What’s In a Name?

For starters, they both feature similar names. Simply take your company name and slap TV on the end. Very original, Google, but a point goes to Apple for having the idea first.

Beyond just what’s on the box, though, what do both of these companies stand for? What do users really associate with these brands? For Google, it tends to be searching and information. For Apple, it tends to be entertainment. You can back up this argument just by looking at what these companies do. Google has set the standard for search engines and Apple has created an entire ecosystem of products around iTunes, including content and third-party support.

How Does the Hardware Match Up?

Details on the new Google TV are sketchy, though we know it’s really more of a platform than just a piece of hardware. External set-top boxes will be produced by Logitech and partners like Sony will build the technology into their televisions. Additional television vendors will be added over time as they build in the technology as well. But how does the hardware compare? Here’s what we know.

Google TV

• 1.2GHz “Sodaville” Atom Processor
• 4GB of Memory
• 802.11n Wi-Fi & Ethernet
• Dual HDMI ports
• Dual USB ports
• S/PDIF out
• Video Chipset: Unknown
• Storage: Unknown
• OS: Android

For comparison, let’s look at what the current Apple TV offers.

Apple TV

• 1GHz “Crofton” Pentium M Processor
• 256MB of Memory
• 802.11n Wi-Fi & Ethernet
• HDMI port
• Component Video, Stereo Audio, Optical Audio Out
• USB port (for service only)
• Video Chipset: NVIDIA G72M with 64MB DDR2 memory
• Storage: 40GB or 160GB
• OS: Mac OS X 10.4.x

Purely looking at the specs, it looks like the Google TV blows the Apple TV out of the water, which is understandable considering the Apple TV hasn’t seen a hardware update (aside from a larger hard drive) since its launch in 2007. But rumor has it that a new Apple TV is around the corner and it could provide some stiff competition, boasting an A4 processor similar to the iPad and capable of delivering 1080p content.

The Experience

So what’s the big deal about Google TV? In Google’s eyes, it’s all about giving users the ability to find the content they want across a wide variety of mediums including broadcast TV, YouTube and pretty much anywhere on the Internet. The device also includes a built-in web browser (with support for Flash) allowing users to access content from virtually anywhere.

While the current Apple TV doesn’t support interfacing at all with broadcast TV, nor full Internet access, it still offers similarities with Google TV, like YouTube or accessing photos from the cloud from sources like Flickr or MobileMe. In fact, it even beats Google’s approach by tapping on the power of the iTunes Store, providing users with tons of content that they can buy or rent and download.

That’s really where we see a big difference in the strategies of both companies. On one hand, Google is attempting to aggregate all of the content from a wide range of places into one simple list of search results. How effective will this be? If I search for “Battlestar Galactica” will I find random YouTube clips, bootleg TV shows and other vaguely related ephemera mixed in? As I mentioned earlier, Google TV is a platform running Android, which means that an SDK will be available to allow developers to create specialized apps. In theory, Netflix could easily develop its own Google TV app just as it did for the iPad. Unfortunately, the openness of this platform can also be a disadvantage. Look at HTC’s Android-based products, for instance, which feature different interfaces for similar tasks.

On the other hand, Apple’s strategy has been to provide content that people want, but holding that content to a high standard of quality mixed with a simple to use interface. To see what I mean by this, look no further than the App Store which, for better or worse, has maintained a growing selection of quality apps. Or consider the iTunes Store. It’s easy to browse and find a show that I want, view any of the seasons that are available to purchase and sometimes even have my choice of SD or HD content.

While the current Apple TV may not have some of the features of Google’s offering, it does play very well with Apple’s iTunes ecosystem and that’s something that Google cannot, and hasn’t yet shown a desire to, compete with.

The Future

Even at this week’s D8 conference, Steve Jobs still referred to the Apple TV as a “hobby” and, while we are eagerly anticipating rumors of a cloud-based Apple TV to come to fruition, we’re still left where we began — a box that is just a hobby. In fact, at the conference he expressed his views on set-top boxes altogether.

The problem with innovation in the TV industry is the go-to-market strategy. The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box. Ask TiVo, ask Roku, ask us…ask Google in a few months. The television industry fundamentally has a subsidized business model that gives everyone a set-top box, and that pretty much undermines innovation in the sector. The only way this is going to change is if you start from scratch, tear up the box, redesign and get it to the consumer in a way that they want to buy it.

