Alphabet Tops $100b Quarterly Revenue for First Time, Cloud Grows 34%

Worked at Google for 7 years, and your post reminds me it is time to share a secret: it is Koyaanisqatsi* and people's base instincts unbridled, no more. There is no quicker route to irrelevancy than being the person who cares about something from last years OKRs.

* to be clear, s/Koyaanisqatsi/too big to exist healthily and yet it does exist -- edited this in, after I realized it's unclear even if you watched the movie and know the translation of the word

> Watch out when your competition fires at you. Do they just want to force you to keep busy reacting to their volleys, so you can’t move forward?

> Think of the history of data access strategies to come out of Microsoft. ODBC, RDO, DAO, ADO, OLEDB, now ADO.NET – All New! Are these technological imperatives? The result of an incompetent design group that needs to reinvent data access every goddamn year? (That’s probably it, actually.) But the end result is just cover fire. The competition has no choice but to spend all their time porting and keeping up, time that they can’t spend writing new features. Look closely at the software landscape. The companies that do well are the ones who rely least on big companies and don’t have to spend all their cycles catching up and reimplementing and fixing bugs that crop up only on Windows XP.

—Joel Spolsky, "Fire and Motion," 2002

https://www.joelonsoftware.com/2002/01/06/fire-and-motion/

So it was definitely not "fire and motion," as there was no competition. I think platforms genuinely need to evolve as new use-cases onboard and technology progresses, and so the assumptions underpinning the platform's design and architecture no longer hold.

However, I do think a small part of the problem was also PDD: "Promotion Driven Development."

I guess the big providers learn from each other.

So you either:

1) postpone all your updates for years until a bad CVE hits and you need to update or some application goes end of life and you’re screwed because updating becomes a massive exercise

2) do regular updates and patches to the entire stack, including Linux, in which case, you’re in the same position you were before with running on the stack rot treadmill

So you might’ve moved the rot to a different place, but I don’t know if you’ve reduced any of it. I’ve owned stuff deployed off of vanilla VMs and I actually found it harder to maintain because everything was a one-off.

To be clear, they have been doing this for so long I was first told it by a friend in the travel sector almost 20 years ago, along with the explanation of why this ends up absorbing a frightening proportion of the spare money in the economy.

The whole reason Google had such a nightmare over Facebook was FB is the only thing that broke their monopoly on this, which is why FB also prints money.

But, as a Google employee for about a decade at this point, I really do think that the company is trash when it comes to planning and coordination and is getting worse at it over time. I think that there are a lot of things it never really needed to learn how to do because the ads money is just so outrageous.

A lot of folks agree though that the smarter play would have been just just sit more on the sidelines intentionally and wait for the bubble to burst, then buy up stuff cheap in the resulting fire sales. AWS should have just focused on the core compute and storage services, which they do well.

AWS simply doesn’t have the right talent to do well in AI at the moment and the folks they did have mostly fled elsewhere.

Coal retirement in the US is almost entirely driven by economics. If someone needs the power, coal plants will stay open and capacity factor go up.

https://www.eia.gov/outlooks/steo/report/elec_coal_renew.php

What I always feared as a user was that they'd invent a new billable metric, which happened a few times. Have you ever seen a utility add them at this pace? The length of your monthly usage report shows all those items at $0 that could eventually be charged. Let that sink in.

Another interesting element is that all higher level services are built on core services such as s3/ec2. So the vendor lock in comes from all propaganda that cloud advocates have conditioned young developers with.

Notice how core utilities in many countries are state monopolies. If you want it to be a true utility, perhaps that's the solution to get them started. The state doesn't need a huge profit, but it needs sovereignty and keep foreign agents out of its DCs. Is it inefficient? Of course. But if all you really need is s3/ec2 and some networking / queuing constructs, perhaps private companies can own higher tier / lock-in services while guaranteeing it runs on such a utility. This would provide their users reduced egress fees from a true utility which doesn't need (and is not allowed to have) a 50x profit on that line item.

S3 goes down, your entire data infrastructure (and systems attached to it) is out of reach. Local backups that can be deployed and run like S3 as if your services are still up, unless I’m mistaken, aren’t very common and would mean doing the thing you got S3 to handle in the first place. A generator is much easier to set up and use to solve the problem in a 1:1 way comparatively with zero dependence on local utilities and click on almost quite literally the second you lose power. Yeah they can’t run forever and aren’t the most cost efficient, but people use them weeks and have 100% function of all electronics in their home again.

