Google Cloud Computing Service Wins Big Success in Obtaining Apple's $600 Million Service Contract
Just four months after Diane Greene, the co-founder and former CEO of VMware, joined Google (Weibo) as the director of Google for Work, Cloud Platform and Google Apps, she led Google to a big victory: let Apple leave Amazon and become its own customer.
According to reports from CRN, Apple has signed a contract worth US $400 million to US $600 million with Google to use Google's cloud platform service Cloud Platform. It is not clear whether this price is an annual fee or the transaction of the entire agreement, but the source said that this fund comes from Google's investment in Amazon cloud computing service AWS. Although Apple has not completely abandoned the use of AWS services, the cooperation with Google will reduce Apple's investment in AWS by about half.
Although Apple has never publicly admitted that it is a customer of Amazon AWS, the company has been using AWS and Microsoft's cloud computing service Azure. In 2011, it was reported that Apple was using AWS, and a subsequent confidential document of Apple also confirmed this news. The New York Times previously reported that Apple's iCloud service uses services from Amazon AWS and Microsoft Azure.
Apple is currently investing $3.9 billion to build new data centers in Arizona, Ireland and Denmark. Among them, the data center in Arizona will be put into use by the end of this year. Brian Nowak, an analyst at Morgan Stanley, estimated last month that Apple's current annual investment in AWS services is about $1 billion. The analyst believes that as Apple begins to build its own new data center, the company will sooner or later reduce its investment in AWS services. In addition to iCloud, Apple operates large data centers for iTunes and App Store.
Sources said that Green was responsible for persuading Apple to use Google's cloud computing services. After joining Google, she has been engaged in the alliance between Google cloud computing services and other companies, and has been making advances to some large enterprises. Considering the history of continuous struggle between Apple and Google in the mobile computing market in the past few years, it is a huge victory for Google to enable Apple to become the company's cloud computing customer.
CRN reported last month that Google and Verizon Communications, the US telecom service provider, were negotiating a strategic alliance, involving running Verizon's hybrid cloud services on the Cloud Platform. Making Apple the company's cloud computing service customer is also Green's second big victory after joining Google. Spotify, a music streaming service provider, announced last month that it would abandon AWS services and use Google's cloud platform service Cloud Platform instead. According to the data provided by Synergy Research, in the fourth quarter of last year, Google's revenue from Infrastructure as a Service and Platform as a Service products Compute Engine and App Engine was less than 300 million dollars. Synergy Research believes that the income level of the above two services is only one seventh of that of AWS similar services.
At the same time, Amazon AWS recently lost a customer - dropbox, a cloud storage service provider. However, dropbox did not use Google's services, but chose to use its own data center, because the company is already large enough.
When Google entered the cloud computing service market, it vowed to wage a price war with the market leader Amazon. Industry observers believe that with the new cooperation agreement signed with Google, Apple can adjust the price of the service agreement between Amazon and Microsoft. Michael Fraser, CEO of InfiniteOps, a cloud service provider, said, "Google has laid optical fiber in many regions, so this company has a wider reach than other cloud service providers." Because it provides excellent services and lower prices, Fraser believes that Google's cloud computing services will attract more enterprise customers. He also said that his company's internal tests showed that Google's cloud platform service Cloud Platform "performs better than other major cloud service providers."
While Amazon AWS has become the preferred service for many start-ups who cannot afford to build their own infrastructure, more and more large enterprises have begun to use Google's cloud computing services. At present, companies such as Snapchat, PwC, General Mills, Coca Cola, Best Buy and HTC have become customers of Google's cloud computing services.
Google is currently trying to change its position in the cloud computing service market, which is the third place behind Amazon and Microsoft. Urs Holzle, an executive of Google, said that the company's revenue from cloud computing business in 2020 will exceed that from advertising business. So far, Google, Apple, Amazon and other three companies have not commented on Apple's becoming a customer of the company's cloud platform service Cloud Platform.
