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A close call: Why Trade Me chose Google's cloud over AWS

A close call: Why Trade Me chose Google's cloud over AWS

Going direct, Trade Me enjoyed the support of Google professional services.

Paolo Ragone (Trade Me)

Paolo Ragone (Trade Me)

Credit: Supplied

When New Zealand's home-grown marketplace website Trade Me decided to embrace the cloud, it faced a tough platform choice between Amazon Web Services (AWS) and Google.

In the end, it was a selection based on the feels as well as the facts.

The site's biggest makeover in 22 years aimed to make Trade Me more helpful, smart, and simple.

“We’re always trying to help Kiwis find what they’re searching for faster than before and our new-look site will do just that," said chief technology officer Paolo Ragone. 

The time had come to create a faster and more modern web experience, Ragone said, and that required the site to be rebuilt from scratch.

But first the team had to select a cloud partner.

Ragone told Reseller News from a capability perspective there wasn't a lot of difference between the top three at the time the decision was made. There was even less between the two that went on to be evaluated: AWS and Google.

"They are two giants," Ragone said. "You can hardly make a wrong choice from a technical perspective."

The Trade Me team undertook a very structured, competitive tendering approach evaluating the two platforms side by side, he said.

"It was the team that came up with the solution. It wasn't anything imposed or anything like that."

The team put its recommendation to the board and that recommendation was accepted.

One differentiator for Trade Me was the support Google promised during the migration.

"We worked very closely with Google professional services in that process," Ragone said. "It was actually tremendously useful to have people who had direct access to the product owners in the US."

Cultural fit, which is hard to define, was also an element, he said.

"The team felt very comfortable with what they were seeing from Google, a bit more than what they were seeing with competitors."

On a technical level, things were pretty standard, but Google did present a strong offering of Kubernetes, used for automating application deployment, scaling, and management.

That should not surprise because Google developed the container orchestration system before releasing it to open source in 2014.

"I don't think there is anything that was a clear differentiator," Ragone said. 

"It was really more about, during that selection process, how they came to the table and how the team felt we were going to successfully achieve the goal together."

Ragone said subsequent experience had justified the decision.

Google, which did the deal directly with Trade Me rather than through partners, worked closely and collaboratively with the  Trade Me team during the COVID-19 pandemic to make sure that didn't impact on the cloud migration.

As reported in late June, while Google is a top four cloud provider globally, in infrastructure-as-a-service (IaaS) at least, it still has to break into the top four in New Zealand, according to analysis from Gartner.

Like AWS NZ, Google NZ reports local revenue numbers. These do not give an accurate impression of the scale of Google's total cloud or other business lines in New Zealand, however, because the local subsidiary reports reseller revenue, an unknown margin on its parent's services.

The trajectory appears positive, however, with Google reporting cloud reseller revenue of $5.5 million for the year to 31 December 2020, up from $4.4 million in 2019.

That was out of total New Zealand revenue of $43.8 million, up from $36.2 million in 2019 with the bulk of reselling advertising.

Employee expenses increased from $12.3 million to $15.6 million year on year.

Given further details of the reseller arrangement are not available, it is possible another number in Google NZ's accounts provides a better metric for the scale of the broader company's activities in New Zealand: $517.1 million paid to a related party in service fees during the 2020 year.

Trade Me's data is now served from Sydney, Ragone said. That was "inevitable" with all the players in Sydney at that point in time and also to meet the site's latency requirements.

"I must say it's been one of the smoothest migrations I've been involved in and I've been in three big ones of this scale," he said.

"The team really, really did well in all the preparation and making sure the performance testing was done in advance."

That included partial rollouts and small percentage rollouts to make sure any issues were ironed out.

Ragone said in the end it "almost felt anticlimactic", a bit like the America's Cup which was finishing up during the same week.

The changes delivered a more consistent journey for the 670,000 Kiwis who visit the site every day, because Trade Me will now look, feel and work the same on all devices.

While some Kiwis are already experiencing the new-look Trade Me on their mobile devices, all members will be switched over by July.


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