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Will Google Ever Give Up Its Cloud Business?

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Is there a chance Google gives up its cloud business? originally appeared on Quorathe place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by Stan Hanks, CTO of Columbia Ventures Corp, on Quora:

Is there a chance Google gives up its cloud business?

There are two things that I want to address here.

First, there’s zero chance that Google will back out of the cloud business. Zero.

They have to run megahyperscale infra just to support their own needs.

If they can boost the volume at which they consume tech, because they’re not only consuming it themselves but they’re reselling use of the stack to third parties, they drop their base costs further and learn more about scaling out multi-tenant infra securely and cost effectively – with someone else paying for it.

They drop their effective per-cycle costs on their core business, by having offsetting revenue from third party use. Having the cost of goods on your core business be effectively negative really, really helps the bottom line.

They capture a fraction of the tech ecosystem and get first look at new workflows — not from a “oh hey we’re snooping the wire to see what you’re doing” basis, but from a traffic analysis perspective.

Plus, it’s a much needed diversification — if they even managed to get to 80% of Amazon’s numbers — Amazon is on track to close to $25B in revenue for 2018 – that’s like half of the total current Google revenue. Think about the impact of that.

It’s far too valuable to walk away from. Zero chance. Besides, the analysts would kill them, it’s completely unsupportable on Wall Street.

However, I completely feel for Diane Bryant. Joining Google was a rookie mistake, or the mark of hubris, but this was destined to end badly.

I was nearly Diane, in another area, in another time. In 2000 after I left Enron, I was offered the opportunity to join Intel as CTO of the newly re-invigorated Network Products Group. I would have had carte blanche to do whatever I needed to do to re-align the business, with the bogey of a truly insane increase in the volume of network processors sold over a three year window.

I spent a couple of weeks hanging out, meeting with people, sort of test driving the job. And passed on it.

Like Google, the top brass at Intel are lifers. They’ve been there so long they really don’t remember being any place else. It’s been a very, very long time since someone from the outside has shown up and ascended to a position of significant power.

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Article Credit: Forbes

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