Google Cloud lost $5.6B in 2020
techcrunch.com
techcrunch.com
The big difference with Google Cloud is that they have a long history of jacking up pricing at random. Wake up one morning and find that the solution you just spent months building will bankrupt your business under the new pricing regime.
From their historical prices, I find it difficult to believe they're not dogfooding.
Google has left behind a trail of de-platformed, de-monetized, (as you pointed out) re-priced, discontinued, API-changed, and otherwise angry customers.
Genuine brand value -- having customers trust you -- counts for a lot. AWS started in the red and quickly moved into the black. I was very skeptical the first time I used AWS, since the whole concept was new. I was converted after a few weeks of it working really well. I stayed converted with now a decade of it still working really well, of having good customer service, and of having 99.[many nines] uptime.
Google Cloud went the opposite way. Google started with all the developer good-will in the world, and I really wanted it to succeed. After a half-dozen serious failures, I won't touch it. I know dozens of developers who will never use Google Cloud again.
I'm not sure how Google will dig itself out of that one. At this point, it feels like it's throwing bad money after good.
The news about their Stadia team being disbanded wasn't even a surprise; it felt like an inevitability.
Even from a simple CYA perspective, I could never recommend my customers build their product on top of a Google platform.
Certainly true for me. They could release the most amazing new thing tomorrow and I'd wait 6 months to see if it's actually going to go anywhere. That's branding and their brand, while not bad, is certainly not "dependable."
Those make money. There's a limited time window during which Google Cloud can bleed money. If that runs out before it's profitable, businesses on it can say "bye bye," face bitrot, or see huge markups due to lock-in.
I have a GSuite legacy account for my personal domain name. Most of my family is on it. It was free.
I just tried to set up Google Voice on one of the accounts. I learned that they silently disabled setting up new phone numbers in 2019.
And on my main account, long distance calling stopped working about a month ago. No notice, no nothing.
It's been gradually bit-rotting for years, but this is kinda a big deal. My kids can't get phone numbers associated with their main Google account because I set it up when Google was supporting personal domains? That's obnoxious.
Support goes nowhere, naturally. Google says "Use workspace support." Workspace says "Upgrade to have support."
And obviously, pricing is prohibitive given that this is now a B2B offering, and my whole family is on the domain. Cousins, aunties, and all. $6/user/month gets super-expensive super-fast.
Stuff like this means Google loses millions of dollars of business elsewhere. I keep swiping my credit card for Amazon, as does my company.
Oh boy they've been really trying to push people off GSuite legacy hard. I started missing incoming emails, testing would show a server error about a high email flow for maybe a dozen per day. Zero support, and they erased my posts on their support board. You can't change the primary domain as free, you can't use any email diag tools, you can't do anything.
I ended up moving to Zoho. Sure it's not free, but it's not outrageous for personal/family use. Decent migration tools as well. It really started a hard de-Googlification. I nix any chatter about using Google at work now as well.
At the same time, free services is part of the problem, and I'm glad Google is shutting some of this stuff down. If anything, I think Google's biggest issue in the enterprise has been they just haven't had the corporate DNA to do enterprise-level support well for paying customers. IMO they've improved in that regard in the past couple years.
Free service culture is part of the problem, but it's not quite as simple as stopping free service. Google can't drop shut down the free stuff without losing most of their revenue. Most of Google's business is collecting my data through search and otherwise and serving me ads. In Google's main business, customers are statistics. If you're not paying, you're the product. I'm worth a few pennies to Google advertisers, so if I cost Google more than that, they can drop me. That culture creeps into enterprise. Stir in the classic Google arrogance and the new Google incompetence, and bad things happen a lot.
In the case of GSuite, keeping these things running and working would be almost free. Many of us signed up since it meant being able to use out own domain name, not for any business purpose. Google is being deliberately mean to GSuite Legacy customers to try to pressure us to upgrade, since that's the intersection of their classic culture ("We don't care about individual customers"), enterprise thinking ("We want to charge people"), and general apathy+arrogance ("We know better than our customers").
The result is what you saw above: when people do leave, they're fed up enough with Google they won't use it for anything. The lesson is clear: You can't trust Google with anything important. De-Googlify. If I didn't have elderly relatives who know how to use GSuite and probably won't learn anything else, I'd be gone in a second.
I've cost Google millions of dollars of business at my current company alone. Whenever people even think of using Google, I walk them through a dozen similar failures in both B2B and B2C settings, and showed them the dumpster fires that resulted. I've never seen anyone go with Google after that. That's not to mention the first time I used Google Cloud, when Google cost itself millions.
Clickbait
Google maps is a great example.
Mature the ISV and SI ecosystem so partners build the business for them.
Acquire profitable companies to fill critical gaps.
Create differentiated industry solutions and products and sell them based on business outcomes (value based pricing, consulting model).
Just a few ideas.
They don't have losses because it costs them 1 dollar to operate a VM that they sell for 70 cents.
They have losses because they are paying for construction of datacenters that are to be utilized in the future.
If, instead of $$$, they had treated customers like human beings rather than statistics, that might have paid off. As is, I'd say the effect was literally the same as if Google had poured millions of dollars into the California wildfires by quite literally dumping paper dollar bills into the fire. Google lost a bunch of money, and their problem went from few customers to vocal, dissatisfied ex-customers.
> The Information reports that Alphabet leadership briefly considered leaving the cloud infrastructure market in 2018 due to concerns over profitability. While they ultimately opted to invest in a buildout, long-term funding looks contingent on Google Cloud leapfrogging Microsoft in market share by 2023.
https://www.crn.com/news/cloud/google-reportedly-set-ambitio...
Posted using a de-Googled Moto G4 Play running e/OS.
/e/ = Lineage = AOSP (Android) with weaker security.