Google is much more capital-intensive than our competitors and we're much further along in the buildout of data centers. We have a competitive advantage because we have the cheapest and most scalable architecture. We hope that in the course of innovation, we will be able to build products that are almost impossible for our competitors to duplicate, simply because we've learned how to implement them at scale. The Internet is a scale business, and running large Internet scale businesses is very, very difficult. Virtually all of our capital expenditures go into the data center.
Schmidt also noted that the available inventory of surplus data centers from the dot-com boom is "long gone." That may be old news to some readers, but some technology real estate professionals say they still have trouble convincing clients (particularly C-level executives at client companies) that there aren't any more fully-built raised floor data centers out there that everyone else has missed.