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Yuri Filatov
Yuri Filatov

Posted on • Originally published at andersenlab.com

Why Apple Is One of the Largest Customers of Its Competitor Amazon

Although Apple and Amazon are direct competitors in many markets, the iPhone producer spends over $30 million per month on Amazon Cloud. Apple is prepared for these costs and indirect support of their competitor - all this in order to provide their clients with a high-quality iCloud service.

Apple found and filled its niche in the smartphone market, but now this market is close to a supply glut. The company needs to explore new directions, and online services are ideal for this. Along with iPhone retail sales statistics, the company started publishing information about revenue from such products as AppleCare, Apple Pay, and iCloud.

Nowadays, about a billion Apple devices are actively used worldwide. In order to support such a large number of Apple devices, it is necessary to develop infrastructure. And that’s what the company is doing. Particularly, Apple plans to spend $10 billion in the period from 2018 to 2022 on building and maintaining data centers in the United States. Half of this sum is already invested and assimilated.

Currently, to maintain iCloud, Apple uses the services of not only small cloud providers but also giants like Amazon, Google, and Microsoft. However, Apple doesn’t use AWS or other cloud services for the rest of their products.

Apple spends over $350 million a year on maintaining AWS. Since the company has not developed its own infrastructure yet, expenditure on cloud services continues to rise. Despite planning to build its own data centers, Apple has signed a $1.5 billion five-year contract with Amazon for using AWS.

AWS is one of Amazon's main revenue generators. And although Apple is one of the largest customers of Jeff Bezos’s corporation, the money Amazon receives from Apple is only a small fraction of the total flow. Lyft, Pinterest, Snap, and other tech giants sign billion-dollar contracts with Amazon in order to use their cloud resources.

According to Forrester’s report, over 40% of global players are already using cloud services provided by Amazon, and within five years, this figure is predicted to double. The advantages of using Amazon's services are clear. And of course, in order to use them as efficiently as possible, a professional approach is needed.

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