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September 30, 2007

Google's Secret Sauce

While there are many start-ups called by the media "Google killers", becoming more popular than Google is increasingly difficult. Even if Google started with an algorithm for search, it built an infrastructure that prepared its later expansion and became more important than the initial innovation. From New York Times:
Consider the question of Google's greatest business secret. Is it the algorithms behind its search tools? Or is it the way it organizes vast clusters of computers around the globe to answer queries so quickly? Perhaps predictably, Google won't disclose the number of computers deployed in its vast information network (though outsiders speculate that the network has at least 450,000 computers).

I believe that the physical network is Google's "secret sauce," its premier competitive advantage. While a brilliant lone wolf can conceive of a dazzling algorithm, only a superwealthy and well-managed organization can run what is arguably the most valuable computer network on the planet. Without the computer network, Google is nothing.

Eric E. Schmidt, Google's chief executive, appears to agree. Last year he declared, "We believe we get tremendous competitive advantage by essentially building our own infrastructures."

Process innovations like Google's computer network are often invisible to the public, and impossible to duplicate by rivals. Yet successful companies realize that maintaining competitive advantage depends heavily on sustaining process innovations. Great process innovators often support basic research in relevant fields, maintain complete control over the creation of every aspect of a product and refuse to rely on outside suppliers for important components.

Google built a file system "for large distributed data-intensive applications", a programming model and a distributed storage system called BigTable that works on top of Google's file system. Hadoop, an open source project supported by Yahoo, wants to replicate Google's distributed systems.

{ Image from Eric Schmidt's presentation at the Stanford Graduate School of Business in April 2004. }

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