We’ve speculated before about what a future Apple TV could look like and rumors are circulating that the next version could be based on the iPhone OS. This inevitability opens the door to an App Store and, at least in my opinion, works to address the issue of getting content to the consumer in a way that they want to buy it. Apple has tried several approaches to this (iTunes Extras, for instance) but nothing has really seen the runaway success like the App Store.

For comparison, a good number of people feel the print industry is dying, but looking at the success of the Wired iPad app, all of a sudden developers have a powerful canvas to push existing content and new ideas of content to consumers. Would a similar model be successful in the living room environment? What do you think? Do you think Google TV will really be a game-changer or a lackluster platform? Is Apple’s direction or Google’s the best? Share what you think.

For those interested in cloud computing or data centers, check out our Structure conference in June.

Related GigaOM Pro Research: Google TV: Overview and Strategic Analysis

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What will Azure’s financial impact be? It’s hard to say, but I think it’s safe to assume that Microsoft, which has gotten used to the 50 percent (or higher) margins on its products, will see those margins shrivel in the face of the competition. Azure is joining a crowded marketplace, one dominated by Amazon and its web services, which now boasts of thousands of developers in addition to an entire ecosystem.

And if that wasn’t enough, Azure will be competing with offerings from IBM, Cisco Systems, EMC Corp. and VMware, Rackspace and other small players. Microsoft says it’s not worried, though and claims companies like 3M and GXS are already using the Azure cloud.

Not only are established partners and ISVs looking to the Windows Azure platform as a way to extend their revenue capabilities, but startups like Lokad are betting their businesses on it. Lokad has deployed a scalable forecasting cloud-based service to its retail and manufacturing customers that provides real-time forecasting data to allow for inventory optimization and ultimately bring them to profitability.

Notably, Microsoft’s Azure is part of Redmond’s “software-plus-services” strategy that also includes its Hyper-V server virtualization platform launched in October 2009. Microsoft also sells Windows Live, Microsoft Office Live, Business
Productivity Online Suite, and Microsoft Dynamics CRM as SaaS, making it part of the company’s larger cloud strategy.

Given how closely we at GigaOM have followed the Azure saga, I though it would be good to highlight some of our past coverage containing relevant details about Azure and Microsoft’s plans.

1. Windows Azure is a cloud operating system on which developers can build using .NET, Java, Ruby on Rails, Python and other languages. (From Everything You Need to Know About Microsoft’s Azure. )
2. Compared to infrastructure-as-a-service providers such as Amazon with Ec2 or Rackspace with its CloudServers products, Azure attempts to handle more of the actual management and provisioning of virtual machines for a user. (From Microsoft Azure Walks a Thin Blue Line)
3. If we view the data center as akin to a machine, Microsoft wants folks to be able to create applications that can run on a Microsoft Azure cloud or internally on an in-house cloud. Newly launched AppFabric is the solution for that. AppFabric is software that folks can run in their own data center to create an internal cloud that can talk to and share information with the public Azure cloud if the client wants. (From Stacey’s Microsoft Azure Walks a Thin Blue Line)
4. GigaOM Pro’s Derrick Harris thinks that AppFabric is the big edge for Microsoft. In a note he writes (subscription required): “Windows Server AppFabric will help users build application fabrics in their Windows environments to minimize the complexity of delivering enterprise applications as services. AppFabric achieves this through supporting RESTful or SOAP-based services, workflows and application-level monitoring. Additionally, AppFabric marks the first commercial presence of Microsoft’s distributed in-memory caching technology (codenamed ‘Velocity’). Its inclusion ensures that apps can scale at will without experiencing performance bottlenecks at the data layer.”

Here are the pricing plans for Azure:

Azure compute costs 12 cents per service hour, while storage service costs 15 cents per GB of data per month, with an additional penny for every 10,000 transactions. The .Net services platform costs 15 cents for every 100,000 times the applications built on .Net Services accesses a tool or chunk of code. Moving data costs 10 cents per GB of inbound data and 15 cents per GB of outbound data. SQL Azure is $9.99 for up to a 1 GB relational database, and $99.99 for up to a 10 GB relational database. (From Everything you need to know about Microsoft Azure)

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First up I was in the mood to pick up James Patterson’s latest — Witch and Wizard. I hit up Amazon, B&N, the eReader store (a subsidiary of B&N), Fictionwise (another subsidiary of B&N) and the Sony Reader Store. Here’s what I found:

While the three major e-book sellers have obviously gravitated towards the $9.99 price for new releases, in the future if a consumer owns a reader that is tied into one store then there is no guarantee the price will be competitive. A lot of reader makers are embracing ePUB format for books, and that’s a good thing, but that’s only half the battle for new releases. These books will almost certainly be infested with a DRM scheme, and just because a given reader can handle the ePUB format it will still stick the owner with whatever DRM system it supports. That will likely tie a given reader to a particular store. And as you can see, prices may vary.

