Cloud Makes For Strange Bedfellows: Apple Signs On With Google, Cuts Spending With AWS 


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Alphabet's Google has quietly scored a major coup in its campaign to become an enterprise cloud computing powerhouse, landing Apple as a customer for the Google Cloud Platform, multiple sources with knowledge of the matter told CRN this week. 

Since inking the Google deal late last year, Apple has also significantly reduced its reliance on Amazon Web Services, whose infrastructure it uses to run parts of iCloud and other services, said the sources, who all requested anonymity to protect their relationships with the vendors. 

Apple has not abandoned AWS entirely and remains a customer, the sources said. 

 

[Video: Apple Goes With Google Cloud, Cuts Spending With AWS]

According to the sources, Google executives have told partners that Apple is spending between $400 million and $600 million on Google Cloud Platform, although this couldn’t be independently confirmed. Also unclear is whether this range refers to an annual spending rate or a set amount of capacity. 

AWS said Apple's move to work with Google does not signify "competitive defection."

“It’s kind of a puzzler to us because vendors who understand doing business with enterprises respect [non-disclosure agreements] with their customers and don’t imply competitive defection where it doesn’t exist," said the AWS spokeswoman in an emailed statement sent to CRN late Wednesday.

Spokespeople from Google and Apple weren’t immediately available for comment. 

Morgan Stanley, in a report released last month, estimated that Apple spends around $1 billion annually on AWS, but speculated that Apple may look to reduce that figure by moving more computing to its own data centers. 

Cupertino, Calif.-based Apple is spending $3.9 billion to build new data centers in Arizona, Ireland and Denmark, the first of which is set to open later this year. 

While it might seem odd for Apple to give business to a cloud service run by a bitter rival in the mobile device market, such arrangements aren’t uncommon in a public cloud market that’s seeing intense pricing pressure, particularly in compute and storage services. 

Reports of Apple using AWS and Microsoft Azure to run parts of its cloud services date back to 2011, although neither AWS nor Microsoft has ever confirmed that Apple is a customer. 

But in an Apple iOS Security white paper published in 2014, Apple acknowledged that encrypted portions of some iOS files are stored in Amazon S3 and Microsoft Azure. 

Mountain View, Calif.-based Google, which last November hired VMware co-founder and former CEO Diane Greene to lead its cloud business, is said to be aggressively forming partnerships and swinging deals to bring in large enterprise customers. Last month, Google signed up Spotify, which runs part of its streaming music service on AWS, as a cloud customer. 

CRN reported last month that Google and Verizon were in talks about a strategic partnership involving a Verizon-branded hybrid cloud service running on Google Cloud Platform. 


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