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Whose cloud is it anyway? Apple sinks $30m a month into rival Amazon's AWS – report

iPhone maker set to feed competitor even more dollars over the next five years


Apple has been identified as one of the largest customers of Amazon Web Services, splashing tens of millions of dollars each month on public cloud infrastructure supplied by its rival.

Amazon competes with Apple in the mobile device market with its Kindle Fire tablets, and in voice-activated personal assistants with Alexa. Both companies offer music streaming services, and this autumn Apple will launch a competitor to Amazon Prime Video called Apple TV+.

Despite all this, Apple currently spends more than $30m a month with AWS, people familiar with the matter told CNBC – more than any other publicly announced customer. And the amount of investment is increasing, with the company reportedly spending a projected $360m total in 2019 compared to $350m over 2018.

The same sources said that several months ago, Apple signed an agreement that includes a commitment to spend at least $1.5bn with AWS over the course of five years.

Back in February, Apple posted a job advert to recruit a senior DevOps engineer for its Cupertino HQ that could help the company architect its "growing AWS footprint".

Apple previously admitted it used AWS infrastructure for iCloud storage, but has never revealed the extent of its partnership with the world's largest cloud provider. In 2018, Apple confirmed it also stored some data with Google Cloud.

It's possible that public cloud from AWS is being used as a stop gap, ahead of Apple building out its own infrastructure. At the beginning of 2018, the company said it would spend $10bn on data centres in the US over the next five years, including a new $1bn campus in Texas. And in December, it revealed that $4.5bn of the total would be spent by the end of 2019.

Given the downturn in hardware sales for Apple, it is putting more emphasis on services - delivered via its bit barns. The company has stopped disclosing unit sales for iPhones and other hardware and started providing a more detailed breakdown of its services business.

But extricating yourself from a particular cloud provider over competing business interests is not unheard of: Walmart recently switched from AWS to Azure, admitting that the deal was fuelled by its animosity towards Amazon. US retailer Target was another business to move to Azure as reported surfaced just days after Amazon acquired Whole Foods and moved into the physical retail space.

Apple simultaneously competes against three of the world's largest cloud providers: Microsoft is an old nemesis, and no doubt some of its executives still feel the pain of the "I'm a PC" days; Apple's beef With Google is more recent – it will never be forgiven for creating Android, which might or might not have been inspired by prototype Apple products that were seen by Larry Page and Sergey Brin prior to 2004. Steve Jobs certainly thought it was – hence the famous pledge to "go thermonuclear" on the Chocolate Factory. ®

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