Apple to spend at least $1.5 billion on AWS over five years

Apple AWS spending

Apple is spending more than $30 million a month on Amazon Web Services, CNBC reports.

Citing people familiar with the arrangement, the publication adds that Apple recently signed an agreement to spend at least $1.5 billion on AWS over the course of five years.

At its current spending rate, Apple will pay more than $360m for this year, $10m above its costs last year.

While Apple is paying billions to Amazon, it is far from the smartphone giant’s only infrastructure expenditure.

The company also uses Google Cloud, as well as smaller cloud providers, and colocation facilities. But, most of all, it uses its own data centers – last year announcing plans to spend more than $10bn over five years on US data centers alone.

Currently, the company operates large facilities in Maiden, North Carolina; Newark, California; Prineville, Oregon; Reno, Nevada; and Mesa, Arizona. The company used more than one billion kWh of electricity in fiscal year 2018 to power its data centers, Apple’s latest environmental report reveals. It also used 328 million kWh of electricity to power its colocation facilities around the world (244m in the US, 31m in Europe, and 52m across APAC).

But, despite efforts to ramp up its data center footprint to reduce its reliance on cloud companies that compete with it elsewhere, Apple has struggled to grow at speed.

Take the company’s upcoming data center in Viborg, Denmark. It was set to open in late 2017, but work on the site is believed to have ceased due to a contractor dispute. It is building a second data center in Aabenraa, Denmark, which was originally planned to begin operations in the second quarter of 2019 – but it is unclear if the same contractor is being used.

That second facility, meanwhile, was chosen after Apple’s other planned European data center was beset by even more difficulties. The proposed Galway, Ireland data center was hit with various legal challenges, and ultimately canceled.

With iPhone sales slowing, Apple is expected to push further into online services – all of which will require data centers, be it from Apple, colocation or cloud providers.

Among its services are the iOS App Store, AppleCare, Apple Pay, Apple Music and iCloud. Later this year, the company will launch Apple TV+, a streaming service akin to Netflix and Amazon’s Prime Video.

Should it prove a success, it will require huge infrastructure investments to run – according to the latest Global Internet Phenomena Report from Sandvine, Netflix consumes 15 percent of the total downstream volume of traffic globally. To manage this, Netflix primarily uses Amazon Web Services.