Take a look at the hard drive in your desktop PC. It might hold terabytes of data, but the basic 3.5-inch design can be traced back to the early days of computing -- not really relevant in an era when a lot of your content sits in the cloud, is it? Google wants to change that. It's hoping to work with both the tech industry and researchers to design hard drives that are tailor-made for cloud-based storage. It wants to optimize the "collection" of disks instead of focusing on individual drives, and is more concerned about capacity and performance -- the things that matter most in a bustling data center -- over sheer reliability.
You shouldn't expect any breakthroughs in the immediate future, since companies will take a while to implement Google's ideas. Google is well-aware of the practical realities, though -- while it's pushing for physical changes (such as taller, grouped-together drives), it's also suggesting near-term improvements like firmware updates. It might not be long before your internet services of choice run that much faster.