It’s almost looking like the smart money is on putting multiple readers on a given device, like an iPhone, so that content can be read from more than one source. Of course this makes keeping an online library much harder for the consumer.

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It may also help FathomDB, a Y Combinator startup that hosts its database-as-a-service offering on Amazon’s cloud, stay alive and compete against that company’s rival service. Signing up with Rackspace gives it a protector (and one that likes to buy innovative startups), and also adds some competition to the emerging database-in-the-cloud market. Microsoft has one coming on Azure as well.

Competition and big service providers that enterprise buyers can trust are essential. However, when it comes to putting a database in the cloud, while the ability to scale is a benefit, of equal importance in some cases will be the speed at which that database in the cloud can talk to the web servers requesting the data.

Image courtesy of Tim Morgan on Flickr.

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As of last count, a Google search returned more than 250 articles dealing with the T-Mobile outage while there were only 11 articles on Rackspace’s outage, even though it affected popular sites like TechCrunch, Daily Booth and Posterous. The higher visibility of the T-Mobile outage is likely a result of how consumer-oriented the service is. So the first lesson is, if you are a consumer-facing service, you need to have your PR people on the blog, Twitter, newspaper circuit offering statements and remedies quickly.

The second lesson can be found in how the events were handled. When it came to handling the outage, T-Mobile issued fairly regular updates but hasn’t yet provided any insight into what happened. In an age of transparency, this doesn’t go over well. Meanwhile, Rackspace has a very detailed status page that offers actual information on what went wrong and what it’s doing to fix it. Additionally, Rackspace offered actual people for its customers to call.

Other enterprise-focused services should take a lesson from Rackspace, especially when it comes to delivering cloud services. Take Google for instance; during a July App Engine platform outage, I got several emails from people who were frustrated that Google didn’t give them much information on the problem. One of those emails (I’m keeping the person’s name out of this as he is dependent on Google to host some of his information) noted: “I think the time is appropriate for a real critique of the offering, and force them to answer publicly about what they’re doing to fix whatever architectural flaw is knocking the service down every 2 or 3 weeks.”

Google’s stoplight metric (which offers only “no issues, investigating or service disruption”), paired with intermittent, vague blog posts, isn’t likely to cut it for long. If Google wants to play in the enterprise with its cloud platforms and services, it’s going to have to have people on hand to offer real customer service (something I’m not sure Google ever does — although, when Om complained about Gmail, a media relations person did get us someone on the phone) and provide better updates.

Last week, I chatted with Steven Cakebread, the former CFO of Saleforce.com, about service level agreements for demand computing and platforms as a service for the enterprise. In our conversation, he said that, until there’s more competition, Google and Amazon won’t have a huge incentive to explain outages in detail or get people on the job of explaining and holding customer’s hands during outages. So I suppose it’s a good thing IBM, Savvis, Rackspace, Terremark and others are all crowding into this space.

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The virtual part of this announcement is key. The Amazon offering isn’t a pledge to put all of your data on a physically separate system — it’s all secluded at the network level using the virtual private network. So the information in Amazon’s cloud will still be shared with other companies’ data on the actual servers. By doing this, Amazon is trying to preserve the benefits of sharing fully utilized servers in a true cloud that can scale, but still provide enterprise customers with a peace of mind that they can lock down some of that data, at least while it travels to the cloud. Amazon is trying to offer the economic benefits of cloud computing in a palatable format for businesses that are weighing whether or not they should try to build their own in-house cloud infrastructures. Amazon CTO Werner Vogels explains in his blog:

These CIOs know that what is sometimes dubbed “private cloud” does not meet their goal as it does not give them the benefits of the cloud: true elasticity and capex elimination. Virtualization and increased automation may give them some improvements in utilization, but they would still be holding the capital, and the operational cost would still be significantly higher.

