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Weekly Column

Oh Brother Where Art Thou?: The only way left to compete with Google is P2P with a twist.

Status: [CLOSED] comments (89)
By Robert X. Cringely
bob@cringely.com

Last week's column was about my prediction that Google intends to use these data centers it is building to essentially act as proxies for the Internet and come to the aid of all the broadband ISPs as our Internet video fix drives their backbone costs through the roof. Google will do this through peering arrangements with the ISPs that will give the search giant unique high-bandwidth access to broadband users with the result that most big media companies will go through Google, rather than through the public Internet, to reach their customers. Think of Google combined with a Super Akamai. Think of Google literally becoming the Internet.

The only reaction I received from Google, itself, was from a worker in one of those data centers who said, "I can neither confirm nor deny how very, very wrong he is."

Clever.

But when I ran that by another friend who is a top technical guy at one of the top Internet companies in the world, he said, "Last I knew, most folks who actually 'work' in the data centers of any tech company fall into the Operations' org of the company, even if they are 'engineers' with engineering degrees. And I'm sure you can infer what I think of Operations' folks' knowledge of what their company is planning. In all my years, I've never told any of my Ops folks at any of my companies anything about the future plans, technical or otherwise. Hate to sound like a tech elitist, but, there's a reason why they're in Ops versus Eng/R&D."

Only time will tell whether I am right or wrong about Google's strategy, but I am totally convinced, which brings me to this week's column on potential strategies to counter Google.

In one sense, I have no reason to want to counter Google. What do I care if they beat their most obvious competitors -- AOL, MSN, and Yahoo? It doesn't matter much to me, because Google's theme is one of helping users, and if AOL, MSN, and Yahoo go under, who cares? Still, it is always nice to have alternatives just in case Eric Schmidt undergoes a megalomaniacal transformation and turns Google toward the dark side of the Force.

How do you compete with Google if this is indeed their strategy? Well the first thing to decide is whom I mean by "you." It's probably not the broadband ISPs, themselves, because even though they'll be undermined by Google and huge chunks of potential revenue will be taken from them, they may still come out ahead. That's because Google will also allow them to cut back their bandwidth and server costs. No, the potential Google competitors aren't ISPs, they are portals like AOL, MSN, Yahoo, and many others -- content companies not viewed as potential customers by Google.

How will these three companies compete with the Google proxy strategy? As far as I see, they can't compete. They come up short in too many ways, but the biggest way is money, moolah, cash, loot. None of these companies can afford to do what Google is doing, building hundreds of huge data centers around the globe.

It may be surprising to think that Microsoft doesn't have enough money to compete with Google since Redmond is sitting on something just under $29 billion in cash right now, and could borrow tens of billions more if needed. But while Microsoft COULD come up with the money, I seriously doubt that they WILL come up with it, at least not in time to have a real impact. Microsoft has too many businesses going right now with operating systems, applications, games, services, and other hardware. Bent on its own course of world domination through the xBox 360, Microsoft probably sees little reason to rush after Google in a fit of data center building. This is something I am sure Google is counting on.

As for AOL and Yahoo, neither have the financial resources to compete. Starting after Google, they couldn't raise money fast enough to even get in the game. If I am correct, these two companies are doomed.

So of the three logical Google competitors, one won't compete and two others can't compete. That leaves you and me as the only potential competitors to Google in this race.

We started this, remember, first with our BitTorrent and eMule antics and then with our YouTube compulsion. We are creating the bandwidth demand that will ultimately force our ISPs into the arms of Google. So if there is going to be an alternative to Google, that will have to be us, too.

It's pretty simple, really. As more and more video hits the web, ISPs will find themselves crushed by demand that will drive up their backbone costs until all profit is driven from their businesses. Google will come to the rescue with regional data centers that will peer with local ISPs and relieve them of much of that burden, allowing the ISPs to actually cut back their backbone connections and run fewer servers, though at the cost of losing the big movie studio and TV network business deals those ISPs currently think will eventually make them rich. If we look at what Google will be offering, it is bandwidth and server power. So to compete with Google will require bandwidth and server power.

