Yes, but even internally, separation between departments in a company is extremely important.

Google cannot have a breach between the services running gmail and the services running adwords for example, even if those are running in the same server on an internal cloud that has strict permissions being enforced by software.

This is especially even more relevant in any kind of datacenter application, even if the company is the sole tenant, because they are working with Client Data - which is data that does not belong to Google, but to their customers.

"Google's Borg system is a cluster manager that runs hundreds of thousands of jobs, from many thousands of different applications, across a number of clusters each with up to tens of thousands of machines. It achieves high utilization by combining admission control, efficient task-packing, over-commitment, and machine sharing with process-level performance isolation" [0].

All of their processes run together on the same machines so you wouldn't want to risk one compromised process access data on possibly any other process.

[0]: https://ai.google/research/pubs/pub43438