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.
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.
