Apple spends more than $30M per month on Amazon Web Services

AppleInsider

Apple is one of the biggest customers of Amazon Web Services, it has been revealed, with the iPhone maker allegedly spending in excess of $30 million per month in order to enable services like iCloud to function reliably and at scale via the retailer's network of servers.

Apple's popular and varied online services has made Apple a major client of Amazon Web Services (AWS), with its distributed collection of servers making it ideal infrastructure for Apple's cloud-based operations to use. While it has been known for some time Apple relies on Amazon, the terms of the relationship were largely unknown.

According to people familiar with the arrangement speaking to CNBC Apple spend more than $30 million per month on AWS in the first quarter of 2019. The figure apparently demonstrates a year-on-year increase of more than ten percent, and with Amazon's prices largely remaining static, suggest Apple's requirements are continuing to grow.

For the full year of 2019, it is tipped Apple will spend over $360 million with Amazon, up from approximately $350 million spent in 2018. The outlay is believed to make it one of Amazon's biggest clients, with a higher expenditure than Pinterest and Lyft.

It is likely that Amazon will continue to power Apple's online efforts for some time, as within the last few months, Apple reportedly signed a new agreement with the retailer, committing to spend at least $1.5 billion over a five-year period.

The $1.5 billion figure over five years, if accurate, is lower than Apple has spent per annum in the past. In 2016 and 2017, Apple was said to have spent $1.05 billion and $1.08 billion respectively for cloud support services from other vendors.

In 2017, an Amazon S3 outage caused problems for Apple. Some users of the iOS and Mac App Stores, iCloud Drive, Notes, iCloud backup, Apple TV, and Apple Music saw outages, induced by a configuration issue on Amazon's end.

smaffei

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

Soli

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

aaploutsider

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

A linked article in the above stated that they are guessing Apple will take 2+ years to abandon 3rd party cloud vendors in favor of their own.

auxio

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

Building your own data infrastructure, especially to the scale and reliability Apple needs for iCloud, is a huge undertaking.  Amazon has a big lead in this area.  My guess is that the data centers they have now are for their internal company data, which they wouldn't want to have in the hands of competitors.  Eventually they'll have everything built out enough to use for iCloud.

maestro64

So what are all the Data Center Apple has put in being used for?

sidrictheviking

Don’t forget that one data centre has been cancelled (in Ireland) and another has hit some kind of delay (in Denmark). So, building the data centres required to handle worldwide data is not so straightforward!

mjtomlin

smaffei said:

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

Data centers are locations to host servers. You don't think those servers are Macs running macOS do you? No. They're most likely leased systems running 3rd party services, including AWS. While I'm sure one service of AWS is hosting, a company the size of Apple would want and need to host their own servers, ergo Apple's massive data centers. Once built, then you bring in Cisco, Amazon, Oracle, Microsoft, IBM, etc.. to install their equipment and services.

tht

maestro64 said:

So what are all the Data Center Apple has put in being used for?

360m does not sound like a lot of money for Apple. Apple’s services revenue is on order 20b to 30b per year. Their margin is what, 25%? So, 15b is used to pay people’s salaries, pay for data center services (Siri, Maps, iCloud, Music, iTunes, Apple Support, App Store, Apple Store, etc), renting buildings, paying the electricity bill, etc.

Whatever they are doing with AWS is a small 2% of whatever is needed to run their services business. All those Apple data centers are being used to power the vast majority of their services business, not AWS.

All the article is saying is that Apple is a big AWS client at $360m per year. That’s about it. The rest is filler fluff and basically wrong in what it is implying if Apple’s services revenue is on order 20b to 30b.

zoetmb

aaploutsider said:

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

A linked article in the above stated that they are guessing Apple will take 2+ years to abandon 3rd party cloud vendors in favor of their own.

That makes a lot more sense then.   Two years to start saving $360 million a year over what they've already been saving is not that long a time, although I suppose some would argue that it's always less expensive to outsource.    

The other problem with Apple using 3rd party server farms is that it belies the notion that Apple is totally Green.   Their own server farms might be, but when they use third parties, they're not necessarily.    It's almost like paying your own employees well, but using contractors for services like building maintenance and cleaning and then they treat their employees poorly and underpay them, but you don't take any responsibility for that. 

Kuyangkoh

aaploutsider said:

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

A linked article in the above stated that they are guessing Apple will take 2+ years to abandon 3rd party cloud vendors in favor of their own.