I am not responsible for building and deploying these systems, I just depend on some of them at my job and interact with S3/media convert a ton. My understanding has always been that backups that can be restored very quickly are the aim, not trying to keep all the things attached to S3 running as if it’s still going. But if I am wrong please let me know and I would love to hear more from folks about this! I actually find this whole dance very interesting

It’d lead to direct comparisons between clouds (as someone who had estimated moving legacy work loads it’s a shit load of work to get a reasonable “drive away” price for one of them and the work is duplicated to do it for the other).

If they are truly commodities then than goes away as does their margins to large degree - none of them want that.

Beyond that there are a lot of new chip companies attacking the market: https://news.ycombinator.com/item?id=45686790

From the technical/talent/funding side, I agree with you. With Alphabet, the real risk is that they lose interest/focus and kill (or pivot) products early. I don't really see that happening in the short term (considering the hype/investments/cash around AI) but maybe in the medium to long term if things start to get stale.

Even with that risk though, I agree with you.

Alphabet also has massive market share with YouTube, solid cloud offerings, Waymo which already has driverless/unsupervised robot taxis and their old standby search which is morphing more into more AI answers when you throw questions in your browser.

Alphabet's P/E ratio is lower than the S&P 500's. Some may argue the S&P is mostly being held up by Tech and AI related companies so stock in Alphabet could be seen as undervalued and NVDIA as overvalued.

Hardware almost always ends up getting commoditized so investing in hardware companies for the long haul does carry maybe more risk than mainly software companies.

I remember when SCO had an all hands meeting that they evaluated that linux wasn't a threat because SCO was the safe choice, the big player in UNIX on commodity hardware.

I don't think tech works that way.

Wouldn't one possible solution be just adding a sidebar with ads for products/services relevant to the current topic? They don't need to change the model output to have ads. (Not advocating for ads, just pointing out there's lots of ways to deliver ads)

That is the nightmare scenario. The puzzle for me is why you apparently think it just a trap for Google. All of the pure AI companies are burning cash. That is going to stop. Either they go broke, or they do something with ads.

There is a third option I guess, and that is they create something that is useful enough to be worth paying for. It won't be just an LLM, but as far as I can tell they are all just fine tuning LLM's. We already know what the limits of an LLM are, as we are already there.

All except Google that is, who are building AI's for all sorts of things, such as protein folding, weather prediction and driving cars. LLM's were their invention, created by them for doing translation and OCR. And unlike everyone else, they aren't dependent on NVidia as they use their own internally developed hardware. Surely there is no argument about Google being the world's power house of AI?? Most of these efforts will be experiments Google is infamous for abandoning. But it's seems likely one or two will become the youtubes of AI.

I can't see anything remotely comparable from the other AI companies. It's difficult to see how this doesn't end with Google completely dominating the space, and all these LLM companies going broke.

I ask, because earlier this year I had the chance to use a Waymo for the first time. I moved a good chunk of my portfolio to GOOG after that.

To me, Waymo felt like either Magic or stepping 15+ years into the future; Demolition Man stuff (im a child of the 80s, Xenial).

Stuff like Waymo, AlphaFold and similar are just so far away from anybody else, that Alphabet could split in several companies and all of them would be hugely dominant in the future. And none of them base their revenue in advertising.

Wasn't the "fuzzy search" that ignored keywords run by some sort of LLM? I.e. "lady gaga age" would return documents with "lady gaga old" etc.

But if you are a consultant, why pray tell are you spending that much time in the console except for occasional monitoring? Everything is either CLI commands or infrastructure as code.

And the issue with Google in particular is their customer support and business enterprise go to market sucks. The sales guys at ProServe use to run circles around GCP and never really took them seriously or had talking points. For big contracts we mostly had to compete with Azure because big boring enterprise was already using Microsoft.

When we did have to compete against GCP - and their sales team didn’t blow up the deal themselves - we just had to say “do you really want to trust Google with your workloads? Look at their history of abandoning products and raising prices”

Apple is a customer of all of the big cloud providers and was on stage at last year’s reinvent.

AWS throws money and people at startups. I’ve been on three sides - working at a 60 person startup who hosted on AWS, working at ProServe and now a third party consulting company where many deals come about because of AWS funding.

But Alphabet SEC filing discloses its revenue-generating operations are (a) online advertising delivery, (b) cloud-based solutions and (c) sales of other products and services

US law requires the statements in Alphabet's disclosure to be accurate, not misleading

Nothing requires statements in HN comments to be accurate, not misleading

What is "(profitable) information index"

Is it part of (a) online advertising delivery, b) cloud-based solutions or (c) sales of other products and services