Is Google killing GAE?

[Anders]

I have started to suspect that Google on purpose is killing GAE. Because they know by now that they will not get enough large customers. See for example this article: http://blog.labslice.com/2010/12/2010-cloud-computing-winner.html which shows that GAE has a very tiny market share. I think the main reason is that the GAE datastore has too limited and non-standard functionality.

And they don't kill GAE immediately because that would not only make many existing customers very angry but also media would then report about how Google has failed with yet another product, and this time in the important cloud computing space. Not good. So they make a slow kill and hope it will go under the radar of big media.

[Anders]

And at the same time Google is making a statement by setting a price on instances to show how other cloud providers are totally ripping off their customers by doing so.

[Anders]

Often even generally well-informed customers are fooled by pricing models. One example is the failure to take into account the exponential progress of price/performance. The customers are happy when the price doesn't go up year after year. What they miss is that the actual cost for computing power, storage and communication is halved every year. So after 10 years the cost is 1000 times lower! Of course the cost is about more than just raw computing resources but with more and more automation this exponential progress should not be underestimated!

[Tapir]

recently. google closed many projects.
Hope gae is not the next.

In fact, after more than one year development on it, I really like gae in many aspects.

[Raymond C.]

There was a theory that GAE was started using Google's own infra-structure so they can absorb startups who run on GAE easily.  E.g. Think about if twitter was started on GAE, if they dont enough revenue to keep running it, Google can take it and make its own service without any technical transition.

I think that vision has gone with the colleagues (if it did exist).

[Anders]

Whoa! I just found out that App Engine for Business is closed. See: http://code.google.com/appengine/business/

But they will move that service into ordinary App Engine, including SQL support. So hopefully Google will continue to run and develop App Engine. And drop the horrible price on frontend instances! He he.

[Tim Hoffman]

This is all just nonsense, they are changing their business model.

They wouldn't be taking appengine out of preview and then legally committing to the platform for 3 years 

if they where going to can.

[Anders]

3 years is what I meant by a slow kill. But I hope my speculation is wrong. Cloud services is a very young market. Compare with for example a company selling consumer electronics. Such company will have a tiny profit margin because the market is so mature. In cloud computing on the other hand, the cloud service providers can have monstrously large profit margins because it's a new market. However, in these days things happen very fast so the cloud providers will not be able to cling to those titanic profit margins for long.

[Anders]

One example that the cloud providers have massive profit margins at the moment is an interview I watched where a CEO for a tech company said that they had moved from using Amazon cloud services (or some provider like that) to running their own data centers. And they cut their cost by an order of magnitude or some huge amount like that, maybe even much more than that (although I could be wrong). To me that's an indication of that cloud service providers today have way too excessive profit margins.

[Tim Hoffman]

3 years is not a slow kill.

Thats like saying Canonical is deprecating ubuntu because Long Term Support (LTS) version you get 3 years committed support.

What the 3 years statment provides is organisations a committment they can rely on, which was never there 

whilst appengine is in preview.

T

[Raymond C.]

I dont think Google want to kill GAE at this moment.  However I would say they have given up growing of the platform anymore.  As I said in another thread, if GAE hasn't take off in the past 3 years, I dont see how it would under the new pricing model.  A platform without user base just die by time.

[Tim Hoffman]

Don't agree, I don't see the evidence to support you claims.

I think it has probably been more successfull than they can afford and need to start re-couping the 

massive cost of running such an service.

But thats my opinion, only google can really tell us the truth of the matter.

I will leave it at that.

[zdravko]

Is GAE not just an API that is layered on top of their existing
infrastructure?

Somebody already asked something to the effect of what it would cost
or whether Google itself would go bankrupt if it had to pay the GAE
prices. Tim and somebody from Google labeled that (what seems like a
legitimate question) as trolling.

But if the infrastructure is already there then it is a fair question
to ask whether GAE users should bring in a better margin than the rest
of GOOG operations that are using that same infrastructure?

[Tim Hoffman]

I never said trolling, just said it was nonsense, with no evidence to support the claim.

In addition the basic out of the box google infrastructure doesn't do appengine. Appengine is a whole new 

layer that has been developed,therwise you wouldn't see things like M/S or HR datastore's

And you have to ask yourself how and where does each google project/product makes money for google.

appengine is a completely different revenue model than gmail.  What is the upside for google running appengine.

The upside of running gmail for free is obvious, the same can't be said about appengine

[zdravko]

However, why should GAE end up contributing more to the bottom line
than GMail or YouTube or many other GOOG properties will ever be able
to contribute - for each dollar of cost ?

[zdravko]

It's not like GMail potential is not already known after all of these
years of running it. So, how much do they spend on it and how much
does it contribute to the bottom line?

The potential of GAE that nobody is mentioning is that at a
comparatively reasonable cost (when compare to say GMail) it keeps
GOOG in that business just in case that down the road they want to be
in that business. I am certain that even they do not know yet how
profitable it could be 5 years down the road until they themselves see
what competition does and even what tweaking of their GAE automation
ends up producing.

[Tim Hoffman]

i never said it should contribute more to the bottom line, and there is no evidence to suggest it does.

All of this is just supposition on your part.  Do you any evidence to back up your claims.

Enough said by me on this now.

See ya

T

[Simon Knott]

Anders, you repeat this information again and again - I'm not really sure what your point is.

Whilst the progress of CPUs is following Moore's law, the underlying network, storage and I/O-stack doesn't necessarily follow this curve.  Even if it did, Google won't be updating their datastore hardware every year to keep up with the latest and greatest - just like every other large corporation who runs a datacentre, there will be a phased, planned upgrade path.  You may even find that in 10 years time that a majority of the supporting hardware hasn't changed!

[Anders]

I'm not saying that the price should be 1000 times lower after 10 years, but I do say that the price should be a lot lower after 10 years. Most people haven't grasped yet the exponential progress. Cloud service providers can use this lack of knowledge among the customer to rip them off, basically.

[Simon Knott]

I'm not sure I've seen any mention that the price won't be dropped at all in the future, just that they aren't planning any price drops in the near future.

Pretty much every industry plays upon peoples' lack of knowledge!   At the end of the day, companies who do their research will go for the best provider.  The ones who don't will end up paying over the odds and likely end up on a PaaS / IaaS that is completely unsuitable for their needs.  They'll also be the ones who then face huge costs to migrate because they've become locked into something "accidentally".

[Anders]

Most likely when the cloud service market matures we will see a drop in prices. It's just that I want Google to be ahead of the curve and offer super competitive prices with the new pricing model. I'll bet the profit margins in cloud services today are enormous compared to more mature markets such as selling consumer electronics.

[de Witte]

Those numbers will likely change very soon. If they make some adjustments to the scheduler then GAE becomes much cheaper than AC2. Also the android development community is growing fast, very fast. Google may not own the mobile/pad market but the serverside software will need a place to run.