Sounds like a poor plan from the beginning and Amazon is right from their business model of e-commerce. As far as green powered server farm, Amazon does not say anything....

thrang

There is a cost to providing the services regardless, so its not like its $30M a month vs. "nothing" if it was Apple's servers... More importantly, one would likely want more than one infrastructure to manage the enormous level of content and data Apple is delivering. This provides greater security for availability, scalability, and adaptability. I wouldn't be surprised if they utilized Azure as well...

lkrupp

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

You chose to present a negative narrative. If you read other reports about this they point out that Apple is also spending billions on its own server farms. So I see this Apple trying to keep up with increasing demand for its services and products, not propaganda. Your hatred of Apple is blinding you to the truth.

lkrupp

auxio said:

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

Building your own data infrastructure, especially to the scale and reliability Apple needs for iCloud, is a huge undertaking.  Amazon has a big lead in this area.  My guess is that the data centers they have now are for their internal company data, which they wouldn't want to have in the hands of competitors.  Eventually they'll have everything built out enough to use for iCloud.

Well then, the next time iCloud goes down are you going to blame Amazon then???? People scream bloody murder when an Apple service hiccups but you are postulating that Apple’s own servers don't provide those services yet. So why blame Apple when something happens?

Notsofast

People don't seem to understand the massive scale of Apple's "cloud" needs. They are pushing 1.5 BILLION devices around the world. They have the second largest music streaming service in the world. They have the largest App store in the world.  They have the largest news app service in the world with 100 million monthly active users. They have a massive streaming service called iTunes where people download movies, shows, etc. They have the largest podcast service in the world, etc. etc.  Yes, they have and are continually expanding their data farms, but spending a pittance to lease more space from AWS is both understandable and a tiny portion of their needs.

pjs_socal

I find it hilarious how so many people have no sense of scale whatsoever. $30M per month for data services represents the tiniest fraction of cloud computing resources that Apple uses for iCloud and media services. Apple probably uses AWS and Azure services to maintain bandwidth during peak demand periods, like software release days...

sacto joe

zoetmb said:

aaploutsider said:

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

A linked article in the above stated that they are guessing Apple will take 2+ years to abandon 3rd party cloud vendors in favor of their own.

That makes a lot more sense then.   Two years to start saving $360 million a year over what they've already been saving is not that long a time, although I suppose some would argue that it's always less expensive to outsource.    

The other problem with Apple using 3rd party server farms is that it belies the notion that Apple is totally Green.   Their own server farms might be, but when they use third parties, they're not necessarily.    It's almost like paying your own employees well, but using contractors for services like building maintenance and cleaning and then they treat their employees poorly and underpay them, but you don't take any responsibility for that. 

What makes you think that part of the deal isn’t that these servers have to be “green”? Knowing Apple, I’d say that was far more likely than not.

It’s more interesting to me that whoever made this report DIDN’T include that salient bit of information....

 BTW, I’m a firm believer that Clouds should be graded on a curve. The dirtier the Cloud, the more taxes they should pay, and those taxes should go to help those most harmed by global warming.

BittySon

pjs_socal said:

I find it hilarious how so many people have no sense of scale whatsoever. $30M per month for data services represents the tiniest fraction of cloud computing resources that Apple uses for iCloud and media services. Apple probably uses AWS and Azure services to maintain bandwidth during peak demand periods, like software release days...

The article says iCloud, not software release.

JohnDee

As long as it's encrypted I see no problem.
It's using the google snooping crims that I worry much more about.

elijahg

lkrupp said:

auxio said:

Soli said:

smaffei said:

Who else thinks this a poor business decision on Apple's part?

I would rather see them align with Microsoft (Azure) than Amazon (AWS). I see Microsoft as less of a competitor than Amazon (in many spaces).

And, what are all those Apple owned server farms doing besides using solar panels? With all of that propaganda Apple pushes out, I would have never thought they are paying Amazon $30 million a month,

I don't see it as a bad decision in terms of competition, but I do wonder why Apple needs this at all with all their efforts made to build out massive data centers. I can see have backups for systems that aren't on your hardware design, but this feels more like Apple's own data centers aren't performing well. Can that really be the cause? I don't think that's likely so I think I'm missing some key details.

Building your own data infrastructure, especially to the scale and reliability Apple needs for iCloud, is a huge undertaking.  Amazon has a big lead in this area.  My guess is that the data centers they have now are for their internal company data, which they wouldn't want to have in the hands of competitors.  Eventually they'll have everything built out enough to use for iCloud.

Well then, the next time iCloud goes down are you going to blame Amazon then???? People scream bloody murder when an Apple service hiccups but you are postulating that Apple’s own servers don't provide those services yet. So why blame Apple when something happens?

Have you evidence of Auxio blaming Apple for previous outages?

knowitall

Time to dismantle iCloud before we heat the planet to much.