Apple signs on with Google Cloud Platform, cuts spending with Amazon Web Services

“Alphabet’s Google has quietly scored a major coup in its campaign to become an enterprise cloud computing powerhouse, landing Apple as a customer for the Google Cloud Platform, multiple sources with knowledge of the matter told CRN this week,” Kevin McLaughlin and Joseph Tsidulko reports for CRN.

“Since inking the Google deal late last year, Apple has also significantly reduced its reliance on Amazon Web Services, whose infrastructure it uses to run parts of iCloud and other services, said the sources, who all requested anonymity to protect their relationships with the vendors,” McLaughlin and Tsidulko reports. “Apple has not abandoned AWS entirely and remains a customer, the sources said.”

“According to the sources, Google executives have told partners that Apple is spending between $400 million and $600 million on Google Cloud Platform, although this couldn’t be independently confirmed,” McLaughlin and Tsidulko reports. “Morgan Stanley, in a report released last month, estimated that Apple spends around $1 billion annually on AWS, but speculated that Apple may look to reduce that figure by moving more computing to its own data centers.”

Read more in the full article here.

MacDailyNews Take: Why not use the least expensive play in the market if reliability is comparable?

35 Comments

  1. Why the hell is Apple supporting Google’s or Amazon’s cloud services? Why doesn’t Apple create its own services? Apple is supporting rival services who are hosted by higher valued companies by Wall Street than Apple is. I don’t get Apple at all. Cloud services are a really big thing in Wall Street’s eyes and Apple is not even bothering with it. Supposedly that’s a huge reason why Apple is always being called a doomed company.

    1. For the same reason they don’t make all their own devices in their own factories and why they don’t design and manufacture every component of their devices. They go with the option(s) that makes the most sense financially. If cloud services were such a great business to be in then Amazon, Google, et al would be making much larger profits than they are. Obviously it’s becoming an ever bigger thing, but it’s a competitive market and I assume Apple got a good deal.

      1. Yes rather like using google search and maps simply not worth getting involved when you can simply use what’s on the market… Oh hang on a minute they didn’t get that decision right did they back in the day when they seemed a rather unimportant add on. Don’t know about this one but too often Apple actually fails to envisage situations ten years down the line and prefers to go with the accountants advice a out saving money to impress all those analysts. Oh hell …

    2. Apple doesn’t have server hardware since they killed off the xServer. OS X isn’t stable enough to run in a server environment and it has no ability to scale. Apple makes a rocking iMac but they choose not to play in the business/server market.

  2. do i detect a bit of hypocrisy here mdn?

    for an entity (you) that ceaselessly badmouths googles well deserved reputation for selling and profiting from peoples information, not to mention the epic untrustworthiness of eric t mole…

    why on earth would apple, and why on earth should we, trust them for the safekeeping of any of our data of any kind?

    1. The data Apple places on Alphabet’s servers will be encrypted. Alphabet will not gain any advantage for storing it for Apple except a modest profit. Even Apple cannot access the majority of the users’ data, as it is keyed to the user’s passcodes when Apple does not have.

  3. Apple outsources its manufacturing.
    Apple outsources its cloud servers.
    This explains why Apple and Google have similar market caps despite the large P/E difference. Apple’s business model is dependent on other companies which are also available to its competitors. Google does it themselves.
    Apple is in a rat race to stay out front. So far, they are doing reasonably well. But this is why everybody freaks when Tim Cook misses a window of opportunity or is focusing on items that are not important to the business.

      1. Then you should get worried now. Apple investors are being penalized, while Amazon and Google investors are being rewarded. This is why — because Apple is being regarded as a gold prospector, whereas Amazon, MS, and Google are regarded as more stable enterprises selling pick axes.

        Besides, think of the principle. It is shameful that Cook gives any money to Google for anything. Stop the insanity!

  4. Apple just cannot seem to get the cloud thing right. It is almost as though they don’t see the value in it. They have more than enough money to build the best data centers money can by. Can anyone confirm whether or not iCloud API’s have gotten any better?

  5. Apple is the best supply chain management company in the world. I doubt they are using Google or AWS as private label iCloud services. I believe they are using these services for internal global supply chain management as well as Oracle or SAP and possibly logistics management. These are not Apple specialties. Apple writes software for consumers, not the enterprise. They use HP servers, they use Chrome and Windows for web testing, they partner on search. They are only going to use the best for whatever services they need as a business. But they don’t have to write their own enterprise software when great enterprise software already exists. Plus they get some leveraging. Samsung is reeling in the marketplace because they were a disloyal partner. Amazon is now competing with ATV and iPad and not selling Apple stuff so much anymore so there is a price to pay.

    If Google oversteps its bounds on something else, there are other companies and Apple could just buy IBM for example. So it’s a chess game, not a religion.

    1. I do not believe Apple would use others cloud services for supply chain management. Gaagle would have access to some of Apple’s dearest trade secrets. Apple doesn’t roll out Apple Watch numbers because the competition may find out. I just hope whatever is on amazsin and gaggles cloud is encrypted. Come on Apple, build more clouds!

  6. Well the timing of this lines up pretty well with the fact that earlier this month Apple lost perhaps what is its last appeal opportunity and will have to fork over nearly a half-billion dollars in the ebooks case. Who was driving the agenda in that situation and who profited the most from Apple losing? Amazon. Apple has shown before with Samsung that they’re definitely willing to pull their spending (where they can) from bad acting competitors.

