Joseph Scott’s Blog

A couple of days after suggesting that Sun should offer cloud services they announced that they would be supporting Amazon EC2 by having it run Sun’s OpenSolaris and offer MySQL support for instances running on top of EC2. Nice, but not any where near what I’m hoping for. So I started looking at the other side of the coin, what things are keeping Sun from being able to offer pay as you go consumer services? One thing quickly came to mind: dealing with many payment transactions, often for small amounts.

The beauty of pay as you go cloud services is that you pay for what you use. If you only use a small amount, you only pay a small amount. My S3 bill each month rarely goes over $5, because I only use it in small amounts. Amazon charges my credit card and sends me an email with the details. But for most companies doing lots of credit card transactions for small amounts simply isn’t worth it. The fees associated with credit card transactions add up fast when dealing with such small transactions. At least for most companies.

Amazon has been doing large volumes of credit card transactions for a number of years, I’d be very surprised if they don’t have some custom fee structure for processing them. When you do the volume of transactions that a company like Amazon does, that gives you a little more leverage. So part of what has allowed Amazon to grow into the pay as go cloud services market is the fact that they already had a large payment system in place that allows them to process even fairly small transactions efficiently.

This gives Google Checkout an even more important role than just being a competitor to PayPal. With AdWords and AdSense already going, Google already has plenty of reason to want the same sort of leverage Amazon has for processing payments. With Google App Engine expected to have a similar pay as go structure as AWS, there will be even more focus on processing small amounts without taking a big hit on fees.

Now back to Sun. As far as I know Sun has nothing that even comes close to Amazon’s volume of transactions or Google’s small fee services. So they’ve had no reason to build up an efficient payment system that can handle small amounts. This leaves them with two choices, build one to try and gain the needed leverage to reduce the fees involved, or partner with someone else who already has. So far they’ve gone with the later, specifically Amazon and their EC2 service.

One way around the small transaction amount problem is to have customers pay in advance. Sun could still offer pay as you go services, but you have pay for them upfront in $100 increments. Each month your usage fee would be deducted from the amount you already paid them. If I only used $10 this month, I’d still have $90 left in my account. This isn’t nearly as attractive from the small customer side as simply paying $10 per month from their credit card, but not horrendous either, especially if you could get the minimum pay in advance amount down to something under $50.

I’d really like to see more competition in the cloud services space, but so far Amazon has it pretty much all to itself (which a small niche potentially going to Google App Engine). And unless companies like Sun can find ways to process small payments efficiently we might not be seeing any for a long time to come.

One of the neat things about Google Docs is the ability to share the document with others. You can do this with anyone just by knowing their email address. Google will then send an email out that looks something like:

I’ve shared a document with you called “Spam sharing test”:
http://docs.google.com/a/example.com/Doc?id=xxxxxxxxxxxxxx&invite=

It’s not an attachment — it’s stored online at Google Docs. To open this document, just click the link above.
—

Shared this doc with you.

Which is a really handy way to collaborate with others on a document. And it seems the spammers have discovered this as well.

I’ve recently started seeing emails for documents that I’ve been invited to, which turn out to be just a bunch of spam. They’ve taken Google Docs and are using it in an attempt to mask their spam from email filters, by providing link to a service you might normally trust. I suspect that Gmail is unlikely to mark any doc invites as spam.

Currently this seems to be pretty limited, the spammers have to paste in the email addresses into an invite box. Google could do some basic things to prevent spammy looking invites from going out (do you really mean to invite 3.78 million people to share your document?). I’m not aware of a Google Docs API that allows you to script doc invites, but if there is one (or if they come out with one later) then you can bet the spammers will make use of that as well.

This will turn into another wack-a-mole situation, where Google will (hopefully) revoke accounts and API keys for users who are sending out spam in this way. Then the spammer will just start using another one of the 324,834 accounts that they’ve already created at Google until it gets blocked too. Rinse, lather and repeat.

Today’s big news was the announcement of Google App Engine. Plenty of people have been covering the details, I just wanted to leave a few thoughts:

This looks like an amazing service. Being able to make use of Google infrastructure for your web app is a wonderful idea. Currently limited to Python, so all the Python fans are going nuts.

What Google App Engine (GAE) isn’t is a direct competitor to Amazon’s web services (EC2, S3, etc). What Amazon provides are virtualized services, what GAE provides is a specific platform. While that platform is pretty amazing, it is also complete and total vendor lock in. If you needed to move your application off of GAE, how would you do it? This might give pause to those interested in buying your startup.

There’s an SDK for starting your app before going live, but no way to migrate data from your test system to the live server. I imagine as people begin to use this new platform they’ll find other issues as well. That isn’t to say that GAE isn’t worth while, just that it isn’t a miracle cure.

The top search result for prologue on Google is Matt’s Prologue theme announcement. That same announcement post is number 5 on Yahoo! and on Live Search / MSN Search it doesn’t show up on the first page of results at all.

Feel free to speculate on those data points.

Earth to Google, I am not a virus or spyware. I’ve been using your services for years, I have deleted all of my Google cookies and answered your captcha several times in the last few days, yet you still insist on not processing my search requests. Since most of my searches are done from the search field in Firefox it is very easy for me to switch to another search engine. Which I’ve now done.

I realize that I’m just one lone user in a sea of millions, so my switch to using Yahoo for search is unlikely to make a dent for you. For me though this is a big deal. I’ve relied on your services for years and hate the idea that I won’t be able to continue to use them for years to come. You better not screw up Gmail or Gcal, exporting all that data to another service would not be fun.

