The Future of Google (Spoiler: It’s Pretty Bright)

google logoI’ve just finished a piece on Google’s uncertain future. Bit odd, you might think, given it’s one of the world’s biggest and most profitable companies.

Well, the initial brief was based on the web giant missing analyst expectations for Q4 2014. Which it didn’t do by a long way, but there you go. Although it has since bounced back with a storming start to 2015, there’s still enough latitude to ask where the firm might be headed over the next decade. Where are its core strengths, and how it will cope with the slow down in ad spend, increasing competition from the likes of Facebook and the move of more ad dollars into mobile, etc etc.

Google is in a lot of ways a company of two parts: the shiny, innovative, envelope-pushing start up putting huge amounts of cash into cutting edge technology projects that could transform the world in years to come; and the cash-hungry advertising behemoth. The problem it has is that the former relies on revenue from the latter to continue, although this is declining. The key I think will be Google’s ability to pull in more revenue from new streams going forward.

One of these will be video.

“I think for Google YouTube will remain a key strategic play and over the long term a strong source of revenues. YouTube combines two major digital advertising channels into a single location – search and video,” Ovum analyst James McDavid told me.

“Ovum’s forecast data shows that search is still the single largest segment of digital advertising spending but video is the fastest growing. Google having market leading plays in both sectors bodes pretty well for their future.”

Another key area is likely to be mobile, and Android is well placed with a market leading share. Google has a great opportunity to increase sales of services, ads, licenses and devices as well as peeling off a healthy cut of app sales. Only the huge market of China, where Play is locked out, and the potential fragmentation of the OS, threaten it here.

Quocirca founder Clive Longbottom agreed that Android represents Google’s best opportunity platform wise going forward.

“Chromebooks have been a bit of a disaster: a hell of a lot of work is required to make Chrome into an OS that works effectively and brings all the other Google services together in a way that really works,” he told me.

“Android, however, has been a runaway success – it is probably better for Google to concentrate on Android as the OS with a Chrome layer on top in a looser way than it has tried to date.”

I’ve only just had time to scratch the surface here; there’s also a great opportunity in cloud services, IoT and wearables and more for Google. It’ll just be interesting to see how it gets there – and whether any others can realistically challenge the Mountain View giant over such a wide sweep of product and service areas in the future.

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Rackspace goes East with first Asian public cloud launch

cloudOpenStack cloud vendor and Amazon–agitator Rackspace Hosting is launching its first public cloud offering for Asia in Hong Kong today, so I caught up with APAC MD Ajit Melarkode to talk all things Hong Kong, cloud and Rackspace.

I covered the news over at The Reg. Given that not many businesses rely solely on the public cloud, the announcement can be seen more in context of Rackspace’s Hybrid Cloud offering – which allows users to mix and match between public and private cloud and dedicated server hosting.

As such, I’m sure IT managers in the region will be keen to have another option for their cloudy needs.

They should also be assured that Rackspace is certainly investing significantly in the region, and Hong Kong, Melarkode told me. “We’ve sent a lot of Rackers out to set up here,” he said. “We’re not treating it as a satellite office – Hong Kong has really come into its own this year.”

Testament to this is Melarkode himself, who has experience of running operations on the ground in the region, and the fact that the firm is setting up dedicated finance, HR and marketing departments, as well as hiring a regional CTO, lead engineers, SMB and enterprise support staff, and ensuring that there is a good spread of local language speakers.

So who is Rackspace hoping to target with its new offering? Well, according to Melarkode, the growth of the Hong Kong office and APAC hub can be seen in parallel with the expansion of Rackspace customers into Asia: “as our customers expand we expand with them – we’re driven in a major part by client requirements”.

Another market he mentioned was that of the smaller innovative local companies in industries like retail and technology which are unencumbered by legacy infrastructure and are “leapfrogging onto new technologies like mobile and cloud”.

Melarkode was unsurprisingly quick to leap to the defence of Asian firms, which are often branded as copy cats and accused of lacking the ability to truly innovate.

He argued that creating services on top of “building blocks” already developed in the West does not necessarily amount to copying – and pointed out that firms from the region are contributing code to OpenStack, which he claimed is certainly not the behaviour of a technology laggard.

The region in general, while perhaps slightly behind the West, is certainly catching up in terms of the maturity of its IT services industry.

“I’ve seen how the region has developed right from the time Indian outsourcing started blooming in 1993, to the more hardware and infrastructure  focus in China and the BPO success taking hold in the Philippines,” he explained.

“What I see is lagging behind here but the pace is still fantastic. Look at how it’s catching up. Lots of clients used cloud just for back-up and storage but now they’re starting to use it for app testing and development. The catch-up rate is astonishing.”

Rackspace will certainly need that maturity to expand beyond the handful of early movers in APAC if it’s to recoup some of its growing investment here.

Things are moving pretty fast, though, with the firm doubling headcount and its datacentre space in Hong Kong to meet expected demand and with plans to do so again in the coming year, Melarkode said.