Light Reading did a nice piece on Google and their new hire to head the telecom, media, and entertainment piece of Google Cloud. John Honeycutt came from the TV side, the Discovery Channel specifically, and so he’s much more a content guy than a cloud service guy. Specifically, he was in charge of IT, media technology, production and operations. There are a lot of ways you could spin his background in regards to Google Cloud, so let’s spin a bit and see what makes sense.
Variety offers a bit of detail into the story, so let’s start there. “Honeycutt will lead development and implementation of Google Cloud’s worldwide strategy, using his pay-TV background to focus on helping migrate traditional video distribution workflows from film studios, content creators and distributors to the cloud. In addition, Honeycutt will work closely with telcos, cable and satellite TV providers and will focus on driving cloud adoption by gaming and e-sports companies.” This statement, I think, offers us a good jumping-off point for discussion, since Google doesn’t provide its own statement on his role.
Migrating video distribution workflows covers a lot of ground, but the “focus on driving cloud adoption by gaming and e-sports companies” seems a bit easier to parse. Put another way, they believe that the Internet is going to be an expanding delivery vehicle for entertainment, and they want Google Cloud to be there to host the content distribution side. In my view, that also means that they want Google Cloud to play in some way in streaming TV and content delivery, since that’s the current market opportunity and it would make little sense to ignore it.
Google, of course, is already a provider of streaming video services (YouTube) including live TV (YouTube TV). They could easily be looking at themselves as the vehicle for delivering e-sports and gaming, meaning looking at enhancing their own offerings in that area and attracting content provider business. That would make sense of Honeycutt’s background; who better to pitch Google delivery to channels like Discovery?
They could also be looking at becoming a provider of the tools to allow content companies to self-distribute. CBS (“All Access”) already streams its own content for pay. Amazon has some Channels deals with content owners. Other content providers are surely looking at the squeeze in profits in the entertainment food chain and wondering if they could make more by cutting out the middleman and going their own distribution route. Obviously few would want to build out the infrastructure, so hosting it would be the logical choice.
Finally, Google might see all the cable companies and telcos getting into streaming, and thus needing a mechanism to deliver content that way. AT&T has already committed to DirecTV Now, but it’s lost a significant market share recently on what most say are service quality problems likely arising from infrastructure insufficiency. Verizon has been offering YouTube TV along with some of its 5G home broadband already. Could Google become a provider either of content distribution on a resale basis, or as the host of a kind of MVNO-like content relationship with the telcos and cablecos?
At one level the good news for Google is that a lot of the technology needed to fulfill any or all of these three missions would be very similar. Google has been fairly open about the software it’s invented for the cloud (Kubernetes came from Google, for example), so if they follow the same pattern they wouldn’t risk much by offering a toolkit from which anyone, including themselves, could assemble and deliver entertainment.
At another level, Google may realize that if any of these three apples fall, they all will. The forces acting on the online entertainment market jostle everyone in it. For example, suppose that network operators and even some cable companies start to deploy 5G/FTTN millimeter-wave solutions for home broadband. Those companies will immediately need a streaming TV strategy, which might induce them to either resell Google or assemble their own. In either case, the new competition would compress margins and make content owners think about building their own distribution model.
Finally, Google may be making the savviest (and perhaps most risky) bet of all, which is that carrier cloud is likely to follow the implementation path of carrier video and advertising. Video-related stuff is the overwhelming majority of early driver stimulus for carrier cloud data center growth. If Google could snare telcos’ video and advertising delivery in some way, they would own the largest driver of new data center deployments at least to 2024 when my model says that other forces catch up.
Think about that one. My model has said, since 2013, that carrier cloud would be the largest incremental source of new data centers, and the largest single source of data centers overall. Imagine if you’re Google and you can get that business. Forget Amazon and Microsoft; their clouds would be pygmies in comparison. The model says that by 2030, carrier cloud could drive one hundred thousand incremental data center deployments, the great majority at the edge.
It’s not conclusive, but the fact that Honeycutt is in the Google Cloud area suggests that something other than a retail or even pure resale model is on Google’s mind. Were Google to offer its own services, it would be less attractive as a partner to others because partners would be directly competing with Google. I’m therefore tempted to bet on the notion that Google is looking to host third-party entertainment distribution in the Google cloud, in which case they may not be looking to expand their current YouTube stuff as much.
Google has most of the technology it needs to deploy streaming entertainment for partners, it just has to organize it into part of Google Cloud. While they’re at it, they could consider the fact that the personalization and contextual services driver and the IoT driver that will catch up with video/advertising in 2024 would benefit from many of the same features. Contextualization is a superset of personalization, clearly important for video/advertising, and contextualization is also a big part of IoT.
5G is a key point here too, not only because the telco/cableco space is pretty interested in it, but because a 5G/FTTN boom would accelerate the need for new content/experience delivery relationships. For carrier cloud, 5G and mobile-related technology is a secondary driver, never more than in third place prior to 2024 and slipping slowly after that. But it’s associated with a new-service build, and if operators get really serious about any flavor of 5G, the steady 15-18% contribution it could make to carrier cloud deployment could add up to something important.
Would a telco or cable company outsource “carrier cloud”? I think most would say they would not, but when I chat with high-level internal planners, they’re not so sure. The problem they cite with rolling their own carrier cloud is the incredible inertia associated with getting into something they have no experience with and no skill set with. Could they hire people? I harken back to my early career, when I worked with an eager systems manager who had good management skill but zero knowledge of technology. He ran up to me excited one day and said “Tom! I just hired a great software engineer!” My question to him was “How did you recognize him?”
Then there’s NFV and the operator standards stuff. The chance that Google would build carrier cloud, or even build the services that the six credible carrier cloud drivers require, based on ETSI NFV or ZTA is in my view zero. If operators don’t build carrier cloud, but instead outsource the service features those drivers mandate, you can bet that the whole of the ETSI initiatives relating to transformation are out the window.
A final key point here is that Honeycutt is taking over an activity that could well decide the future of Google Cloud, and he’s neither a cloud guy nor a Google guy. That’s not a bad thing given that Google lags its competitors in the cloud and has little realistic chance of catching up by going head-to-head with them in the market segments they’ve already staked out. However, getting the carrier cloud positioning just right is absolutely critical, and getting the technology right is at least as critical. That’s going to take more than Honeycutt, I suspect. Kurian, who heads Google Cloud, came from Oracle’s cloud business and probably has a good technical grasp of the cloud, but not necessarily the carrier cloud (even carriers may not have that!) Maybe Kurian and Honeycutt in tandem can work some magic.