At some point in the future I’ll be checking back, hopefully by then you’ll have gotten over your “Joseph is a virus” obsession. Because I’m sure there are lots of spyware applications out there looking for city boundary maps of the city of Sandy, Utah.

• The Google Enigma - This was a really interesting read. Are huge tech companies like Google changing everything about business, or confirming what we already know? I have to wonder if Facebook will be going through a similar analysis one day.
  Tags: google business

• 5xm.org / Avatars - Plugin for Mac OS X address book application to download gravatar images for your contacts.
  Tags: addressbook macosx gravatar plugin

Just in case anyone suggests that I might have anything useful to say in the area of stock picks, let me tell you a story. When Google IPO’d and the stock was available to “normal” folks at around $100-ish per share I laughed. I thought, who in their right mind would pay $100+ for a share for Google?

That was some 3.5 years ago, now it trades slightly higher. The moral of this story? Don’t let anyone ever tell you I’m any good at giving stock tips.

• Google Options Make Masseuse a Multimillionaire - New York Times - The amount of money Google has been printing is amazing.
  Tags: google

• Danish Royalty Free Icons - Nice looking application icons.
  Tags: icons

• cybertec - PostgreSQL Database Company - Schönig & Schönig GmbH - Kontakt - Synchronous replication system for PostgreSQL.
  Tags: postgresql cluster replication cybertec

Google purchased GrandCentral.

I want this to indicate that GrandCentral will get better and have fewer scaling issues. They are going to limit their future growth via an invite system (remember when you had to have an invite for Gmail?).

It appears that Google Trends stopped back in November 2006. Did I miss something? The about page doesn’t have any mention of this, only stating that:

We’ll aim to update the information provided by Google Trends monthly.

There has been some discussion about this on the Google Trends group list, but no responses from Google. I’ve emailed labs+trends@google.com asking what happened.

Perhaps Matt Cutts could offer some insight into what is going on.

Google Mac Engineering Manager Amit Singh announced a port of FUSE (Filesystem in Userspace) to Mac OS X: MacFUSE.

It would be really great if Apple would integrate into this OS X. It has a BSD license so that shouldn’t prevent them from using it. Making it work with the Finder would be helpful though.

When Merriam-Webster added google/googled/googling to their dictionary Google made some rumblings about how they weren’t happy to see their trademark become a verb. This wasn’t because they weren’t thrilled to be popular, but because they were worried that they’d eventually loose their trademark.

That was all fine and good until yesterday, when Google managed to tick off nearly everyone with a single blog post: Do you “Google?”.

Granted this probably came about because their legal team figured it would be a good way to show that they are trying to protect their trademark. But their specific approach certainly came across as, hmmmm, demanding. And if there is one thing that the world of open source/api/mashup folks don’t care for is being told what they can and can’t do. Sorry Google, I think you blew it on this one. Expect people to do exactly the opposite of what you just told them to do.

The official word is out, Google purchased YouTube for $1.65 billion in stock. Amazing. Many of the rumors mentioned that Google may be going after this, at least in part, to make sure that Yahoo and Microsoft don’t get ahold of YouTube. I wonder if we’ll start seeing that as a trend purchases of Yahoo, Microsoft and Google.

It will be interesting to see where Google’s stock goes tomorrow.

Seems Google has been busy lately, announcing their Google Code Project Hosting at OSCON. NewsForge has an interview with Greg Stein and Chris DiBona about the new offering. More comments on the new service can be found at Slashdot and Techcrunch.

From the very beginning Greg came out and said that they aren’t competing with SourceForge.net. At some level this is certainly true because the feature set that Google is targeting is different that SF (SourceForge). In general though this is direct competition to SF, and it is good to see. SF has had problems for years and have never really been able to keep up with the demand. It isn’t clear that Google will be able to either, but hopefully the competition will drive everyone to be better.

The big news for today: Google Checkout. There is an official announcement about the service on the Google Blog, complete with a 2 minute video touting Google Checkout features. This service has been expected for quite awhile (remember the rumors about Google Wallet?) and has been widely seen as competition for PayPal.

I think Google might finally be learning some lessons from Microsoft. First, they need add new services that generate non-ad based revenue. With a stock price of over $400 per share I expect to see more and more pressure applied to Google to generate A LOT MORE MONEY as time goes on. Second, leveraging new services with what you already have. Integrating the service with AdWords will provide a way for Checkout to grow. Not only grow, but grow in a way that others (PayPal) will be unlikely to duplicate, at least not easily. Third, many people still trust Google, so now is the time to strike before a major reputation dip hits. There are are of course plenty of people who have been distrustful of Google for quite awhile, but I think the “main stream web user” still gets a mostly warm fuzzy feeling when using Google services.

If Google really has learned some of these lessons, expect the integration march to continue. How about sending payments via Gmail, Google Talk, or SMS? Scheduling payments via Google Calendar? Twisting this around a bit, how about getting Checkout credits instead of a check for your Google AdSense account?

There is a reason that PayPal has been making features similar to these available, because Google can come in and do it without having to partner with anyone else.

This might be another example of Google coming into an existing field late in the game, but doing it so much better than everyone else that they quickly become the dominant player. Then again, Google has launched so many so-so services over the last 18 months that may do nothing more than live on life support.