Apple Cut AWS Spending By Almost Half In 2018: Report

'The company was partly motivated to run more of its own cloud operations to save money, a decision some other large users of cloud services like Dropbox have also made,' according to a Thursday report, citing a person who has worked on cloud projects at Apple.

Technology giant Apple drastically cut its expenditures for cloud computing from Amazon Web Services last year to approximately $370 million from $775 million in 2017, according to a report Thursday by The Information.

Apple’s curbed spending appetite was due in part to its decision to operate more of its own cloud services, in keeping with its philosophy of controlling the technology behind its products, the tech news website said, citing an unnamed person with direct knowledge of the Apple figures.

CRN reached out to Apple and AWS for comment but had not heard back by press time.

Apple’s cloud usage supports its internet and iCloud offerings for backing up photos, videos and other data from Apple devices, including iPhones, iPads and computers.

The desire to save money also prompted Apple’s decision to reduce AWS cloud spending, The Information said.

“The company was partly motivated to run more of its own cloud operations to save money, a decision some other large users of cloud services like Dropbox have also made,” The Information reported, citing a person who has worked on cloud projects at Apple.

Apple also wants better web infrastructure to help improve features in its growing array of web services, particularly on the iPhone, according to the report.

Despite the cutback, Apple was the second-biggest corporate customer of AWS last year behind only Netflix, according to The Information, and it’s on track to spend approximately the same amount this year.

CNBC this week reported that Apple is spending more than $30 million per month for cloud computing from AWS, putting it on track to spend upward of $360 million this year for the services.

Apple’s strategy is that having its own cloud storage also gives it more bargaining power in negotiations with cloud providers, The Information reported.

“It has allowed us to keep those relationships hot,” the person who has worked on Apple cloud projects told The Information. “We can mix and match.”

Apple also uses Google Cloud, but slowed its increases in that spending due to an alleged incident in which a Google data center failed due to a fire, resulting in some iCloud user data, including photos, being inaccessible to Apple users for a period of time, The Information said, citing two people briefed about the issue at Apple. Apple discovered Google had been storing copies of Apple data within a single data center in some instances, rather than in multiple locations, as Apple expected, the two people told The Information.

AWS and Google did not provide comment for The Information report, the website said.

Apple’s reported AWS spending reduction isn’t really a surprise, according to Brendan Caulfield, cofounder at ServerCentral Turing Group, a Chicago-based AWS Advanced Consulting Partner, Managed Service Provider Partner and Authorized Public Sector Partner.

“Apple has so much invested in their cloud services that they ultimately need -- and I’m sure want -- as much control over that as they can get,” Caulfield said. “Was it easier (and) faster to initially roll-out services without building the entire cloud platform backend? Absolutely. They’ve more than validated their position in the market and are moving judiciously towards their own platform, as we would expect any company at their scale to do.”