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The Deipnosophist

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A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

21 December 2005

Does Google Want to Rule the World? (Part 2)

What follows is the complete text of part 2 of Doug Casey's research comments re Google/GOOG. (Part 1 can be read here.) It turns out these comments are freely available to the public, so I will post the commentary in its entirety. Too, the two commentaries are a rehashing of Robert Cringely's comments, previously shared. (See below, however, for a second, newer item re Google/GOOG.)

Does Google Want to Rule the World? (Part 2)

The invention of the personal computer marked the first revolution in the way business is conducted. The advent of the Internet was the second. Google’s expansion is the third.

It is by no means the end of the story, though. Ultimately, the original Google search engine, the Gmail, the Appliances, the virtual office—all of these may amount to the least of the company’s accomplishments.

So, what does this brave new future envisioned by the young Turks at Google actually look like?

We’re going to take a stab at parsing out the Google plan, with the assistance of Robert X. Cringely who understands such matters and writes about them for PBS.

Let’s start with a basic consideration: No matter how complex and far-reaching cyberspace becomes, it must ultimately rest on something physical. For purposes of our discussion, that something has two components. First, data must be moved, utilizing wires, cables, fiber optic networks, routers, wireless transmitters, and so on. Second, data must be stored, using storage devices.

We’ll take storage first, because the story is short and uncomplicated. Google’s current and potential storage needs may be huge, but the industry has done an admirable job so far of meeting those needs. You’re probably used to thinking of storage in terms of gigabytes (giga = billion). That new 60-giga hard drive in your PC may store a lifetime’s worth of information for you. But it’s not enough for a business. The next step up is terabytes (tera = trillion).

That threshold was passed long ago. The present generation stores petabytes (peta = quadrillion). That level of storage handles everything we want to do at the moment but, as we all know, need tends to expand exponentially, so the next generation is on the drawing board. It will be calibrated in exabytes (exa = quintillion).

For now, petabyte storage will suffice for Google’s purposes, leaving them with the other aspect of the problem, moving data around. To grasp the solution, we first must make a quick side trip into how the Internet works.

Let’s say you want to communicate with a pal on the other side of the country. You send a message to your Internet Service Provider (ISP), which serves X number of users, but not the one you’re sending to. So they have to route it to a larger hub, which may bounce it to another hub and so on, until it reaches the ISP that directly serves your intended recipient.

Similarly, if you want to access a web page, you have to patch into the server on which that page is stored. The overall efficiency of the system depends upon a number of variables, including the distance to be covered, the number of intervening stations, and the quality of the connections among the various routers. There’s also sunspot activity (the excuse my ISP sometimes uses to explain bad service) and, for all we know, the number of alien spacecraft in the vicinity. Among other reasons, including page design, that’s why some pages load in the blink of an eye, while others seem to take forever.

Junctures where different networks intersect are called “peering points.” But the term is also applied to the backbone of the Internet, the 300 or so sites worldwide that constitute the primary routing hubs. That’s how we’ll use it, because these are the ones Google may be looking at.

We use the word “may” advisedly. A lot of what follows is conjecture, but it’s based upon logic and common sense, an examination of current trends, and the research of the aforementioned Mr. Cringely. All quotes that follow are his, unless otherwise noted.

According to Cringely, Google is developing a data center in a box. (Though Google will not confirm this, they don’t deny it, either.) A big, 40-foot box. “We’re talking about 5000 Opteron processors, and 3.5 petabytes of disk storage [crammed into a box] that can be dropped off overnight by a tractor-trailer rig.”

Cringely’s sources tell him that Google had one such data center two years ago, that today they have 64, and that within two more years they’ll have over 300. Not coincidentally, that will allow them to place one at each global Internet peering point.

Now add in this recent job posting from Google, which is seeking someone experienced in the “identification, selection, and negotiation of dark fiber contracts both in metropolitan areas and over long distances as part of development of a global backbone network.” “Dark fiber” refers to fiber-optic cable that's already been laid, but is not yet in use. Thousands of miles of it are available in the U.S., but there have been few takers because of the high costs of making it operational.

Google has deep pockets. It is building monster data centers and branching into fiber. A good fiber connection can patch right into a nearby peering point. Connect the dots and Cringely says this is what you get: “The idea is to plant one of these puppies [data centers] anywhere Google owns access to fiber, basically turning the entire Internet into a giant processing and storage grid.”

Or, to put it another way, “There will be the Internet, and then there will be the Google Internet, superimposed on top. We’ll use it without even knowing. The Google Internet will be faster, safer [i.e., fully encrypted], and cheaper. . . a new kind of marketplace for data, with everything a transaction in the most literal sense, as Google takes over the role of trusted third-party info-escrow agent for all the world business. That’s the goal.”

Whew.

But it doesn’t stop there, either. Since all human communication (save in-person voice) is now digital, and since digital data looks the same regardless of content, there is no reason for Google not to extend its reach into other arenas.

For that, we need another box, only this one is very small. It doesn’t exist yet, thus there is no name for it. So we’ll follow Cringely’s lead and dub it the Google Cube. The Google Cube plugs into your Internet connection and is studded with every conceivable I/O port: USB, RJ-45 (cable), RJ-11 (phone), video, audio, and so on. Some probably haven’t been invented yet. Inside it are chips for WiFi, Bluetooth and whatever else doesn’t, or won’t, require a physical port. A VoIP adapter will allow you to use the Net for phone calls. The Cube becomes the focus point for every computer, TV, telephone, fax and stereo system in your home, as well as home automation, climate control, and alarm systems. And you don’t even need a PC to run it.

For the whole thing to work, Cringely says, “especially with end-to-end elliptical encryption, you need a tight connection between the box client and a server, which is why those shipping containers need to be so broadly distributed and why Google will need so many of them, eventually numbering in the thousands to support hundreds of millions of cubes.”

To visualize the final result, Cringely asks us to “imagine a world where Google Cubes were distributed as widely as AOL CDs. It will be in Google’s interest to provide them in volume to every Google user, which is to say every broadband user everywhere. As a result, Google becomes overnight a major phone company, a major video entertainment provider, a major player in home automation and even medical telemetry.”

For a start-up cost that Cringely estimates at $3 billion or so, Google will provide support, sort, storage and delivery services to every aspect of business, entertainment and communications. Globally. Now, if that isn’t ruling the world, it’s the next-best thing.

And we may even like the result. As Cringely says, Google won’t take over the Net by stealing it or strong-arming us. “They’ll seduce us into giving it to them. And I am not at all sure that’s a bad thing.”
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Google Groans Under Data Strain


Google is consuming storage and computing power at a worrying rate, according to David Girouard, general manager at the firm’s enterprise division.

During his keynote at the Interop show here this week, Girouard explained that the firm blows through "an incredible amount" of computing power, disk space, and bandwidth. The exec noted that the firm has “concerns about the future in all these respects.”

“If you look at what we’re doing with Google Earth,” he explained, “it doesn’t take a stretch of the imagination to say that there’s a tremendous amount of processing power, bandwidth, and storage going on at Google in everything that we do.” Google Earth, part Web-based geography app, part 3D-rendering machine, whirls users around the globe with frightening speed and clarity.

Continue reading here...

Nothing new here either for regular readers of the Deipnosophist. It surprises me, however, that this article fails to catch the real problem and bottleneck, a potential lack of power (i.e., sufficient electricity). Which, too, has been previously mooted among us.

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