Google’s Head is in the Clouds

TORONTO. Google is out making the conference rounds pitching the benefits of cloud computing. The conference I’m at today is the IT 360 conference and the speaker this time is Matthew Glotzbach Product Management Director for Google Enterprise. I’ve heard Glotzbach speak before (at the 2007 Interop NYC event) and the basic premise of his Toronto presentation was similar as he once again pitched the glory that is Software as a Service (SaaS).

The difference though is this time he hinted at some interesting metrics that I personally had not heard before. Glotzbach showed a graph in which the price per user for  Gmail is going down year over year (from a Google perspective) , while at the same time the revenue per user (from AdSense) is going up. Glotzbach did not provide actual dollar figures noting only that if he shared that information he’d likely be out of a job.

Glotzbach’s basic argument is that scale drives unit costs towards zero. It’s a staggering concept and one that when you think about it really seems like common sense. Economics 101 taught me about the economies of scale and that’s what Google is all about scale.

“I don’t think on premise software is going away,..everything is
additive,” Glotzbach said. “Though usage models do change and I think that  more and more high usage
will move to the cloud.