Server power is easy if we embrace peer to peer. Let BitTorrent or VeriSign's Kontiki or Grid Networks or even the new Joost video distribution system from the founders of Skype carve server power out of millions of user PCs. Joost, by the way, is probably the best thing that ever happened to Google, since it will drive a stake into the hearts of broadband ISPs with more panache than old BitTorrent could ever display. So let's allow our problem to provide its own solution. If Google is throwing one million servers at the market, the market can easily respond with 10+ million PC peers, no problem.

The great advantage of P2P for this application is not only that is costs a lot less, but it appears exactly where you need it and with proper promotion the capacity is almost infinite.

But that still leaves us without enough bandwidth. Google will be using its own fiber connections to reach all the broadband ISPs, so any successful response would have to do that, too -- something that I see coming together quickest and cheapest as a kind of confederation of ISPs and optical fiber networks.

The trick here is to see the difference between dark fiber, lighted fiber, and Internet fiber. The most expensive of these is Internet fiber -- fiber connected directly to the Internet and for which ISPs are paying premium prices. What those ISPs need to make P2P work better, however, isn't fiber connected to the Internet but fiber that's connected to other ISPs but NOT to the Internet.

From an ISP's perspective, P2P is annoying in any case but becomes REALLY annoying when peers have to find each other by reaching out over the public Internet. If somehow that copy of American Idol could be found by polling only local nodes, then the cost of P2P would be much lower for ISPs. In fact, it would be almost nothing. The trick, then, is to expand the number of local peers to increase the likelihood that all the bits can be found on the local net.

Broadband ISPs with huge subscriber bases in major markets have an advantage when it comes to local peering, but in the end there aren't generally enough local peers to ever do the job completely. So why not make every user in the whole darned country a local peer?

This could be achieved by creating a parallel fiber network that interconnects all the ISPs but DOESN'T in turn connect to the Internet. This can be done to a certain extent with peering agreements between ISPs that share data centers, but it can't really be done without a lot of dedicated fiber to cover the many gaps in a network that was never deliberately designed.

Fortunately, there is still a LOT of available fiber, much of it owned by regional networks. The trick is to sign up all these regional networks that often follow power lines and gas pipelines. These smaller network players are generally interconnected already to all the local ISPs in their areas. They just don't know there is an opportunity to provide specific P2P service.

What would make this service viable from an ISP's point of view is if P2P bandwidth costs substantially less than Internet bandwidth. Here's where we face a pricing dilemma that is really more of a perception dilemma. If bandwidth on the parallel P2P network costs, say, one tenth as much as regular Internet bandwidth, well this would be a huge attraction for ISPs. They'd all sign up overnight. But can P2P bandwidth providers make money at such low rates? Yes they can, so long as the P2P rates don't drive down the rates on any separate deals they have to provide Internet bandwidth. Keeping these two sides apart may be too difficult, only time will tell.

But why would a bandwidth provider on the P2P network be willing to accept such low rates? There are two reasons: 1) they still have excess capacity, and selling that capacity at anything over their fixed costs puts them ahead, and; 2) the P2P network would give this confederation of networks the same kind of backdoor into ISPs that Google is spending billions right now to leverage. For almost no expense the P2P network can offer to TV networks and movie studios a service that is in many ways superior to Google's plan while also being substantially cheaper.

Short of Microsoft waking up and smelling the coffee, this is the only way I can think of to beat Google or to even compete at all.

Comments from the Tribe

Status: [CLOSED] read all comments (89)

You are right, and to know how right you are, go check: http://webaccelerator.google.com/

What does this small piece of software do for you, you wonder? Why, it just reroutes all your internet traffic through Google. For real.

