GoogleGazer

Kevin Maney, Portfolio.com had an astute analysis in Wired about why Hewlett Packard (HP) decided to lay out $12 billion to buy Electronic Data Systems – it’s in recognition, he says, of the shift to “cloud computing” a red-hot area going forward for IBM, Amazon and Google, also known as hardware as a service.

Google and Amazon both mastered the art of cheap, massively parallel, fail-safe computing. Increasingly, they are offering their hosting services to others. HP, it seems, is at least as interested in cloud computing as consulting.

Kevin quotes Jeff Bezos of Amazon: “We’ve been working on our Infrastructure Web Services for four years,” Bezos said. “We launched our first one two years ago, the Simple Storage Service, and I am astonished — I rarely meet a startup company these days who isn’t using our web services and now we’re starting to get, you know, deployment inside Enterprise level data centers as well. So it’s a very exciting.”

Asked about Google’s plans to get into a similar business, Bezos said: “Well … we really do have a practice of not talking about other companies. But this, like our retail business, (there) is not going to be one winner. I think there are going to be multiple winners pursuing different flavors or strategies, different kinds of products…. I think our web services business is going to be part of what becomes an important industry. And … important industries are rarely made by single companies.”

He continues, “Asked about Google’s plans to get into a similar business, Bezos said: ‘Well … we really do have a practice of not talking about other companies. But this, like our retail business, (there) is not going to be one winner. I think there are going to be multiple winners pursuing different flavors or strategies, different kinds of products…. I think our web services business is going to be part of what becomes an important industry. And … important industries are rarely made by single companies.’ “

While Google and Amazon may both be building “infrastructure businesses,” in my humble opinion, this misses the point. What Amazon, and even more so Google have learned to do is to build enormous and profitable web-based businesses offering services, either totally free or very cheaply. They are really doing “software as services” while others are just talking about it. In future posts, we will look more closely at some of Google’s emerging businesses, like Google Apps, which seriously threaten the desktop-centric order of things.

HP’s CEO, Mark Hurd, is one smart fellow, and I’m sure he sees far more in EDS than merely the provision of consulting services in order to keep up with IBM. Perhaps, EDS has strengths in “cloud computing” that we don’t know about, or maybe, just maybe, another shoe is yet to drop that will fill in the missing piece of the puzzle.