Why Apple pays Amazon more than $30 million per month…?
Apple reportedly pays Amazon more $30 million per month to use their services called as Amazon Web Services (AWS), the largest cloud platform in entire world.
why..? I am glad you asked…
Apple previously stated that it uses AWS for iCloud storage, and this iCloud service runs on the AWS platform as many more of their services but apple hasn’t disclosed which other services run on the platform.
so what is AWS and why its so popular that its became the largest cloud platform in entire world.
What is AWS….?
Amazon web service (AWS) is an online platform that provides scalable and cost-effective cloud computing solutions. AWS is a broadly adopted cloud platform that offers several on-demand operations like compute power, database storage, content delivery, etc., to help corporates scale and grow.
AWS launched in 2006 from the internal infrastructure that Amazon.com built to handle its online retail operations. AWS was one of the first companies to introduce a “pay-as-you-go” cloud computing model that scales to provide users with compute, storage or throughput as needed.
Services Provided by AWS-
Amazon Web Services offers a broad set of global cloud-based products including
•compute •storage •databases •analytics •networking •mobile •developer tools •management tools •IoT •security and enterprise applications.
These services help organizations move faster, lower IT costs, and scale. AWS is trusted by the largest enterprises and the hottest start-ups to power a wide variety of workloads including
- web and mobile applications •game development •data processing and warehousing •storage •archive and many other
more than 60 services are provided free foe limited time by AWS
CASE STUDY
How AWS is helping Apple…?
The challenge…
As Apple’s top product, the iPhone, approaches market saturation, the company has begun pointing more to online services as a key contributor. Recently, the company stopped disclosing unit sales for iPhones and other hardware products and started disclosing the profit margin for its services business, which includes the iOS App Store, AppleCare, Apple Pay and iCloud. Apple also introduced new subscription services for video and magazines last month.
So with all these services apple needed a good, reliable, fast cloud storage to provide better experience to their customers.
The solution:
Solution to this problem was simple AWS services. As apple provides 5GB of cloud storage to every customer. People use more than 1 billion Apple devices each month.
So this cloud storage problem is solved by AWS S3 storage which provides very fast, secure with high availability of this service so that Apple customers gets the seamless and premium experience as the iPhone itself
People use more than 1 billion Apple devices each month, The company is investing heavily to build its own infrastructure: In January 2018, Apple announced plans to spend $10 billion on data centers in the U.S. within five years.
In December, Apple said it would spend $4.5 billion of that amount through 2019. The company also depends on smaller third-party cloud providers. But it also relies on the big cloud providers, including Amazon Web Services and Google GCP and Microsoft Azure
The company has said that it uses AWS for iCloud storage but has not disclosed whether any other Apple services use AWS or other third-party clouds.
The Benefits
APPLE Cutting its long-term cloud costs
Because APPLE pays only for the compute power, storage, and other resources (hardware like HDD, RAM, Network Adaptors etc)you use, with no long-term contracts or up-front commitments and maintaining these resources or troubleshooting them .
Cutting cloud costs matters because Apple is expanding its higher-margin services business to reduce its dependence on lower-margin hardware sales. Apple stated that the services unit had an impressive gross margin of 62.8% last quarter, compared to a 34.3% gross margin for its products.
Newer services like Apple News+, Apple TV+, and Apple Arcade could initially be loss leaders due to high content costs. but The Financial Times recently reported that Apple was investing $500 million in Apple Arcade, its subscription-based gaming platform.
These low-margin services could offset higher-margin services like the App Store, so cutting cloud costs by expanding the company’s own infrastructure is a smart long-term strategy.
This is how Apple uses AWS services and manage to reduce the expenditure of managing these services/micro-services by itself
That's it for this article…. Thank you for Reading📖
I Hope, this article helped to know about AWS and its use case.
THANK YOU….!
