Setback For Amazon: Google Convinces Apple To Use Its Cloud

Setback For Amazon: Google Convinces Apple To Use Its Cloud
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Four months ago, Google convinced enterprise queen Diane Greene to lead its untried cloud computing business, and then four months later, Greene already scored a second huge triumph for the search giant by landing Apple as a customer. By bringing the iPhone maker to Google, Greene also pulled the deal away from Amazon.

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Apple to use Google’s services

According to a report from CRN’s Kevin McLaughlin and Joseph Tsidulko, the smartphone maker recently signed a contract worth between $400 million and $600 million to use the search giant’s cloud platform. Citing unnamed sources, CRN informs readers that the money is coming from what the smartphone maker spends on AWS, though the annual or total value of that contract is not known for certain.

There are chances Apple won’t stop using AWS altogether, or the money it spends on AWS may reduce to half of what it is now. Apple has never disclosed anything publicly about being an AWS customer, but its use of AWS and Microsoft’s cloud Azure has been reported broadly since at least 2011. Apple confirmed this in a security document, and The New York Times also reported that the smartphone maker uses AWS and Azure for parts of its iCloud services.

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Apple spends about $1 billion a year on AWS, estimated Morgan Stanley analyst Brian Nowak just last month. The analyst believes that the iPhone maker was planning to cut those costs sooner or later as it builds its new data centers. Apple runs huge data centers for iTunes and the App Store in addition to iCloud.

Greene scoring big clients for Google

Given Google’s and Apple’s surly history in the mobile computing market over the past few years, this new partnership is quite impressive. It is widely believed that Greene convinced Apple to try Google’s cloud. Greene has been busy trying to build more favorable partnerships for the search giant, and this Apple deal is her second big achievement. Last month, digital music service Spotify declared that it’s moving from Amazon to Google

Google is determined to shrug off its status as the third most popular cloud vendor. Amazon and Microsoft have taken the first two positions. The search giant could be making much more money from cloud computing services by 2020 than it does from advertising, said Urs Holzle, Google’s top cloud executive.

An AWS spokesperson emailed ValueWalk with the following comment:

“It’s kind of a puzzler to us because vendors who understand doing business with enterprises respect NDAs with their customers and don’t imply competitive defection where it doesn’t exist.”

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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