What does Google make money with?

What are the reasons to believe that Google can make substantially more money from their PaaS and IaaS business than they can from their SaaS business?

• At the fireside chat at Google Cloud Platform Live 2014, Urs Hoelze said that their cloud business can easily be bigger than their advertising business [1]. What is the evidence to suggest this? Amazon Web Services is estimated to have pulled in about $3.8B in revenue (not profit) in 2013 [2]. Microsoft Office on the other hand pulled in about $24B profit in 2013 [3]. While Office is not SaaS, it is a comparable business, and a large one at that. Is there any reason to believe that Google's SaaS business won't keep up? [1] Start at 2:15: [2] http://www.zdnet.com/amazons-aws-3-8-billion-revenue-in-2013-says-analyst-7000009461/ [3] http://www.tannerhelland.com/4993/microsoft-money-updated-2013/

• Answer:

  The Enterprise computing market is actually quite large, making up the bulk of revenue for companies like IBM, SAP, Oracle, EMC, and about a dozen other Fortune 500 companies.  The total market is somewhere around a trillion dollars a year or more. "Amazon Web Services is estimated to have pulled in about $3.8B in revenue (not profit) in 2013"  The cloud computing platform is only one possible product. Google is sitting on a wealth of internal technologies which could potentially be sold as Enterprise SaaS products. Another consideration is their existing revenue streams are already mature.  Once you have full market penetration globally with your existing product line, it's not easy to keep organically growing your revenues. Assuming Google can break into the Enterprise market, it represents  significant new unexploited revenue streams for the company. DISCLAIMER: I am a former Google engineer, so I don't have any inside information about Google decision making.