I suspect this is down to how it's phrased by someone who may not be familiar with strategic planning.
It's common for businesses to work out several scenarios and estimate their outcomes. Then you look at the investment outcomes of those scenarios.
So quite plausibly there might have been these scenarios:
1. Invest More + High Growth
2. Invest More + Low Growth
3. Maintain Investment + High Growth
4. Maintain Investment + Low Growth
5. Divest
You pretty much always want to canvass the option to quit a business. You need it to keep your other estimates honest. Anything else is not only giving into sunk cost fallacy, it's flat out denying its existence.
So rejecting "Divest" doesn't mean it was ever a serious contender. It may be there mostly in the interests of completeness.
Dude, You're comparing apples and oranges. It makes no sense to compare GCP in 2017/2018 which is when the article refers to this conversation to AWS which predates it by 10 years. You don't think that AWS execs and Amazon execs had conversation about profitability in 2006?
Google has offered cloud computing with the release of app engine almost a decade ago. They kept it running this whole time and have only added to the platform.
The entire discussion in the memo seems to be more about how much they want to compete at the level of AWS rather than being in cloud computing at all.
Based on the developments and investment so far, it’s clear GCP wants to be a serious contender.
Again, having the option numbers crunched is not the same as discussing it or seriously considering it. "Quit" and "Do Nothing" should always be included in scenario planning. Especially the latter, because by ordinary momentum it's usually what happens.
I expect Amazon plans have included scenarios such as "quit machine learning" and "don't invest in on-premise units".
Why so much significance to such a minor line in a meeting years ago? What about the part where it was dismissed? Or does that part not matter?
I don't know how else to explain this. AWS and Azure are massive profit centers and GCP is slowly catching up. Cloud computing, machine learning, big data, IoT, and more have trillions in potential market cap.
It's completely nonsensical to consider that a company this big with this much investment already will exit that opportunity.
Interestingly we don’t even know if Azure is making a lot of money because Microsoft obscures it even harder than Google in their financial reports.
Microsoft has one hell of an enterprise sales and marketing machine though, probably the best in the world, so I’d assume they are doing quite well, even if they are mostly reinvesting it.
Nobody sent these signals. It was a minor discussion a long time ago. The billions in investment and growth of the platform are the exact opposite signal.
You seem to be reading this as if the CEO just announced that they're not sure about GCP anymore.
The article does not make it out to be a minor discussion and it was only 18 months ago, hardly 'a long time'. To me it is quite shocking that as short as 18 months ago Google would still consider pulling out of the market but then again, that is exactly the same play they did with other products so it probably should not surprise me.
> The billions in investment and growth of the platform are the exact opposite signal.
At Google's level I would not expect less than billions in investment, the growth of the platform is for now still substantially lagging behind the competition as far as I know, the bulk of the companies I look at are solidly in the AWS camp or in some cases running on Azure, Google is still the exception but getting more common over time. I look at about 50 companies / year so that's a relatively small sample but they are typically well funded start-ups or later stage established companies.
> You seem to be reading this as if the CEO just announced that they're not sure about GCP anymore.
The fact that it was mentioned in a meeting doesn't mean it was on the table. I'd more concerned with management if they weren't talking about exit points for a risky venture. A perfectly necessary point of consideration and I don't doubt that the same topic came up at Amazon and Microsoft.
For Google, if this is still a 'risky venture' then they are simply in the wrong business, they have the scale and should be able to offer their infrastructure at a cost that is quite profitable. There is plenty wrong with Amazon but they have never ever given off signals that they might withdraw their infrastructure offerings from the market. Microsoft also hasn't but then again, they do have a history of launching stuff and withdrawing it again (Xbox the notable exception, that took forever to take off and they stuck with it). Google has taken products off the market not because they weren't profitable but because they weren't profitable enough. That's the nightmare of early infrastructure adopters who will - by that time - be bound hand and feet.
If you're in competition with the likes of Amazon and Microsoft and you intend to go after the same customer profiles then you would do well to ensure that your messaging is what those customers expect and that every outward signal you give is that you're in it for the long haul, with a much longer horizon than the companies that are going to be your customers can oversee so that the trust becomes implicit.
That way if some internal document gets released it doesn't look as though you are still undecided.
Anyway, no need to take my word for this, let's just see how it plays out in the longer term.
From the article:
> The group even talked about—and eventually dismissed—the idea of leaving the market entirely
That's good enough reason for anyone to get off GCP.