[exacube]

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). Long-term, it seems like Google could come out the winner, but only if the other aspects of business are also done well (like sales). It seems like Google Cloud is picking up market share, but still far away from the 3 As (AWS, Azure, Alibaba)

[briffle]

Market share is measured in some very, very funny ways. Like Office 365 being part of their cloud division, including when people download and install office on their computer. If Google was to switch things around, and have Ad-words, Gmail, maps, etc, all pay a small, internal fee to google cloud to host their servers own internal servers, I think the market-share conversation would be very, very different.

[hcnews]

Most of internal Google services don't run on Google cloud. Was true as of a couple of years ago and I haven't heard differently from my Google friends recently.

[wmf]

Just reclassify Borg as Google Cloud Internal Edition and boom, everything runs on Google Cloud. This sounds stupid but it's no worse than what MS and IBM have done. Heck, when you are your own customer maybe you could even double-count some revenue...

[techpop10]

FWIW... most of Amazon's internal infrastructure was NOT run on AWS as of a couple of years ago. The idea that AWS was built to support Amazon is a myth. In fact, most of their own IaaS was a very traditional data center built on converged infrastructure. This is why Amazon was up and running when AWS would have a large outage.

[tylerl]

>> Like Office 365 being part of their cloud division, including when people download and install office on their computer.

It's even sillier than that: Microsoft counts (a significant portion of) boxed copies of Office that you buy in a store as Azure cloud revenue. The justification being that buying a copy Office in a box gets you the right to the cloud-based version rather than the offline one you actually bought. Ultimately it's about flexibility.

And in this case, the flexibility to make your Cloud business whatever percentage of your total company revenue it might take in order to claim the market share numbers you want.

[np_tedious]

I think you hit the nail on the head with managed services. In 2006 Google probably wasn't thinking much further than EC2 and S3

[rifung]

But I thought Google's first offerings was App Engine? If anything I think they were overambitious

(I work for Google, opinions are my own)

[milesward]

From early convos, I'd say they saw quite a bit further than that...

[croh]

> I feel they entered the business because they AWS showed the industry that it actually has pretty good margins.

And they stayed because of Azure. Azure was making huge profit when google decided to increase number of data centers. This wouldn't be coincidence, IMO.

[redredrobot]

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