IBM, Microsoft, Google, Verizon

Google is Building a Private Internet that's Far Better, and Greener, Than the Internet

March 17, 2010

ZDNet - The Internet is huge but it’s a hodgepodge of hundreds of thousands of smaller, private networks, connected through thousands of Internet Service Providers (ISPs) and dozens of backbones operated by the large Telcos and service providers.

Moving data from one end of the Internet to the other can mean traveling across many different computers and different networks. Some of these computers and networks are old and inefficient while some are modern and very efficient.

They are all tied together into what we call the Internet, through a collection of standards. These standards determine how a packet of data can reach its destination, complete and undamaged.

Many large Internet companies own large chunks of the Internet through building their own data centers, networks, backbones, etc. This helps to keep their costs down.

Google is big…

Google is one of those companies that owns a large chunk of the Internet. It has more than 50 data centers around the world; it builds its own servers; it operates its own backbones that shuttle huge amounts of data across the world; it develops its own software for managing all of its data; it keeps banks of servers in the data centers of ISPs so that it can cache data closer to delivery; and more, much more.

How big is Google? asks Arbor Networks. It’s a rhetorical question because Arbor knows, it sells network control and monitoring hardware used by the largest ISPs and corporations.

Arbor says that Google is very big:

I mean really big. If Google were an ISP, it would be the fastest growing and third largest global carrier. Only two other providers (both of whom carry significant volumes of Google transit) contribute more inter-domain traffic. But unlike most global carriers (i.e. the “tier1s”), Google’s backbone does not deliver traffic on behalf of millions of subscribers nor thousands of regional networks and large enterprises. Google’s infrastructure supports, well, only Google.

Based on data from 110 ISPs collected in the summer of 2009, Google was responsible for as much as 10% of all Internet traffic.

If a company wants to compete with Google on a large scale, the costs of shuttling data packets around, whether they be Twitter packets or video packets, starts becoming very important at these large scales.

Arbor says:

The competition between Google, Microsoft, Yahoo and other large content players has long since moved beyond just who has the better videos or search. The competition for Internet dominance is now as much about infrastructure — raw data center computing power and about how efficiently (i.e. quickly and cheaply) you can deliver content to the consumer.

And that’s why Google has focused on building the most efficient, lowest cost to operate, private Internet. This infrastructure is key to Google, and it’s key to understanding Google ...

The Internet is becoming ever more Google’s…

Googles growth means that it is building a much faster, and much more power efficient, and much greener Internet. And through peering agreements, it is carrying much more than just Google traffic, it is quickly, and quietly becoming an important carrier for all Internet traffic.

There are huge indirect benefits from Google’s work that make the Internet a better service for every Internet user.

Essential facility…

What will this lead to? It’s going to lead to regulatory scrutiny because Google will be increasingly seen as an ‘essential facility’ vital for the economies of regions, nations, and entire trading blocs.

Increased scrutiny by governments, and regulatory bodies, will make it more difficult for Google to execute on its business strategies. Combined with the increased scrutiny of Google’s acquisitions by the Federal Trade Commission, Google’s future ambitions will become ever more restricted.

Google sees the writing on the wall. It has boosted how much it spends on lobbying in Washington. [Antitrust Heat -- Google Spends Millions To Influence Washington - SVW]

A layer cake business…

Google might decide that its value lies in its incredibly efficient infrastructure, which is far more efficient and lower cost than the Internet as a whole.

Once you have the lowest cost infrastructure, you can layer and scale other business services on top. Such as payment systems, basic voice and data services, security systems, and commerce platforms (advertising).

Google might decide it doesn’t need to own a Facebook, Twitter a Yahoo, or an Amazon — when it can host all the data packets. It can carry and trace a data packet from source to destination and back again — it can mine all that transactional data. That’s extremely valuable.

It’s a little known fact that Google keeps all of its data, all transactional data. It erases part of the identifiable meta data, but that can be reconstructed. [Google Keeps Your Data Forever - Unlocking The Future Transparency Of Your Past - SVW]

That transactional data is incredibly valuable, and even though we can’t unlock it to its fullest value today, Google is working on it.

No umbrella…

By being able to build the most efficient, private Internet, Google makes it extremely difficult for any competitor to challenge it. There is no ‘price umbrella’ that competitors can use.

