It's the Desktop assault.
Funny: The Register is the first IT publication that understood what Google plans are.
They are opening in several places in Europe as well and they choose carefully the locations and complacent local politics. The pattern is always the same: an area where there is a backbone, skilled personnel (but higher than standard unemployment rate) and a certain willingness not to consider implications.
Why do they need to de-centralize? My educated guess (for what regards Europe) is that they need to give services with a certain compliance to EU laws. I guess many companies would not move their desktops (and services) to a provider acting under a different legislation. A second factor is marketing and visibility: they need to be present and visible not stay virtual.
They will always employ a limited number of highly motivated and skilled people but they will consistently damage the IT eco-system as we know it.
I do see parallels between IT and retail stores. See Google (and soon MS, and perhaps HP or Oracle) as Wal*Mart of the situation: how many local IT consultancies or professionals would see a drop in their revenue if companies switch to Google services?
And don't tell me it's different or that I am comparing Apples with Bananas: at the end IT will become a commodity and customers will be able to judge by price and after market service.
But it's the way IT seems to evolve and it will generate a clear discriminant between mass-marketed and niche-market quality-driven services.
We all eat our own dog food..