    1. You mis-construe what is going to happen with that $435 billion in the eBook case. The vast majority of it will go to sales on the Apple Ebook store. . . which means it will go right back into Apple’s sales figures. Apple is required to refund about 80% of it to eBook buyers (something like 20% of the settlement goes to the state prosecutors for costs) and the easiest way is to allow ebook buyers a credit to buy books on Apple’s eBook store. Apple will sell eBooks, pay the publishers 30% and book the rest as revenue on the retail price of the books the customers select. There will be a huge surge in eBooks sales.

  7. So how is this supposed to help Apple and their encryption battle with the government? You know Google won’t encrypt their servers and if their Android OS is any indication, there will be all kinds of security holes. Not to mention that Google itself has access to everyone’s data, ripe for mining and abuse. What the hell are you thinking Apple?

    1. How would Google encrypt their servers? Wouldn’t the relevant thing be the connections being encrypted for the transfer of data, then the individual data of customers then being encrypted when written to the server? Apple will just be storing data, it’s up to them if it’s encrypted or not, the data will be no different than data stored on any other service Apple also uses. I’d be pretty concerned if it was down to Google (or anyone else) to encrypt the data their customers (such as Apple) place on their servers.

      1. Would it be too much to ask for Apple to explain to users exactly how their data is protected and stored?

        Until they do, why should any Apple user trust the iCloud?

        Cook has completely tarnished the Apple reputation by doing stuff like this. I remember when Apple stood for excellence, not just money.

        1. Apple does explain exactly how iCloud data is protected and stored in the iOS Security Guide. It’s certainly no secret.

          And the reason Apple customers trust Apple is because Apple goes to extraordinary lengths (often *much* further than the competition) to protect customer data:

          https://www.apple.com/business/docs/iOS_Security_Guide.pdf

          “iCloud stores a user’s contacts, calendars, photos, documents, and more and keeps the information up to date across all of his or her devices, automatically. iCloud can also be used by third-party apps to store and sync documents as well as key values for app data as defined by the developer. Users set up iCloud by signing in with an Apple ID and choosing which services they would like to use. iCloud features, including My Photo Stream, iCloud Drive, and Backup, can be disabled by IT administrators via a configuration profile. The service is agnostic about what is being stored and handles all file content the same way, as a collection of bytes.

          Each file is broken into chunks and encrypted by iCloud using AES-128 and a key derived from each chunk’s contents that utilizes SHA-256. The keys, and the file’s metadata, are stored by Apple in the user’s iCloud account. The encrypted chunks of the file are stored, without any user-identifying information, using third-party storage services, such as Amazon S3 and Windows Azure.”

    1. Yes, I wondered that as well. I was under the impression that iCloud data was only being stored at Apple’s own data centers in North Carolina, California, and Oregon.

      Does this mean every iCloud user’s account is being subjected to Google’s “privacy” policy?:

      — If you have any non-Gmail email account (including your own domain-based email account), are you aware what happens when you reply to anyone who sends an email message to you from their Gmail account? That’s right, the text in the originating message as well as the text in YOUR message are auto-scanned and analyzed upon passing through the Gmail servers. The results are added to your Google profile that is indexed under your own email address, and then utilized for ad profiling and and any other marketing purposes they see fit to use.

      — Contacts stored in a Gmail account are used for profiling and association with other Google-indexed accounts (including non-Gmail accounts).

      — When you perform a search using Google, the text string of your query as well as the URLs you subsequently click are recorded. All of them. Every. Single. Time.

      — The videos you watch on YouTube are also added to your profile.

      — The photos you upload to Google Photos absolutely do have facial recognition applied, with the results being cross-referenced with your Google profile and other Google profiles. In other words, they know who know.

      — Let’s be clear: Even if you don’t have a Gmail account, you have a Google profile from using Google search, watching YouTube, or exchanging an email with someone who uses a Gmail account. And this is linked with every single website you visit that has ads, because those are served and tracked by a variety of Google ad services such as Double-click, etc.

      — All of this information is retained forever by Google.

      None of this is paranoid conspiracy theory; it’s simply the way Google does business. And the overwhelming majority of people worldwide seem to have gladly accepted it.

      1. “Does this mean every iCloud user’s account is being subjected to Google’s “privacy” policy?”

        No, that’s not at all what it means. What is stored on these servers is already encrypted without any no user-identifying information.

        https://www.apple.com/business/docs/iOS_Security_Guide.pdf

        “iCloud stores a user’s contacts, calendars, photos, documents, and more and keeps the information up to date across all of his or her devices, automatically. iCloud can also be used by third-party apps to store and sync documents as well as key values for app data as defined by the developer. Users set up iCloud by signing in with an Apple ID and choosing which services they would like to use. iCloud features, including My Photo Stream, iCloud Drive, and Backup, can be disabled by IT administrators via a configuration profile. The service is agnostic about what is being stored and handles all file content the same way, as a collection of bytes.

        Each file is broken into chunks and encrypted by iCloud using AES-128 and a key derived from each chunk’s contents that utilizes SHA-256. The keys, and the file’s metadata, are stored by Apple in the user’s iCloud account. The encrypted chunks of the file are stored, without any user-identifying information, using third-party storage services, such as Amazon S3 and Windows Azure.”

    1. Cash does not equal expertise. Apple has had zero success in this area. They don’t have the hardware, software or the know how. Apple is great at many things but they choose not to participate in this arena

    2. If it is cost effective for a business to use services like AWS/Google/etc for cloud storage as opposed to standing up their own data centers, then there’s little reason not to use those existing services. Simple business sense.

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