The problem is really technical. Because of the open codebase and "edit anything" culture, basically every piece of infrastructure at Google, unless it was designed at the start for open-sourcing, has dependencies on every other piece of infrastructure. Untangling them takes far more time than you could 20% on. That's why you don't see more open-source platforms from Google.
When I was learning to program, I was very interested in 3 Google's core products API: Search, Adsense and Adwords but got turned off because their APIs are very crippled. I understand that Google do not want to expose their core products (cash cows) to abuse, however that's exactly what Steve argued in parent's quote. If the closeness (nothing to do with code) is already in Google's mindset, how do they become a "platform oriented company"? Steve says that it will take a dramatic cultural change to catch up. Steve also chooses Amazon's example to prove: when the years of explosive growth were over, Jeff Bezos had to think of some new expansion strategies. He was betting on the cloud, whatever that means, or on being a platform, and he implemented his vision with an iron fist, because paradigm shift is hard, you have to consistently push people into doing it.
The path requires far more finese than "always create a platform". You need to balance over-engineering with the ability to re-evaluate previous decisions.
I agree Google has wandered far off this path, but imnot sure they are on any more well defined path than Yahoo. They just happen to be earlier.
Sometimes you don't know if a product is worth being an entire platform until it's been thoroughly field tested. It's too expensive to assume that everything is.
Perhaps in Google's case there could have been more foresight, though.
Yet, every product developed at Google seems to be developed with absolute scalability in mind from the get-go, wasting lots of effort invested into scalability in the case of the product failing to get significant customer adoption.
Since 100% of successful Google products will be large, it makes sense to design for scale from the get-go. But if some of Google's products won't end up being platforms, it might make more sense to bolt that on later.
But if I had to summarize the main point, I would choose: "The Golden Rule of Platforms, "Eat Your Own Dogfood", can be rephrased as "Start with a Platform, and Then Use it for Everything." You can't just bolt it on later." Start with the platform. This is so obvious, yet a lot of middle and higher managers ignore this either because (i) they are totally ignorant (see Peter's Principle), sadly the case that I usually face, (ii) they pragmatically ignore it, because they are doing greedy optimization for the next 6mos-year and developing the platform is just a "waste of time", or (iii) they ignore developing and making available the platforms they already have because they think it's their "competitive advantage".
The way I read his post, Google's case seems to be (iii). They have great internal tools and platforms for many years now, why they wouldn't develop good APIs around these and make them available is a mystery to me. Wouldn't they have eaten AWS for lunch if they platform-atized their Map-Reduce tools, say around 2004?