Shopify is moving its infrastructure to Google Cloud. The Alphabet Inc. unit’s cloud service will host the e-commerce company’s online stores. It’s the latest win for Diana Greene, Google’s cloud chief, and the latest loss for Amazon. A series of large retailers have recently selected Google or Microsoft over Amazon, including Home Depot and Williams-Sonoma Inc.
At a February conference for online retailers, David Weissman, the founder of Beauty by Design, a skin-care startup, encouraged fellow retailers to ditch Amazon Web Services as a host for their online stores as the division’s profits help support Amazon’s overall e-commerce business, a direct competitor to most online retailers.
In the case of Shopify, the Ottawa-based company will still use Amazon for parts of its cloud infrastructure, but the majority of it will now be handled by Google. Shopify is an interesting case as its mission is to provide websites and tools to assist smaller merchants in selling online so they can compete with big e-retailers like Amazon. It serves over 600,000 businesses, thus deals with huge amounts of data and traffic. Shopify has grown rapidly since its IPO in 2015, seeing its stock grow in value by over 700%. It is currently valued at around $15B.
In its announcement about the new collaboration with Google, Dale Neufeld, VP of Production Engineering, explained some of its reasoning behind the move. Neufeld pointed out that Shopify “has been a cloud company since day one”. The company launched in 2006 (the same year as AWS) and early on, they leveraged the public cloud as a small part of their commerce cloud. They found that it worked for hosting various smaller services they offered, but didn’t work as well for their main Rails monolith.
Over the years, Shopify evolved its infrastructure and moved more of its supporting services to the Cloud. Its latest push to the Cloud started over two years ago. Google launched Google Kubernetes Engine (GKE) as Shopify was finishing production-hardening Docker. Docker was a large-scale containerization program to allow Shopify’s data centers to run more easily and be more adaptable by placing applications into self-contained, ready-to-run units. Kubernetes, an open-source container management system, was a natural fit for Shopify.
Transitioning most of its infrastructure to Google means that the e-commerce platform can rely less on its own data centers and spend more time developing its platform that makes it easier for merchants to sell online.
“Google has the strength to help Shopify scale our infrastructure globally and we can spend our time on the commerce stuff,” Jean-Michel Lemieux, SVP of Engineering, told The Financial Post in a recent joint interview with Diana Greene, Google Cloud CEO.
Greene, meanwhile, said the shift to the cloud at Google and in the industry more widely, has enabled “a bit of a revolution”.
“It’s changing what we can do in the world. We can get way more insight into solving our problems,” Greene said. The cloud can scale up to allow “completely elastic” computing and storage resources, resulting in “endless” resources to do data analytics and machine learning, she said. “Consumer products got way ahead of the enterprise,” she added. “Because of the cloud, enterprise can finally move fast.”
Lemieux cited Google’s intensive research into security and its commitment to open-source infrastructure as two key reasons for Shopify entrusting it with providing its infrastructure. “We fundamentally respect customer data. Everyone you hire has to have that in their DNA,” he said.