Is Apple and Facebook’s competitive ferocity causing Google to re-invent itself?
It seems like everything that Google has done from its R&D people in the past 10 years has been about increasing the size of the total addressable market (TAM) with the idea they can sell more advertising. That everything from increasing the amount of people with free Internet access to showing ads to people when they are commuting in driverless cars all they way to cures for cancer.
However, and it a big however, Google has been mugged by Apple (with its anti-Google ad update to iOS9) and Facebook with its highly effective ad platform. Google has also slightly shot itself in the foot with its auction based AdWords system where advertisers bid against each other for adwords – competition is so fierce that many advertisers are actively looking for alternative channels.
So are they changing direction? This article from TheNextWeb appears to suggest so; Google aims to be ‘cloud company’ by 2020, predicts more revenue from cloud platform than ads (by Bryan Clark)
At today’s Structure event in San Francisco, Urs Hölze, Google’s senior vice president of technical infrastructure, predicts that within the next five years, Google’s Cloud Platform revenues could surpass its advertising revenue.
“The goal is for us to talk about Google as a cloud company by 2020,” Holze said.
It’s an ambitious plan for a company that is typically thought to be lagging behind Amazon Web Servces (AWS) and Microsoft Azure in the cloud computing market.
Hölze didn’t flinch at the comparison. Instead, he defended Google’s position by comparing this to the early smartphone battle between iOS and Android. The iPhone was first, but Android is now the world’s most used operating system.
Time will tell, but it’s usually unwise to bet against Google.