Quick Thoughts: Google I/O – Winning the Cloud

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–          Unlike last year’s Jelly Bean intro, Nexus 7 launch and Glass skydiving extravaganza, Google I/O 13 had no single OMG moment and introduced no major new product categories.

–          The 3 ½ hour key note reeled off more than 100 enhancements to core franchises – Search/Now, Maps, Google+, Chrome, Play, Wallet, and the Android developer kit all got major upgrades.

–          The All Access music service, the pure Android Galaxy S4, and new photo editing/sharing tools lead the headlines, but integrated functionality across apps and platforms is the big step forward.

–          Google’s mastery of the cloud is a powerful weapon as platform differentiation and monetization shifts from the device to the web-based services that will increasingly define the user experience.

Last year, Google closed the opening keynote of its I/O developers conference, with a team of extreme athletes skydiving onto the roof of the San Francisco Moscone convention center and performing a series of mountain bike half-pipe stunts, before rappelling down to street level and bursting into the auditorium, all broadcasted to the audience via the first Google Glass units ever seen in the wild. This “Dire Wolf and Unicorn Show” (dog and pony seems too pedestrian), launched a year of Google Glass mania in nerd world and nearly over shadowed the Android 4.0 Jelly Bean and Nexus 7 tablet launches that had come earlier in the program. A second keynote on day two of the conference more quietly launched Google’s Compute Engine cloud hosting program aimed squarely at Amazon Web Services. That was a lot of “all new” for a single conference.

Google I/O 13 took a very different tack. No new hardware was announced – the pure Android version of the Samsung Galaxy S4 is a nice bone to throw to the true believers, but it is still the same hardware as the standard skinned version and will likely sell in de minimus quantities. Instead, Google went systematically through its application portfolio and offered a panoply of thoughtful improvements to almost all of them. Moreover, Google also offered Android Studio – a completely revamped development suite for the operating system that earned rapturous applause from the thousands of developers in attendance. Android Studio will make it much easier to develop for the platform, adding powerful tools for writing and testing apps, easing the burden of supporting the multiple versions of the OS in the market, and facilitating pathways to broader monetization. Management bragged that Android app installs had surpassed 48 billion, up 2 ½ times from a year ago on a trajectory to surpass Apple and its 50 billion+ apps within the next few months. All of this goes to make Android a much more attractive market for independent developers, enticing them to write for Android first and iOS second, rather than the other way around.

The headline grabber of the session was Google’s new All Access streaming music service, offering unlimited access to tracks from all three major labels for a $9.99 monthly fee. All Access gets users up and running immediately, with millions of tracks and well-designed functions for organizing queues and playlists, and tools for discovering new music. The service fills a major hole in the Android experience – Google had little success in enticing iTunes users to upload their music files to Google’s Drive service or to build a download business within Google Play. Assuming they are willing to foot the monthly fee, Android users can bypass most of the pain of switching from Apple. Given the 900 million Android devices that have been activated to date, odds are that All Access will find a reasonable market.

All Access was not the only change to Google Play. The store had already received a recent revamp, making it easier to find and download popular or recommended apps and content. Today’s announcements included a new games API that will enable users to save game status synched across different devices, along supporting multiplayer play, with tools to make it easier for developers to include multiplayer functionality in their games.

Google Search will soon show statistics graphically, and try to anticipate subsequent questions and add that data to the graphs. It has added conversational search, whereby the service interprets questions in context without requiring specific keywords. Conversational search can be initiated by voice, with the activation phrase “OK Google”. Google Now has been updated with six new types of notification cards, including information about books, music, TV shows and video games that may be of interest given time and location.

Maps received a substantial upgrade. Location maps will no longer be populated with generic landmarks, but will be customized to the user and context. Places a user has recently searched for or visited will be identified. Directions offer significantly more detail, with options, including alternative driving routes, public transit, biking paths and/or pedestrian routes,  graphically noted and estimated transit times offered based on existing conditions. Public transit directions will also include times for the next train or bus departure. Google Earth is now integrated allowing one click to satellite images. Navigation functions will soon include real-time incident alerts and dynamic re-routing. Flight schedules have also been integrated into Maps, allowing more extensive trip planning. All of this comes in an interface that is cleaner, with less screen real-estate devoted to extraneous menus and functions.

Google+ has been completely redesigned, with 41 new features. The splashiest of these is a set of photo editing and sharing tools. For example Google+ will automatically improve the tonal balance, sharpen details, remove noise and soften skin textures in photos uploaded to it. The service will also analyze photo sets, culling out blurry and poorly exposed images and proposing best choices from duplicate photos. It can also recognize and identify people and landmarks. The service will connect series of photos into animated GIFs. Google has also increased the free storage available to its users to 15GB, with unlimited free auto-backup for photos of less than 2048px. The redesigned Google+ now streams in three columns, in contrast to the single column feeds offered by Facebook and Twitter. Items in the streams are presented as interactive “cards” similar to those employed by Google Now. New posts will automatically be given a hashtag, which will make it easier for your posts to be discovered and for you to find content similar to what you have posted.

Google+ also becomes the lynchpin for a new unified cross-platform messaging system. Users can send text, photo and video messages using the Google+ Hangout facility, integrated within Gmail as well and available on desktop, Android and iOS. The service is intended to allow users to maintain conversations as they move across platforms with friends who may be on dissimilar devices. To date, Hangout’s main calling card has been its ad hoc video conferencing ability, and Google added a number of bells and whistles to the flagship service as well. Gmail got a few minor tweeks, including the ability to use Google Wallet to send money via an email attachment and buttons that will show with message notifications, allowing actions without opening the message. The latter capability is open to developers, who could streamline e-commerce e-mail authentications or offer one-click renewals.

YouTube was on the back burner during the keynote, but Google did announce an expansion of its Live Access program to any channel with more than 1,000 subscribers. This broadly increases the access to the live streaming service and should drive a dramatic increase in the availability of live content on the site.

Taken as a whole, the enhancements presented at Google I/O extend the company’s lead in delivering a comprehensive cloud-based experience that bridges devices and venues. Most of the new functions offered lever Google’s extraordinary web-scale distributed data center, supporting device operating systems with seemingly limitless computing and storage muscle provided from the cloud. As wireless networks grow ever faster and more ubiquitous and as users demand consistent experiences across device categories, I believe these cloud-based services will become the primary point of competitive differentiation and the key monetization lever in the battle for the hearts and pocketbooks of consumers. In this, the war is shifting onto terrain where Google has no real peers.

For our full research notes, please visit our published research site.

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