Vahid | Feb 03, 2007 | 1:46AM

Is Google's support for net neutrality aimed at effectively crippling ISPs ability to deliver further network investment, so that Google can muscle in with all that capacity when the ISPs collapse under the weight of video traffic?

andrewww | Feb 05, 2007 | 12:23PM

Utilities encouraging data center effeciencies thru server consolidation & virtualization. Kind of fits with GOOG apparent plans I think

PG&E Leading Coalition of U.S. Utilities to Capture Energy Efficiency Opportunities In Data Centers
Tuesday February 6, 12:00 pm ET
Utilities to Share Program and Service Models, and Market Strategies in Booming Tech Sector


SAN FRANCISCO, Feb. 6 /PRNewswire-FirstCall/ -- Pacific Gas and Electric Company announced today that it is leading the formation of a nationwide coalition of utilities to discuss and coordinate energy efficiency programs for the high tech sector, focusing on data centers.


"We have developed program and service offerings for the information technology industry, and sharing our knowledge with other utilities will drive energy savings and environmental benefits more widely in this rapidly expanding market," said Roland Risser, Director of Customer Energy Efficiency at PG&E.

PG&E offers a comprehensive portfolio of program and service offerings for the high tech sector, including financial incentives for customers who pursue energy efficiency projects in their data centers. The company was the first to offer incentives for virtualization and server consolidation, a program that is prompting customers to remove underutilized computing equipment using virtualization technology.

PG&E has already undertaken coordination efforts with Southern California Edison and San Diego Gas & Electric so that program offerings are consistent across the state, and is now reaching out to utilities in key markets across the country.

"The Pacific Northwest, the Southwest, and Northeast are on the top of our list, because these areas have the greatest concentrations of data centers," said Mark Bramfitt, High Tech Segment Manager for PG&E.

The Northwest Energy Efficiency Alliance (NEEA), TXU Energy, Austin Energy, New York State Energy Research and Development Authority (NYSERDA), and NSTAR, have all signed on to the coalition.

Many regions across the U.S. are experiencing huge new demands for electric infrastructure as data center operators construct new facilities. Nationwide, existing data centers are experiencing space, cooling, and energy capacity issues. Utilities such as PG&E are offering energy efficiency programs to help customers live within their existing data centers, and to moderate the energy impact of new ones.

Data centers can use up to one hundred times the energy per square foot of typical office space, so the energy efficiency opportunities are significant. "A customer choosing from our menu of programs, which include cooling system improvements, high-efficiency power conditioning equipment retrofits, airflow management tune-ups, virtualization, and replacement of computing and data storage equipment with the latest technologies can generally drive a third to as much as half of the energy use out of their operations," according to Bramfitt.

The virtualization and server consolidation program is generating tremendous customer and industry interest, with some customers reducing their equipment counts by ninety percent or more. One PG&E customer made use of virtualization technology to consolidate 230 servers onto just eleven new machines, and is now considering a second project to consolidate an additional 1000 servers.

Northwest Energy Efficiency Alliance

"The Northwest is experiencing substantial growth in data centers with new facilities recently constructed or announced by Google, Microsoft, Yahoo and others. With relatively low-cost power co-located with access to high- bandwidth internet infrastructure many more facilities are projected to be landing in the four-state area in the near future. The electric load represented by these facilities is significant and it is in everyone's best interest to build-in as much efficiency as possible. NEEA is pleased to join with other organizations nationally to identify and encourage efficiency in this industry."

New York State Energy Research and Development Authority (NYSERDA)

"As part of NYSERDA's mission to use innovation and technology to solve New York's most difficult energy and environmental problems in ways that improve the State's economy, it is of utmost importance that we proactively address the increasing energy demand of the rapidly expanding IT infrastructure in New York State."

NSTAR

"The high tech sector is ripe for energy efficiency improvements," said Penni McLean-Conner, Vice President of Customer Care at NSTAR. "We look forward to working on this nationwide effort to implement new energy efficiency strategies here in Massachusetts."

For more information about Pacific Gas and Electric Company, please visit our web site at www.pge.com


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Source: Pacific Gas and Electric Company

jc | Feb 06, 2007 | 4:05PM