Is Apple Planning To Enter Cloud Computing Space?
Apple plans to focus on streamlining and expanding its software and cloud-based services such as iCloud, Apple Music, News Plus, etc. along with the production of iPhones, iPads, and Macbooks. However, to ensure that these cloud-based services run across Apple’s 1.5 billion active devices efficiently, Apple is reliant on its cloud division as well as on Amazon Web Services (AWS), a subsidiary of Amazon that offers cloud computing solutions. As a matter of fact, CNBC reckoned that Apple pays $30 million monthly to Amazon’s cloud division and is one of the biggest customers of AWS. However, the company has never disclosed if it uses AWS for service offerings other than iCloud. The company also has some of its cloud services on Google Cloud.
Amazon launched AWS and revolutionized how data centers are managed and applications are hosted. With a clear first-mover advantage, AWS holds the topmost rank in the cloud hosting world. Since then, Microsoft Azure and more recently Google Cloud have started to increase their footprint in the cloud computing space. As a matter of fact, AWS crossed the $10 billion quarterly revenue mark in Q1 2020, bringing in revenue of $10.2 billion with a growth rate of 33%. AWS accounted for about 13.5% of Amazon’s total revenue for the quarter, which is on the higher end. Google Cloud, which includes Google Cloud Project (GCP) and G-Suite, generated $2.78 billion in revenue in the first quarter this year, which marked as a 52% increase over the same quarter a year ago. With the new numbers, Google is on pace for a run rate of $10 billion in annual revenue this year. Microsoft does not reveal Azure revenue but it announced that its Azure revenue grew by 59% in Q1 2020 over the same quarter a year ago.
Apparently, Apple understands the importance of a top-class cloud infrastructure needed for offering seamless customer experience for its products. Like other tech giants, Apple also has its own cloud computing team called the Apple Cloud Infrastructure (ACI) team
that builds and provides systems that fuel Apple’s own services (such as iCloud, iTunes, Siri, Maps).
How Amazon Launched AWS?
Amazon launched Amazon Web Services in 2006. But it was a journey that began in 2000. Amazon started in 1994 as an online bookstore. With its hyper-growth, the company needed to scale efficiently without any internal system failures. In 2000, Amazon started building an e-commerce service offering called Merchant.com that enabled third-party merchants to build their online stores on top of Amazon’s e-commerce platform. The e-commerce giant planned to build a centralized platform that could be used by third parties but it turned out to be a mess. Amazon realized that they had created an unorganized development ecosystem due to which it was impossible to segregate services required to build the centralized development interface. So, the first step in building AWS was untangling the havoc into well-structured APIs. The company thereafter adopted more organized and optimized development tools internally.
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Andy Jassy, AWS’s CEO and then Amazon’s chief of staff, while finding out the reasons for slow application development despite increasing resources found out that the developers were spending the majority of their time setting up the same infrastructure for every single application. So, he started to create fundamental services that could be reused for every application without creating it from scratch every single time.
In 2003, as an exercise, the team identified its core competencies other than fulfilling and shipping orders. As time went by, Amazon engineers became more skilled at writing organized codes and managing optimized compute, storage, and database. Unknowingly the team was already on the path of creating one of the most powerful cloud solutions. Finally, they discovered that they were building services that could run the internet operating system. It turned out to be a more extensive mission that was launched after 3 years in 2006 as Amazon Elastic Compute Cloud. No matter how hard it was to land the first client, AWS had done the groundwork for cloud computing, long before Microsoft and Google.