By Alistair Barr
Google Inc. built one of the world's most powerful networks of
data centers, able to handle more than three billion search queries
a day. But it fell behind Amazon.com Inc. in the fast-growing
business of renting out computing horsepower to others.
Now, Google is making a renewed effort to catch Amazon. At a
conference on Tuesday, Google will highlight new offerings that
make it easier for customers to set up so-called cloud services
more quickly.
Google executives say they've learned from past mistakes and are
adapting the company's offerings. It will be a tough sell.
"Five years ago, when we were starting, Google's service didn't
really exist and Amazon was the only complete option," said Adam
D'Amico, director of technical operations at Okta Inc., an
identity-management startup that runs its business on Amazon's
computers. The company is considering Google as a backup. "Google
is the second-place contender now," he added.
Amazon started renting computing power in 2006, in a unit known
as Amazon Web Services. Google unveiled its offering two years
later. But Google initially required customers to write software
similar to the way Google does. Amazon's more flexible approach
proved more popular. It used so-called virtual machines that let
developers use most popular programming languages, databases and
other tools. Google adopted this approach later, but by then it had
ceded the early lead.
Chris Pinkham, a former Amazon executive who founded
cloud-management startup Nimbula Inc., said Google executives
didn't initially see the potential of renting computer power to
others.
In early 2009, Mr. Pinkham said he met with Google executives to
discuss working with Nimbula to compete against Amazon. "Their
answer was 'Why,' " he said. "They weren't convinced that this was
a real business." He declined to name the Google executives.
Greg DeMichillie, director of product management at Google Cloud
Platform, said the company never questioned the value of renting
out its servers. But he said Google initially was focused on
building enough data centers to run its own services, such as the
search engine.
He says Google can still catch Amazon. "As early as 2008 was,
2014 it turns out is actually still pretty early," he said.
Amazon is the clear leader in the field, providing most
cloud-computing units and collecting about one-third of the
revenue, according to estimates from research firm Gartner, which
places Microsoft Corp.'s Azure second and Google third. Gartner
says the market for renting computing resources will grow 35% a
year to $42 billion by 2018, from $9.2 billion last year.
Hurdles for Google include the cost and complexity of switching
providers. Cloud users say the larger, more developed ecosystem of
consultants and developers around Amazon's offerings is a big
advantage.
Amazon's offering has been around longer and "has benefited from
tons of feedback over the last five-plus years," said Javier
Soltero, founder of enterprise email startup Acompli Inc. "That gap
can be narrowed over time, but Amazon truly has a significant lead
here."
Google's big technical move came last year, when it fully
launched Compute Engine, a more flexible service similar to
Amazon's.
Netflix Inc., a big Amazon customer, started using Google's
cloud-storage service late last year. A company spokesman said
Netflix has no plans to replace Amazon for its core cloud
computing.
Google has won some switchers. Allthecooks LLC moved its
recipe-sharing website and mobile apps to Google's cloud about
three years ago. The shift was difficult initially, but a good move
over the longer term, said Rafael Sanches, founder of Allthecooks.
He said Google's more recent changes will make it easier and
cheaper for the site to show recipes to users searching on its
website or apps.
German mobile-app developer Grandcentrix GmbH switched to Google
about two years ago. Ralf Rottmann, the company's chief technical
officer, said Google's servers respond more quickly and allow
Grandcentrix to tap additional computers more quickly than
Amazon.
But Mr. Rottmann said Google remains weak on administrative
tasks like billing. He said it took Google more than two weeks to
find a recent project so Grandcentrix could pay. Google
traditionally focused on engineering, rather than product
management or marketing, he said.
"This is a major problem," Mr. Rottmann said. Amazon and others
"have sorted these things out."
Mr. DeMichillie said Google is working on new developer tools,
including billing. A Google spokesman declined additional
comment.
Early on, cloud computing wasn't considered a top priority
inside Google or staffed with the best engineers, who tended to
work on the core advertising business or advanced projects,
according to two people familiar with company's efforts in this
area.
Google's data centers were custom built to process search
queries efficiently. That meant software and apps had to be written
differently than the norm outside Google.
Google's first cloud service, App Engine, used the company's
internal approach. In contrast, Amazon used more standard
technology.
Google adopted virtual-machine technology for Compute Engine.
That posed another problem because the best Google engineers
weren't interested in a project akin to "going back in time,"
according to one of the people familiar with the situation. The
project was technically difficult, but not in an interesting way,
causing turmoil within Google, the two people added.
Write to Alistair Barr at alistair.barr@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires