Google Elbows Into the Cloud

Description: Google said Tuesday that it was doubling its office space near Seattle, just miles from the campuses of Amazon and Microsoft, and stepping up the hiring of engineers and others who work on cloud technology.

Source: NYTimes.com

Date: March 12, 2013

GOOGLE-articleLarge

It is part of Google’s dive into a business known as cloud services — renting to other businesses access to its enormous data storage and computing power, accessible by the Internet.

In cloud computing, dozens or even thousands of computer servers are joined to create a giant machine capable of handling many tasks at once, from storing data to running Web sites and mobile apps to tackling complicated analytical problems.

Individual software developers, large companies and governments rent these services to run their operations often at a fraction of the cost of buying and managing their own machines.  Read Rest of Story 

 Questions for discussion:

1. Do you feel Google will be able enter this business Cloud market as a late entrant and be successful?  Why or Why Not

2.  Which of Porter’s generic strategies do you feel Google is pursuing in the Cloud market space? What about their competitor’s strategy?

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23 thoughts on “Google Elbows Into the Cloud

  1. Dillan McDonald

    Google will have no issues entering this market, companies will constantly look for new areas to conduct their business for increasing less costs as well as the movement in these cloud servers are relatively easy and allow for easy file access and sharing. you can even bring up the aspect of companies hiding information on different cloud networks to prevent external and possible internal cybersquatting from taking place.
    I think the fact that Google is a large competitor in the computer service industry that really all they would have to do is advertise a little because they are such a big name in the world today. so really any strategy used to attain business I don’t see as an issue for them.

    Reply
  2. Sean

    I believe google will be able to enter this business Cloud market as a late entrant simply because they are Google. Google will take advantage of any profitable markets and dedicate a bunch of their resources in order to get what they want and get a majority of the marketshare within that industry. Just as Brian Goldfarb said,“We’re not the first in this rodeo, but we have the history of Google,”. The history of google is learning new things and expanding at a rapid pace. Adding 180000 square feet to their Seattle warehouse just to be near Amazon’s warehouse speaks a lot about how dedicated Google is and how bad they want to get into this business cloud market.

    In terms of Porter’s Five Forces model, I think google is trying to increase the bargaining power of suppliers. with the addition of google’s cloud system, they give the potential customers and business community another option, and by introducing this new business cloud option they are hoping businesses will revert back to googles reputation in the IT industry and therefore switch to their cloud system due to the innovation and cost savings that can be had. Google’s competitors Microsoft and Amazon seem to be trying to minimize the threat of a substitute product or service as stated in the article, “Analysts say it is also a strategy to lure developers and businesses to use Google products instead of those of archrivals like Amazon and Microsoft.” Amazon is ready to cut costs if google were to become a more dominant supplier in this field and since Amazon has a better past in business cloud, I think they will continue to dominate.

    Reply
  3. Oyinkan Bakinson

    It is a possibility for Google to enter this market late especially if they have more attractive deals than Amazon and Microsoft. But then again it is doubtful because these companies have been using Amazon and Microsoft for so long that they may not want to change. This is where customer loyalty comes into play. Google is already famous for a lot of things so it will probably make it easier for them to enter this market. They already have the funds and labour to enter this market and operate very efficiently. Their name already precedes them which is a major advantage at this point. Though they may have their work cut out for them at this point due to the fact that other companies have been in the field for a while and knows the ins and the outs.
    The Porter’s generic strategy that I feel Google is implementing is trying to gain supplier power. They have experience handling information so they are going to use that expertise to plan out a strategy. Then offer lower prices since they have the funds. Maybe when they are stable in the market, they will then gradually increase the price to meet or to be near their competitors.

    Reply
  4. Haley

    I believe google will be able to enter the cloud and they will be able to be successful at it as well, mainly because google is such a huge company and people already know about google, and respect it. They may tough competition out their but google is taking advantage of Porter’s 5 generic strategy model and using the consumer buying power as their ticket into the cloud market. By giving consumers power, instead of focusing on perhaps price or differentiation, they are hoping that by giving consumers more to choose from they will go ahead and try out google.
    With all the new staff google is employing I do believe that they will come up with a cost friendly cloud computing system that customers will defenitely be interested in giving a go!

    Reply
  5. Matt Gough

    1. Do you feel Google will be able enter this business Cloud market as a late entrant and be successful? Why or Why Not
    Google will have no problems entering this cloud market as a late entrant and they will be successful. Google has some of the best and brightest for software tech people and there is very little that they are not successful at. The first thing that they would need in order to be successful is money, and its apparent from the first fast we did here, is that Google is not short of cash. they will be able to pay and do whatever it takes to become a large player in this Cloud market. Google is a household name, and everyone we know uses Google as their primary search engine on a day to day basis, so people will have no problems switching from whoever their current providers are to Googles software. There is a large market that is still untapped in the cloud market and since a lot of people already trust google as their main search engine, they will be able to increase the amount of cloud users.

    Reply
  6. Nicole Freeman

    I think Google will definitely be successful in the long run. I actually thought they had invented cloud computing. The competitive advantage for Google is that they are just so big. Like the word Kleenex is used to say tissue and Band Aid is used to refer to a bandage; Google’s brand name has become a verb! “I’ll just Google that and find out.” In the video we watched, the spokesperson also said there is a level of trust that goes on with cloud computing and Google seems to have that consumer trust. Google is the main search engine used by most people so their brand enters our home and businesses everyday sometimes promoting a famous person or holiday thereby keeping us engaged with their service. It seems Google is going to use a cost leadership strategy by offering cloud computing at half the cost of its competitors. Amazon however is confident they can compete head to head with this strategy and they also have the differentiation strategy in place with better business software than Google. They were the first to offer this service so they have first mover advantage. Google has the money to lure top engineers to help with their business software problem so I believe it is just a matter of time before Google gets a bigger share of the cloud market.

    Reply
  7. Greg Goodwin

    Yes I do, Google has become more and more of a household name and people are likely to think “finally” rather than “too late.” Take apple for instance, as soon as you throw an “i” in front of a word (especially a new word), it sparks a lot of interest almost immediately. I feel that the market share that is currently held by Amazon and Microsoft for cloud computing may be harder to win over, but Google will be successful in the cloud computing business from new customers and some existing customers regardless.

    Google is employing the “Bargaining Power of Customers” section of the Porter’s 5 forces model. Because they are entering late, they will need to cive consumers an option that will undoubtedly be a good switch. Therefore, they will likely offer these services at competitive rates (maybe even at no cost), and perhaps leverage simplicity as their unique selling feature. As Google is something many of us use every day, it seems a no brainer to get all we can for potentially less out of one suppler than pay more and utilize multiple suppliers. As for Microsoft and Amazon, they are battling the threat of new entrants. I think that these companies will have the problems with combating customer loyalty to Google. Similar to Apple products – do you think Microsoft stands a chance there?

    Reply
  8. prashant malik

    I think that Google has a very good chance at competing in the Cloud market even with being a late entry because being such a big firm, it will never face financial problem and also it has the man power. In Cloud computing, dozens or even thousands of computer servers are joined to create a giant machine capable of handling many tasks at once, from storing data to running Web sites and mobile apps to tackling complicated analytical problems. They have the name a reputation that will pull them through the early days .Google may not have signed contracts with big firms for their cloud program, but still they can gain huge profits by signing contracts with small firms.In terms of Porter’s Five Forces model, it seems as if Google is trying to increase bargaining power of suppliers.Google is currently working on competing by offering the lower price to start .Amazon initially focused on start-up Web companies, but has gone on to offer features like e-mail and database search that are attractive to more mainstream corporate customers, including the InterContinental Hotels Group, Samsung and Netflix. Microsoft started Azure to try to hold on to corporate customers that Amazon wants to pry away, and has struggled for years to adapt its business from selling individual software packages to renting software over the cloud.

    Reply
  9. Jordan Gibson

    1. Do you feel Google will be able enter this business Cloud market as a late entrant and be successful? Why or Why Not
    – Honestly Google can enter into any space that they so choose, they are that big and powerful. They won’t be stopped at any moment and do not feel threatened at all about entering the business as a Cloud market. Because of their name and brand I think they would ultimately succeed not only in this business, but in any in which they choose to enter down the road. When you look and think about Google as a powerhouse company, you can immediately associate the word success to it. Google has taken off in the business world as a Global brand and will continue to do so.

    2. Which of Porter’s generic strategies do you feel Google is pursuing in the Cloud market space? What about their competitor’s strategy?
    -I believe that out of Porter’s generic strategies Google is most closely associated when trying to obtain the buyers supplying power. Although they are a late entrant, they are a giant corporation capable of extraordinary marketing powers and capabilities. As far as it goes for their competitors such as Amazon they are more focused around prices and cost differences that is really the main points that they are trying to highlight because they just simply cannot compete with the marketing strategies and powers that Google has built over their years of existence.

    Reply
  10. Kathie

    What Brian Goldfarb said is true, they may be a late entrant but they have the history of Google. I think that they would have no problem being successful in entering this business, but it will probably take some time. Getting companies to switch over to Google could be difficult since so many companies already support Amazon. People nowadays are too busy to learn how to use a new platform when they are already familiar with another one. But then again, Google is Google. People know the name and I think they would be less hesitant to switch to Google as opposed to other cloud services by less known companies.

    Reply
  11. James Perry

    I feel that Google has its work cut out for them to become successful in this portion of their business expansion. As a late comer into the cloud market presents some challenges in that there are already a few companies offering the services of their clouds. Amazons cloud has been around since 2004 and has its customer base set up and it is hard for people to switch over to a new way of doing things especially when they have been working with a company sush as amazon for a few years already. It is possible for Google to be successful but i think that it is going to take a lot longer than they are anticipating.

    Google is definately trying to win over the customer base and knowledge based workers of its competitors to make their new cloud service available. Google is going to market their cloud at a cost well below its competition in hopes to gain the market potencial that it desires to be successful. With that being said, Google isnt doing anything that hasnt been done before. With the right plan in place and allowing adequate time for this cloud to take off and gain enttrance into the market, i believe google has a shot.

    Reply
  12. mark schmitz

    Google can enter any market they want and be successful. That doesn’t mean they will be number one. They are using price to compete with Amazon but I feel they should stick with their proven strategy of differentiation. They should take what they have in the cloud industry and put some sort of spin on it. Creating a value-added approach would be more effective in getting Microsoft and amazon users to convert. Augmenting the service into something unique will peak new interest and give Google a competitive edge, if done properly. Just because you’re a late bloomer, doesn’t mean you can’t get the girl. Given time, Google can surpass its competitors but it’s all about how you play your hand. They need to think.

    Reply
  13. shaunagregus

    I think that in time, Google will become equally successful in the cloud computing world as its competitors. Google is a huge name that people already associate with so many things that it’s only a matter of time before the fanatics jump on it, in turn inspiring others to jump onto the newest Google bandwagon. They are such a huge, powerful company that it seems almost impossible that this idea will be a flop. Although they are behind other companies, there is a growing need for this system and it’s the newest way to store data; people love to be up to date on the latest technological trends. I think it comes down to how they market their system to set it apart from the other existing products and not only recruit new users but perhaps entice people with systems already in use to switch over. There is a chance that they have simply missed their chance in this market. However I do not think this is the case considering both the financial and creative backing it has. The main reason that Google would be successful is that it would be once again stepping a food into the PC vs Mac world. Mac users are already on iCloud, and when Google introduces its platform many PC users will be excited to be once again on the same level as Mac users; that is, if they haven’t made the switch already. But better late than never, right?

    Reply
  14. Edward Agyapong

    Yes, Google will be successful in cloud computing even though it came to the party quite late.The reason is that, for a firm to be successful it needs a few things like man power and financial support of which google has. With googles excellent and very well paid staff members working around the clock surely they will break through. And like i said earlier, because they have the financial power they can afford to offer good, quality and a variety of services to customers when it comes to cloud computing. I am sure when it is done fixing and checking the whole system, they hit the market with some really force and that will most definitely shut all of its competitors to the ground because it will offer a lot in exchange for a little.
    The Poter’s generic strategy that Google is trying to implement is trying to gain supplier power. In the sens that they want to perfect their work and then hit the market to offer all of its customers and other competitor’s customers the best services at the lowest price they can ever ask for just to gain the market share. Then am sure when the gain the market share they will now play with prices to maximize their profits.

    Reply
  15. Ida Draper

    I think that Google has a very good chance at competing in the Cloud market even with being a late entry. They have the name a reputation that will pull them through the early days as they improve their product and make it more appealing to the user. Many people go to Google products out of familiarity with Google and a brand loyalty. Yes Google may not have many big name companies signed up with their Cloud program yet but by attracting the smaller companies, they can still gain a large market space. Google is currently working on competing by offering the lower price to start with. Because they are new to this market, they have not had the time to build an entirely new and different product so they have no choice but to compete on the bases of price. This price war has the possibility of getting all players involved until one or more run out of money to compete leaving few players in the Cloud market.

    Reply
  16. Alex King

    Everything is heading to the cloud these days. I see no reason that a well structured company like google would not be able to capitalize on Cloud services. With Amazon earning over 800 million last year from cloud services, Google would be silly not to capitalize. The cloud offers so much computing power to companies that otherwise, could never exist. If google positions itself to collect as many accounts as possible (both major and minor), they could position themselves in a way that ensures long contracts at reasonable rates ensuring that their systems remain stable and secure.

    Reply
  17. Jessi Chrapko

    I think that it might be more difficult for Google to successful since there are other cloud system established that users are more familiar with and that they have already put their information into. People generally don’t like to switch over data and information if they already have a system that works. The article also suggests that Google’s cloud system isn’t quite up to par in what it offers users as compared to systems like Microsoft and Amazon.

    In terms of Porter’s Five Forces model, it seems as if Google is trying to increase bargaining power of suppliers. By creating another type of cloud system, they are giving consumers more choice and are hoping that they will use or switch to their system because it is different and cheaper. Google’ competitors like Microsoft and Amazon seem to be trying to minimize the threat of a substitute product or service. Up to this point Google does’t have some of the features their cloud systems do and Amazon said it is prepared to lower their costs even more so that people will be less likely to switch to a Google cloud system.

    Reply
  18. Justeen Kolody

    Google’s view of success in a cloud war is seen far away in the horizon, Amazon has such a strong influence over Google and Microsoft that even if Google was able to persuade many consumers they still have many years of catching up to do. Although there is many potential for customers it is very sketchy that after a year and a half of working on Google’s cloud it still is not being released and that the testers still aren’t fond of it. To compete with someone who has a successful stand in the industry is almost a waste of time and money. With Amazon competing on quality and on price it will shoot down Google Cloud before it even begins. As the last part mentioned “ we’ve always been good at making everything as low cost…then we lower it some more” makes it pretty clear that this will boil down to a price war, and Google will lose. With coming into a market this late, it is very tough to gain the respect and want for consumers, as they have to change their entire format from either Amazon over to Google. But are people willing to make that change?

    Reply
  19. Nicole Clyne

    Google will definitely enter, and they will most likely succeed. They may be late in the race but they will do whatever it takes to be a powerful runner. They have a very well known name. I believe they will be at the top of this one day.

    Reply
  20. Jordan Slemp

    They will be able to enter and succeed. Google is a huge company with a name everyone knows. People don’t say “I’ll search that” they say “I’ll google that”. Every company will jump on board working with Google. they have the technical expertise to back up their powerful brand name. Probably they will try to differentiate their cloud computing technology. Google’s technical expertise makes it possible for them to come up with a system that works more effectively and efficiently than its current competitors. Currently Amazon is focused on their first entrants advantage. Being the first in this area was huge for there current success. Microsoft has a lot of technical expertise as well, but it seems Google may out spend them on research and development.

    Reply
  21. Marc

    Yes they’ll enter, and yes they’ll be successful. Large scale distributed computing systems (the cloud) is what Google is built on. Google Search, Gmail, YouTube – all use their internal cloud infrastructure, so people would be very interested in using the same infrastructure for their business.

    I’ll be interested to see what platforms and benefits they’ll offer the customer – they’ve got long term sustainable competitive advantages over many of their competitors, so I’m curious to see what their position will be on this one.

    Reply
  22. Tayler Orban

    I feel that it is going to be very difficult for Google to enter the business Cloud market because there are a few Clouds in place. Computer users have already become familiar with these sites and understand how they work and how to use them so it is going to be difficult to get them to switch. Most people become familiar with something and stick to it because it is not always easy learning new things and lots of people do not have the time to spend learning how a new program works. I believe this is directly related to the PC vs Mac battle. It is difficult to get people to switch because they figure out what they like about it or they do switch and realize they liked their original choice better. An advantage of Google coming into the Cloud business market is that it is another options. People tend to be reassured by options and like to have a backup plan. It is not impossible to get these people to switch but it is not an easy task. I think Google will have to heavily rely on their marketing to showcase that their Cloud is better than the ones that people are already using.

    Reply

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