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Analyst: Apple Could Move from Amazon Web Services in Favor of Its Data Centers

Analyst: Apple Could Move from Amazon Web Services in Favor of Its Data Centers

Morgan Stanley analyst Brian Nowak says he believes Apple is considering backing away from its current reliance on Amazon’s Web Services, in favor of its own in-house data centers. Novak says the move could take up to two years to complete.

Analyst: Apple Could Move from Amazon Web Services in Favor of Its Data Centers
Apple’s Reno Data Center

AppleInsider:

Nowak, who covers Amazon for Morgan Stanley, cites fellow Apple analyst Katy Huberty in a recent note to investors, saying Apple’s capital expenditures outlay suggests a decreased dependence on Amazon’s AWS cloud computing network, reports Barron’s.

“We believe this build is a signal that Apple is increasingly likely to move away from AWS in the next 18-24 months,” Nowak said,

Huberty’s belief comes from data she culled from Apple’s quarterly earnings report, which points to a 30% year-over-year jump in capex growth for 2016. During last week’s Q1 2016 investor conference call, Apple CFO Luca Maestri noted new data centers will play a major factor in this coming year’s growth.

Apple has plans to open three data centers over the next two years, including a $2 billion “global command center” in Mesa, Arizona. Two other data centers, to serve European customers, will be built in Ireland and Denmark at a cost of 1.7 billion euros. Huberty estimates Apple will be building around 2.5 million square-feet of data center space.

An Apple move from AWS to its own home-grown solution could save the company billions of dollars, as Huberty estimates the Cupertino firm spent around $1 billion on data center operations in 2015, which includes payments to Amazon.

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