Report: Apple (Finally) Leaping Aboard Cloud Services Bandwagon

Apple, a leader in the mobile hardware market, is planning to extend its presence to the cloud services space, according to a report by Bloomberg.

The Cupertino, Calif.-based company reportedly is building a high-speed network, as well as upgrading how it assembles data centers, which would put it on the same level as leading cloud service vendors such as Microsoft and Google.

Charles King, analyst with market research firm Pund-IT, said he believes Apple's investments in networks and data centers is "smart," particularly given the increasing growth of content-based services and the significance of supporting a consistent, quality customer experience.

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"Considering how competitive these markets are becoming, a significant failure by any vendor is likely to result in customers migrating to competitors," said King. "One of the most interesting things about the current market is the playing field's relative levelness. In other words, there are few really unique infrastructures or offerings out there, meaning that all a vendor needs to compete [in this space] is commitment and financing, both of which Apple has in surplus."

According to Bloomberg, Apple is planning to invest billions into its network and data center divisions. Apple did not respond to CRN's request for comment before publication.

The smartphone company traditionally has utilized other network providers to support its iCloud and iTunes consumer services.

On the data center front, Apple has utilized storage gear from NetApp and servers and Ethernet switches from Hewlett-Packard. The company operates data centers on both coasts of the U.S., including a bevy of data centers in California, and a major data center in Maiden, N.C.

According to the report, Apple will stay with these existing vendors, but will begin strengthening its current infrastructure through building out more of its own gear to assemble faster networks and upgraded data centers.

One product Apple is reportedly working on, for instance, is a top-of-rack switch, a model of next-generation data center infrastructure, according to Bloomberg.

Solution providers, for their part, think Apple's investment in cloud services has been inevitable, given the vast amounts of data and content running through the company's various products.

"Given the recent Apple keynote speech content surrounding things like streaming music as a service and the growing use in the consumer space of technologies such as iCloud, I would be surprised if they weren't investing in the back-end infrastructure to service those technologies," said Douglas Grosfield, president and CEO of Xylotek Solutions, a Cambridge, Ontario-based solution provider.

Apple's investment would put it in control of its infrastructure as the company creates more content-based services for customers.

The company recently introduced Apple Music at its Worldwide Developers Conference, a music service that combines streaming music, streaming radio and music downloads. Apple also is rumored to be coming out with a new version of Apple TV, a box that connect users to the Internet and allows them to stream video to their TV, which reveals another technology consuming vast amounts of data and tapping into networks.

David Felton, founder of Norwalk, Conn.-based solution provider Canaan Technology, said the investments would give Apple full control of data and content, up to "the last mile."

"It's a smart idea for Apple … they certainly have the money for it," said Felton. "I think it makes perfect sense. Apple is essentially streaming a commodity, what they can do to be different is the quality in which it streams it. The timing is right, because now Apple is offering this new music service, as well."

PUBLISHED JUNE 11, 2015