Jonmichael Moy: Apple is spending millions each month on AWS

Tuesday, 23 April 2019

Apple is spending millions each month on AWS

As Apple looks to expand its services business to make up for lost iPhone sales, new information has revealed that the company is spending more than $30m a month on Amazon's cloud service AWS.

The company's cloud expenditure shows just how determined it is to deliver online services such as iCloud quickly and reliably even if it has to depend on a rival to do so.

Apple customers use more than one billion of its devices each month which has led its computing and storage requirements to grow immensely. The company is planning to build out its own infrastructure to handle this influx in user data and in January 2018, it announced plans to spend $10bn on data centers in the US within five years.

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While Apple depends on smaller third-party cloud providers to deliver its services it also relies on big cloud providers such as AWS and Google while Microsoft has provided cloud tools to the company in the past. The company has revealed in the past that it uses AWS for iCloud storage but it did not disclose whether any other Apple services use AWS or other third-party clouds.

Rising AWS costs

At the end of March of this year, Apple's spending was on track to average over $30m per month in the first quarter. According to those familiar with the matter, this will be more than 10 percent higher than during the same period a year ago.

If Apple continues to use AWS at those levels for the rest of the year, its annual spending on Amazon's cloud services would exceed $360m.

The company's cloud expenditures will likely continue for the foreseeable future as it recently signed an agreement that includes a commitment to spend at least $1.5bn on AWS over the course of five years.

Apple is not the only company to make a long term agreement with Amazon for its cloud services as Lyft, Pinterest and Snap have all committed to paying AWS $300m, 750m and $1.1bn respectively for its services over the next few years.

Via CNBC