There's a lot of buzz out there about how Google
AppEngine is a game changer. My question is: Which game?
AppEngine reduces the cost of hosting a web application down to zero.
Zero is a pretty profound number. You don't even need to provide a
credit card number in case they might want to charge you some day.
All you need to a mobile phone number capable of receiving text
messages. This means that not only is there no up-front cost, but
also that there is no risk that you will suddenly incur huge fees for
exceeding transfer quotas when you are lucky enough to be
Slashdotted.
Your application will just be temporarily unavailable. Hey, if that
service level is good enough for Twitter,
it's good enough for you, right?
The Open Source Game
Starting an open source project has been free for years. Many
project hosting communities exist, providing projects with source
code management, issue tracking, wikis, mailing lists, other
features, and even a little visibility within their directories. Web
hosting is not exactly expensive, especially light-weight scripting
languages like PHP,
Perl,
and Python;
but it still costs something and therefore requires a sponsor. Often
times for a fledgling project the sponsor is also the founder, who
also happens to be the lead programmer, help desk, and promoter.
There are some who do an amazing
job of doing this,
but for the most part I think project founders choose to wait.
Note: If I am wrong about the availability of good, free hosting
for open source web applications, please provide links to them in the
comments section. I would love to be proven wrong on this.
The Startup Game
If Paul Graham were to
comment on AppEngine, it probably be that it eliminates one of the
last remaining excuses
anyone may have to launching a web startup. If you have an idea,
some time, and can hack Python – you can launch a web application
with AppEngine. You don't need money, infrastructure, long-term
commitment, or any of those other things that may scare a person away
from a startup. With AdSense,
you even monetize your application without hardly any effort.
Of course there are limitations. For one thing, AppEngine is very
limited in what it can do. Pretty much any idea with even moderate
bandwidth,
storage, or computation requirements that cannot be delegated to
another web application (e.g. embedding YouTube
functionality) is out. So, unless you plan on building a business
based on mashing together existing applications, then AppEngine
probably is not your free
lunch. That being said, I fully expect that Google will
gradually add APIs for all of its applications
to AppEngine, thereby providing a very powerful base for new-but-thin
ideas.
The R&D Game
Just for a moment, let's say there was a company that required all
of its employees to spend
20% of their time
working on a project other than their primary job. This is a company
that is betting that it cannot predict which idea is going to be the
next big thing, so it must try lots and lots of things and see what
sticks. As this company grows, providing infrastructure for those
projects would become a real challenge. Especially providing
infrastructure that allows them to be testing in the wild as opposed
to simply internally, and allows the projects to instantly scale if
they just happen to turn out to be a success. This company would
also want to ensure their employees weren't slowed down by having to
deal with muck.
Such a company would need an infrastructure that could scale to
support many, many applications without burdening infrastructure
teams. Such a company would need AppEngine.
Now extend the idea further. Let's say it doesn't really matter
whether the next big thing was developed by an employee or not. What
matters is that the next big idea is bound to the company, for
example by using the company standard authentication
mechanism or, more importantly, the company standard monetization
mechanism.
Ok, so we all know what company I'm talking about. AppEngine
allows Google to outsource some of their R&D at very low cost,
and given that most successful AppEngine developers will probably
choose AdSense to monetize their creations, Google stands to profit
regardless of whether they ever pay any fees or not. In cases where
creators do pay hosting fees, the great Google gets paid twice.
The Recruitment Game
Distinguishing among potential recruits is very challenging. The
accomplished academic is almost certainly smart, may fall apart when
asked to work with a significant team on something important to the
company rather than a research interest. The industry veteran may
have great corporate experience, but political skills could be
masking shallow or outdated technical skills. The bottom line is
recruiting is hard because in most cases you never see a direct
sampling of an individual's work. At best you can see what a team he
was on produced and take at educated guess as to his contribution.
Open source projects can provide more information, but for most
programmers there is no real motivation to participate in such
projects.
AppEngine provides more motivation to the programmer, because he
can more readily show his creation to other people without incurring
any cost and there is always a chance that he will make some money.
There are probably a lot of talented “almost founders” out there
who would start a company, but perhaps lack some of the personality
traits necessary to do so or found themselves in a situation where
they need a steady income stream that simply isn't available for the
founder of an early-stage startup. These individuals, and others,
will make great pickings for Google.
Conclusion
Long term, in order for Google to grow, it has to attract more
people to spend more time on sites displaying AdSense advertisements.
Over the past few years Google has come out with countless new
online services, most of which on still in beta, and none of which
has yielded anything close to the monetization potential of their
search business. AppEngine allows them to vicariously service the
long tail without continuously expanding their already highly diverse
R&D efforts. As a nice added bonus it will provide the
opportunity to acquire future high-value startups before they are
even real startups by simply hiring the developers and maybe tossing
some stock options their way. On the flip side, I don't think
AppEngine is going to have much effect on mainstream web application
hosting. The API is too constrained and for a company with resources
the ties to Google are most likely too tight. So I predict AppEngine
will be more of a muted success for Google. The infrastructure built
for it will be useful internally, it will help them get more sites up
more quickly addressing eclectic needs without burdening employees,
and it will provide a proving ground for future hires and possibly
very early stage acquisitions. This could all add up to AppEngine
being a very significant success, but it also means the success may
out of the public eye.
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