company whose employees are considered among the world's most tech-savvy?

Douglas Merrill, Google Inc.'s chief information officer, is charged with answering that question. His job is to give Google workers the technology they need, and to keep them safe -- without imposing too many restrictions on how they do their job. So the 37-year-old has taken an unorthodox approach.

Unlike many IT departments that try to control the technology their workers use, Mr. Merrill's group lets Google employees download software on their own, choose between several types of computers and operating systems, and use internal software built by the company's engineers. Lately, he has also spent time evangelizing to outside clients about Google's own enterprise-software products -- such as Google Apps, an enterprise version of Google's Web-based services including email, word processing and a calendar.

Mr. Merrill, who has surfer-length hair and follows a T-shirt dress code, studied social and political organization at the University of Tulsa in Tulsa, Okla., and then went on to earn master's and doctorate degrees in psychology from Princeton University. His education in IT came largely from jobs as an information scientist at RAND Corp., senior manager at Price Waterhouse and senior vice president at Charles Schwab & Co. He joined Google in late 2003.

We sat down with Mr. Merrill to talk about Google's approach to IT. Excerpts:

The Wall Street Journal: What's the structure of the IT organization at Google?

Mr. Merrill: We're a decentralized technology organization, in that almost everyone at Google is some type of technologist. At most organizations, technology is done by one organization, and is very locked-down and very standardized. You don't have the freedom to do anything. Google's model is choice. We let employees choose from a bunch of different machines and different operating systems, and [my support group] supports all of them. It's a little bit less cost-efficient -- but on the other hand, I get slightly more productivity from my [Google's] employees.

WSJ: How do you support all of those different options effectively?

Mr. Merrill: We offer a lot more self-service. For example, let's say you want a new application to do something. You could take your laptop to a tech stop [areas in Google offices where workers can get technical support], but you can also go to an internal Web site where you download it and install the software. We allow all users to download software for themselves.

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