Wall Street is Skeptical About Apple Being Google’s Cloud Service Big Costumer

March 23
9:10 PM 2016

Reports have confirmed that Apple is moving at least some of its cloud system to Google's Cloud Platform. Previously, the tech giant is using only Amazon's AWS service to store all its cloud data. While the company has its reasons to divide its reliance on cloud computing services to two platforms, Wall Street among others is skeptical about the move.

Becoming a new Google customer doesn't mean that Apple is ditching Amazon's services once and for all. The company will continue to use AWS services for its cloud data. However, reports suggest that the tech company will cut its spending on AWS by as much as half to finance the new deal with Google, which is estimated to worth between $400 million and $600 million, as reported by Business Insider.

Wall Street has expressed its skepticism regarding the company's decision. According to Yahoo Finance, Deutsche Bank believes the reality of the deal between the two companies is not quite as momentous as it appears, as many overstated the size and significance of the deal. It's likely that Apple is just trying other services to reduce the risk of relying on just one platform.

The bank also noted how signing up a tech giant like Apple as a customer "would be a huge shift away from the typically smaller deals Google's Cloud Platform has been signing so far". As the report from Deutsche Bank revealed, "Some of our industry checks argued that Google is better-positioned downstream in the SMB segment, a view supported by our own Google Cloud Platform customer checks. We didn't come across many customers that had 'lifted-and-shifted' their existing IT workloads into GCP."

The Wall Street Journal reported that Apple has been using Amazon's cloud computing service AWS to store its iCloud data since 2012. Apple is one of Amazon's biggest customer as the tech company is reported to spend nearly $1 billion annually on the service. But the figure would be cut in half as much and allocated for Google's Cloud Platform service, which began within the past two months.

Reports show that Google has less than 5 percent of the cloud computing market. However, its cloud business more than doubled last year. Amazon, on the other hand, has led the market for the past decade as the company commands a roughly 30 percent share. Other prominent players on the market includes Microsoft and International Business Machines Corp.

While Apple's decision to move some of its data to Google Cloud Platform is a big shift, Wall Street believes that the hype around it is overrated as the implications would not be so significant. Deutsche Bank believes that Apple is just trying to reduce its reliance on just one service and is trying other platforms.

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