Has Google Declared War on Enterprise IT?

One of the latest tech rumors is the Google (GOOG) open source hardware router. One has to begin to wonder if cloud computing is really simply a codeword for Google computing.

Watching Google move from search and advertising to a vision assault on enterprise IT is nothing short of spectacular; it is the equivalent of leaders in the automotive or airline industry threatening to reshape the oil and gas industry. The closest example I can think of is Southwest Airlines’ aggressive purchase of fuel hedges:

Southwest Airlines (LUV), for example, enjoyed more than $4 billion in hedging proceeds over the last five years and paid far less than rivals because it locked in lower fuel prices while rivals went unhedged.

- Kyle Peterson, Reuters, December 2008

IT is obviously a critical factor of production when it comes to search and online advertising, yet cloud computing is a much bigger challenge than merely building data centers in small towns with tax incentives and power. And I think that discussion is only just beginning.

Reliability and security issues have been raised, and now others are talking about the network infrastructure issues. The network discussion has led to a blog and a live, streaming panel this week at the San Jose Fairmont (my employer Infoblox is a sponsor).

Cisco (CSCO) and Infoblox are driving the panel, and for good reason; Infoblox solutions help to lower the operating expenses of enterprise networks, especially the large and complex networks that tend to be Cisco gear.

Yet despite cloud reservations (including comments by Larry Ellison), Google computing has been all of the buzz since the publication of The Big Switch, Nicholas Carr’s brilliant follow-up to Does IT Matter?, which also suggests that the world of enterprise IT is facing more than ample commoditization pressures.

In the title of his brilliant book, Carr goes so far as to suggest that Google is today’s equivalent to Edison, a towering figure (to say the least) in electricity: “The Big Switch: Rewiring the World from Edison to Google.” I think Google computing (at a minimum) is implied.

Google is really Carr’s poster child. And I think that pits Google against every major IT vendor, including Cisco and Microsoft (MSFT). While Microsoft battles back with its own cloud computing OS it is clearly struggling with scale and availability issues for software distribution over the internet:

We know this is a bit of an apples-to-oranges comparison: Microsoft's FTP servers are not its Azure servers, and Amazon's (AMZN) EC2 servers are not its e-commerce ones. But both companies knew for certain a usage spike was coming, and then both failed to meet the challenge.

We're not negative on cloud computing -- on the contrary, for a lot of companies the idea makes great sense, and we're bullish on the idea. But we note the promise of some cloud evangelists that storage, bandwidth, or computing needs can "expand forever" seems misguided. There's no such thing as infinite scalability.

- Eric Krangel, Silicon Alley Insider, Jan 2009

I think Cisco’s Gourlay and Oracle’s (ORCL) Ellison have both raised well-grounded reservations, and Silicon Alley’s Krangel has discussed previous cloud reality checks. So perhaps in 2009 cloud will go from "ice cream castles" ala Mitchell and Oltsik to addressing fundamental issues, including whether or not the network infrastructure can support the Carr/Google cloud vision. As Cisco’s Urquhart has pointed out at CNET, cloud has plenty of maturing to do. It is likely to take many shapes, and perhaps even form a few ice cream clouds, at least in the minds of the Carr “passionistas”.

Disclosures: Long Cisco. I am a senior director at Infoblox.

Comments

[SAF:]

Amazon has been doing this for a number of years. They have EC2 service and S3 storage among many.

Cloud computing will grow simply because for many companies it will be much cheaper than hosting their own solutions.

Jan 12 05:56 AM

[GNESS:]

Dana Gardner this AM at ZDNET: Time to rip out your legacy IT: blogs.zdnet.com/Gardne...

Jan 12 12:00 PM

[desicon:]

Not only have they declared war they have the moral code and the arsenals to win. The technology to deliver cloud computing exists today. Google is not constrained like legacy tech companies who have to protect their current revenue stream. Google can bulldoze its offering and transform the industry to true utility computing leaving few tech carcasses on the way side.

Jan 12 06:43 PM

[GNESS:]

Desicon:

I wouldn't underestimate the knowledge, experience and installed base of Cisco and Microsoft, especially when it comes to network intelligence, application intelligence and the necessary automation that would be required for Google to truly deliver enterprise IT services.

Greg

Jan 22 02:38 PM