Apple has shifted a portion of its cloud services
business from Amazon Web Services to the Google Cloud Platform,
according to reports published this week.
The company reportedly maintained a smaller presence with AWS, as well as its existing relationship with Microsoft Azure.
It is spending between US$400 million and $600 million under the cloud services agreement, which was signed late last year, CRN reported, citing conversations that Google executives have held with others.
Amazon threw a splash of cold water on the report, raising questions
about why Apple would engage in possible violations of its contractual
"It's kind of a puzzler to us, because vendors who understand doing
business with enterprises respect NDAs and their customers and don't
imply competitive defection where it doesn't exist," Amazon said in a
statement provided to the E-Commerce Times by spokesperson Kerri
Apple Shift Predicted
Morgan Stanley analyst Brian Nowak warned in a research note last month
that Apple might reduce its reliance on AWS for cloud services.
CEO Tim Cook in a January conference call with analysts cited Apple's
plans for additional data centers as a driver of 2016 capex growth,
Nowak said. Apple announced plans to build data centers in Ireland and
Denmark in 2017 and in Mesa, Arizona, later this year, for a total of
more than 2.5 million square feet of space, in a bid to power various
services, including iCloud, iTunes and the App Store.
The company spent about $1 billion on data centers in 2015, including
money spent on AWS, Morgan Stanley analyst Katy Huberty said, noting
that it could take one to two years to shift that business away from
It has a team working on those plans, under the code-name "McQueen," as in The Great Escape star Steve McQueen, according to a report in
More the Merrier?
Apple is not abandoning Amazon and Azure as providers of cloud services,
but adding Google to its stable of providers, according to Jeff Kaplan,
managing director of
There also is speculation about whether Apple is using its experiences
with those companies to shape plans for its own cloud services.
"Apple's tactic of using multiple cloud providers is comparable to
what other enterprises are doing today -- experimenting to determine
which cloud services are the best fit for their specific needs," he told
the E-Commerce Times. "In many cases, they are selecting multiple
providers so they aren't dependent on a single source."
Apple likely is working with multiple vendors to take advantage of
the fierce competition in the cloud services space and leverage costs,
said Kevin Krewell, principal analyst at
"AWS is the big dog in cloud services," he told the E-Commerce Times.
"Google is likely more aggressive on cost, trying to gain share. For
Apple, this could save money and show Amazon it's willing to shift
vendors and keep its suppliers nervous."
Another Google Gain
The move marks another victory for Google, which last year hired VMware cofounder
Diane Greene to help ramp up its corporate cloud services business.
Just last month, streaming music provider Spotify announced that it
had moved its business over to Google as part of a decision to move away
from buying data centers.