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Report: Apple has inked a five-year, $1.5B cloud contract with AWS
The relationship between Apple Inc. and Amazon.com Inc. is one of the most prominent examples of the so-called coopetition that has permeated the tech industry. Apple competes with the online retail giant in a growing number of markets, while also hosting a sizable portion of its infrastructure on Amazon Web Services Inc.’s cloud.
A report published by CNBC today sheds new light on the degree to which the iPhone maker depends on its rival. According to two sources who spoke with the network, Apple spent an average of $30 million a month on AWS infrastructure and services in the first quarter. That puts the company on track to sink $360 million into Amazon’s coffers by the end of the year.
The reported figures indicate Apple’s use of AWS services is steadily growing. One of the tipsters said the iPhone maker spent a total of $350 million with the Amazon subsidiary in 2018.
Apple seems to buying cloud services through same type of expansive, long-term contract that AWS usually signs with big enterprise customers. The iPhone maker is said to have recently committed to spending $1.5 billion over a five-year period.
If the information is accurate, this makes Apple one of AWS’ biggest customers in the tech industry and possibly overall. For comparison, newly public Pinterest Inc. has a deal with the cloud provider to buy $750 million worth of services and infrastructure through mid-2023, while Snap Inc. will spend more than $1 billion by the end of 2022.
Apple and Amazon are growing their cloud collaboration while not only continuing but actively stepping up their competition in other areas. Last month, Apple debuted a pair of streaming services that threaten to lure watchers away from the online retail giant’s Fire TV platform. And last week, Amazon added a free ad-supported tier to its Prime Music service, which competes in the same market as Apple Music.
But while the iPhone maker plans to use AWS for the foreseeable future, it’s also taking steps to become less reliant on outside cloud services. Apple last year set aside $10 billion to build new data centers in the U.S. to support the growth of iCloud, Siri and the other services it offers to iOS users.
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