With this announcement, Amazon is trying to get a jump on it competitors that are gunning for corporate customers. While many big businesses have used Amazon Web Services, most perceive it as being insufficiently secure for important or confidential data. Companies such as Microsoft, IBM and Rackspace are trying to find the right mix of scale and security for enterprise clients. Microsoft is building its own platform and infrastructure-as-a-service offering called Azure; IBM is creating several gradations of a private cloud from something deployed inside a corporation’s own data center to a service delivered from Big Blue’s data center; and Rackspace is hoping security-minded customers use its dedicated hosting that can scale up to the Rackspace cloud.

Michael Crandell, CEO of Rightscale, which provides cloud management software, tried to explain a bit more what Amazon is trying to do with the Virtual Private Cloud, which, by the way, costs an extra 5 cents an hour per VPN:

Something that initially puzzled me is what the benefits of a VPC are when all the marketing fluff dissipates. Here is what I’ve learned. First, instances in the VPC are separated from non-VPC instances at a deeper network level than instances in different security groups or belonging to different users. As is typical, Amazon doesn’t say anything of substance about the nature of this isolation. Let’s see how soon that will have to change to actually attract enterprises…Second, instances in the VPC can seamlessly integrate into a company’s internal network routing. This is significant because it means that tools used to inventory, secure, audit, manage and access all servers in the IT infrastructure can now be brought to bear on instances in the cloud as well.

The Amazon offering is different from IBM and Microsoft’s efforts in that it provides access to the raw infrastructure, rather than a service. Both Microsoft and IBM, especially Big Blue, are betting that enterprises will demand services, such as IBM’s workload specific offerings delivered from a cloud, or Microsoft’s SQL Azure, rather than access to the raw infrastructure. In the next few years, more enterprise computing jobs will shift to some of these companies, and by creating a Virtual Private Cloud offering, Amazon makes sure it stays relevant and can get a slice of the enterprise pie. The question will be whether or not businesses find Amazon’s Virtual Private Cloud private enough.

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Emil Sayegh, general manager of the Rackspace Cloud, says the company plans plants to add more features to its cloud products over the next few weeks, such as backing up information to Cloud Files (the Rackspace storage cloud) automatically, and Windows in the cloud. These are both features Amazon Web Services already has. Saygegh also says Rackspace plans to release its API to the open source community, which may speed the development of an open API for building programs on cloud platforms.

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The company today announced a free edition of Force.com so developers can build one app for up to 100 people, that uses up to 10 custom objects (custom database tables) per user and a web site that gets fewer than 250,000 page views per month. That last bit brings us to today’s second announcement: Force.com Sites.

The offering looks like an amped-up GeoCities for enterprises that allows corporate IT departments to build an internal or public-facing web site, while still tying it into permissions and data available to Force.com. There are three pricing levels, from free (which lets a site owner have up to 250,000 page views) to unlimited (which, despite the name, is limited to 1 million monthly page views.) Additional monthly page views are available for $1,000 per month for up to 1 million more monthly page views.

Given that each different platform as a service is built to optimize the host’s underlying hardware and architecture, several of them will likely proliferate in the spirit of co-opetition. Google, for example, emphasizes that App Engine is designed for apps that need to scale, while Salesforce.com emphasizes its familiarity with the enterprise and permissions around accessing data. Microsoft has said it plans to integrate Azure deeply into its suite of products, which will help developers customize their Microsoft apps. Expect to see more news about these efforts and more agreements to make sure data and permissions can be shared between them in the coming months.

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“The margins at the low level, at the Azure level, are going to be lower than the top level, where you’re delivering a solution or something like Exchange,” said Ozzie, referring to Microsoft’s popular e-mail and calendar application. “You’re pricing that solution around a business value more than cost so the margins are still very, very good.”

I wrote last month about how Microsoft can boost profits if it delivers higher-value services on top of its Azure cloud. The desire for higher margins is why IBM has said it’s less interested in providing the type of infrastructure as a service that Amazon or Rackspace do, but is eager to deliver services that run on top of the computing clouds. It’s also why vendors such as CSC and even Rackspace are trying to differentiate the bottom infrastructure-as-a-service layer of the cloud by touting security and “fanatical support,” respectively. Both are ways to charge a bit more and improve the bottom line. To understand the different layers of the cloud, check out our post Cloud Computing’s Three-Horse Race.

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