For example, there used to be lots of mainframe computer companies because IBM, the largest mainframe computer maker, used to charge very high prices. There was a substantial price umbrella set by IBM that sheltered competitors, and allowed them to sell IBM compatible mainframes and still make a good living.

You can see similar price umbrellas in other business sectors.

Google has made sure that by building the most efficient, lowest cost infrastructure, there is no price umbrella that could be exploited by competitors. It’s more like a manhole cover, try to get under it, and you fall into a hole…

This strategy means that Google leaves money on the table, it could make more money over the short-term by creating a price umbrella. Instead, it has chosen a long term business strategy which doesn’t give competitors any toehold, let alone an umbrella.

Its stock ownership is set up so that founder’s stock has ten times the voting rights of public shares, this allows it to avoid shareholder pressure to pursue short-term business goals.

This all adds up to make Google into a truly formidable force, and one that continually amasses greater powers and influence. ‘Do no evil’ is the very least it can do.

Google TV Is Coming Soon to a Living Room Near You

March 19, 2010

Discover Magazine - Not happy with only dominating the Internet, software giant Google is looking to expand into the television business, too. It won’t be producing content, but Google will be creating software in partnership with Sony and Intel that will help bring the Internet to TVs and set-top boxes all over the land.

With the just-announced Google TV, people will be able to access web features like downloadable games, Facebook, and streaming video on their TV as easily as if they were flipping channels. Some existing televisions and set-top boxes [already] offer access to Web content, but the choice of sites is limited. Google intends to open its TV platform, which is based on its Android operating system for smartphones, to software developers. The company hopes the move will spur the same outpouring of creativity that consumers have seen in applications for cellphones [The New York Times]. Google expects that products based on its software may be ready as soon as this summer.

Google’s TV platform will use Intel’s Atom chips and may also give Sony a leg up in a highly competitive hardware market, as Sony hopes to bring out the first appliances and maybe even TVs that encorporate the software. The project will use a version of Google’s Chrome Web browser to create an interface where people can use the TV not just to poke around the Internet, but also to play videos from Hulu or YouTube. The company has reportedly already built a prototype set-top box, but the technology may be incorporated directly into TVs or other devices [The New York Times].

However, Google TV will face stiff competition from Roku and Boxee–two existing devices that allow users to stream video from Netflix and a selection of other sites, while Yahoo has also come out with a TV platform that allows users to access certain Web sites. Those competitors, unsurprisingly, say their products are superior to what Google has planned; Roku CEO Anthony Wood argues that the expensive chip inside a Google TV box would raise the device’s cost to about $200, far higher than Roku’s $80 device. But as Google hasn’t officially acknowledged the project yet, price estimates for Google TV devices are pure speculation.

Experts see Google’s project as a pre-emptive move to get a foothold in the living room as more consumers start exploring ways to bring Web content to their television sets. Google wants to aggressively ensure that its services, in particular its search and advertising systems, play a central role.

“Google wants to be everywhere the Internet is so they can put ads there,” one insider says.

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Microsoft Exec Pitches Internet Usage Tax to Pay for Cybersecurity

March 3, 2010

A top Microsoft executive on Tuesday suggested a broad Internet tax to help defray the costs associated with computer security breaches and vast Internet attacks, according to reports.

Speaking at a security conference in San Francisco, Microsoft Vice President for Trustworthy Computing Scott Charney pitched the Web usage fee as one way to subsidize efforts to combat emerging cyber threats -- a costly venture, he said, but one that had vast community benefits.

"You could say it's a public safety issue and do it with general taxation," Charney noted.

Ultimately, Charney was only offering one suggestion during the RSA security conference; not a precise policy prescription.

But his idea has already riled many in the computer world, some of whom have since charged Microsoft and its historically vulnerable Windows operating system are responsible for countless, worldwide cybersecurity problems.

Still, Charney implored those in his own industry to focus more on "social solutions" to growing Internet security concerns. He described the importance of cybersecurity in terms of national healthcare, noting that computer ailments and hacks, like preventable diseases, travel to and incapacitate other, connected units -- not just the infected user's home computer.

"Just like we do defense in depth in IT, we have to do defense in depth in... response," he later added.

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