Introduction

Google has announced that they are selling the Domains business to Squarespace. This surprised many tech watchers for two primary reasons:

• A domain registry aligns with Google’s purported internet infrastructure mission
• Managing a domain registry is seemingly not costly

Why?

An online conversation quickly developed about the announced sale, with some speculation that this represents internal-to-Google acknowledgement of risk to their core search & advertising business.

The argument continues that because those cash cow businesses are at risk, then everything that isn’t directly related to either is getting sold or shut down. For context, Google has also announced the shuttering of Album Archive, which apparently is where images from other shuttered Google services landed, on July 19, 2023. That’s thirty days from now.

Closing Album Archive might be a reasonable business decision, absent other factors. The decision to sell the Domains business to Squarespace makes no sense. Why Squarespace?

Squarespace

I don’t have an opinion of Squarespace - good, bad or otherwise. I’ve not heard anything about them beyond that their customer service may be a bit weak.

That’s hardly an indictment of a company providing website creation services to non-technical customers. It’s inherently more difficult to provide technical support to non-technical people. It’s understandable.

That said, it’s bewildering why Google is selling the domains business to Squarespace. Perhaps Squarespace wants to offer domain name registry services to new customers as they create their online identities using Squarespace’s web builder tools. I can see that.

What I cannot see is how suddenly managing over 10 million domains - the number claimed to be in Google’s registry business - is a good match for Squarespace for a glaringly obvious reason:

These are existing domain names.

These are not new registrations. Squarespace will now be the regsistrar for some large corporate domains that previously wouldn’t have had any reason to do business with Squarespace.

A hard sell

Squarespace now has a problem on its hands. There will be businesses that immediately transfer their domains out of Google Domains before this transaction even closes. Is the sale valued on the number of domains under management? That will go down.

This is also a huge problem for Google.

Reasoning for this sale is not apparent. Smart people are scratching their heads and looking at the only observable data point that exists: Google’s reputation for shutting down popular services.

Workspace

That’s causing a whole lot of speculative talk about the future of Google Workspace - the current incarnation of Google Suite, which itself was a renaming of Google for Domains, if I recall the history correctly. It doesn’t matter. A quick search (hey) reveals that Workspace has ~6 million customers comprised of 90% of the Fortune 500 companies globally.

Workspace is a paid dashboard that provides access to multiple Google services as well as user management of those services, the most important of those being Gmail. That’s enterprise email inside Workspace.

Somewhere in the Google - Squarespace agreement is this red flag: Squarespace will now provide support to (some?) Workspace accounts for the next three years.

Um, what? How is that related to a sale of the domains business? If that’s accurate, it’s possibly the most baffling part of this.

Is Squarespace also getting Google employees in this transaction? Squarespace has no discernable experience supporting businesses like these.

Google Cloud Platform

Google Cloud Platform, or GCP, is Google’s public cloud services business. They compete with Amazon Web Services, Microsoft Azure and numerous small providers for the lucrative enterprise cloud computing customer base.

GCP’s market share is approximately 9.5% with little upward or downward change over the past several quarters. Go take a look at that & then come back.

If - when? - Google decides to exit this cloud provider business, it will be devastating to customers who have gone all-in on GCP. Building & deploying to a cloud vendor is highly specific - architectures designed for AWS will not run as-is on GCP and vice-versa. Forget refactoring. We’re talking about enterprise customers rewriting large parts of their own applications currently deployed to and running on GCP.

That’s hugely costly but may be less so if done proactively rather than reactively within whatever time frame Google chooses to provide if (when) the closure is announced.

Which brings me to the buried lede here:

I don’t see any way for GCP to be sold to anyone. It runs on Google’s network infrastructure and almost certainly leverages it in ways that Google would not allow an acquirer to do. It’s a doomsday scenario, really. If Google decides to exit the cloud business, GCP gets shut down.

There is no white knight acquirer.

Enterprise Risk Management

To say that this episode will get a CIO’s or CTO’s attention is an understatement. There will be many conversations this week about how to manage the exoganeous risk that Google represents.

Any company that has their entire public-facing service offerings on GCP is going to be faced with a lot of uncomfortable questions about that risk.

“How quickly can we move off GCP?"

“What happens if our customers decide that depending on us is too risky because of our GCP usage?"

“Are we locked into any long-term Google contracts?"

An effective risk management approach is to assume the bad thing has already occured, determine what your response would be in that situation, and then implement that response now.

The risk of GCP shutting down will cause some enterprises to respond as though it already has, moving off the provider & actively reducing that already minimal market share. That in turn signals other enterprises to not even consider moving to GCP, futher constraining the available market for Google’s cloud services.

This will happen slowly then all at once.

What now?

I’m a paying Workspace customer.

I had no real choice because I use domain forwarding, i.e. if an email is sent to my freepository address (one I’ve used professionally for 24 years), it gets forwarded to my gmail address. That’s simple enough, but I have a few identities, like support, and a couple other domains I use in business, that forward through this Workspace account.

If Workspace gets shutdown, all of that quits working. This isn’t hyperbolic - Workspace is where these forwarding rules & additional domains are defined & implemented.

The rational response is to migrate off Workspace, which includes Gmail, and GCP.

I don’t use GCP so that’s a no-op. I have already started the Workspace migration process by downloading all my gmail messages.

This is not a project I expected to have this week, but here we are.

Summary

These are first order impacts.

What happens when potential employees begin avoiding jobs at enterprises that use GCP? Do they want to work on a platform that today has less than 10% market share, wasting time gaining experience that is almost certainly not transferrable to other enterprises?

That 9.5% market share coupled with Google’s history of shuttering products creates a reverse flywheel that is throwing off future growth, future revenue & future employees across the entire ecosystem.

Just how fast that flywheel is spinning isn’t yet known.