Apple’s cloud business is hugely dependent on Amazon

Apple’s future beyond the iPhone increasingly involves software services, ranging from Apple Music and iCloud to its new TV Plus video offering and its News Plus magazine subscription. Yet a big factor in helping those cloud-based services operate across its nearly 1.5 billion active devices simultaneously is the company’s ongoing contract with Amazon, specifically Amazon’s cloud computing division. According to CNBC, Apple is one of Amazon Web Services’ biggest customers, with monthly payments to the cloud division totaling more than $30 million and increasing.

Now, CNBC reports that Apple has not publicly said it relies on AWS for more than iCloud. But even still, an expenditure of more than $360 million a year means Apple is deeply reliant on AWS to operate core parts of its business, even though doing so means working with a soon-to-be-rival in online video and a current competitor in areas like artificial intelligence, streaming music, and smart home products.

Apple is far from the only company to run parts of its cloud on Amazon servers. A number of large tech companies that have filed to go public this year have revealed in financial documents that they pay Amazon hundreds of millions per year. That includes both Lyft and Pinterest.

Lyft said it has committed to paying Amazon $300 million through 2021 due to an ongoing contract, while Pinterest says it will have paid Amazon around $750 million by the end of a six-year contract expiring in 2023. A number of other companies not large enough to operate their own data centers or cloud services of their own — like Google, Facebook, and Microsoft do — have also publicly disclosed substantial AWS contracts, including a more than $1 billion commitment from Snap Inc. running through 2021. Other big tech firms like Netflix and Spotify have notably been using AWS for years, making their streaming empires reliant on Amazon’s cloud.

It’s not clear in this case that Apple will require much more compute from AWS and thus a larger, more expensive contract. Apple runs a number of data centers of its own throughout the US and it is likely a chunk, or even a majority, of its online services run on those data centers, although the company has never explicitly disclosed this information. Neither Amazon nor Apple were immediately available for comment.

Regardless, the size of Apple’s AWS commitment is notable if only for shedding light on just how much money it costs, at a minimum, to run a service like iCloud operating on nearly 1.5 billion devices. For Apple, which is trying to transform itself into a service provider and entertainment behemoth that doesn’t have to rely so heavily on selling expensive phones every year, it’s an expenditure that will likely only continue to soar.

[“source=theverge”]