Dive Brief:
- A Morgan Stanley analyst thinks that Amazon Web Services may eventually lose Apple as a client
- The analyst, Brian Nowak, said that Apple is working to build 2.5. million square feet worth of data centers to house the company's offerings, like iCloud storage and iTunes, GeekWire reported.
- If Apple leaves AWS, it would reportedly take about 10% of the company's profits with it, worth about $10 million.
Dive Insight:
Apple already has plans underway to build data centers in Arizona, Ireland and Denmark. The company is also planning for a future in which even more of its customers will use Apple Music, download apps from the App Store and query Siri, all of which require data centers.
Last week, Apple reported that it will have to spend about 30% more on data centers, offering further incentive for it to move away from using another company's data storage services. The space Apple is building is about 40% of AWS' total data center capacity.
If AWS were to lose Apple, it would still have clients like Netflix and Airbnb to rely on, GeekWire reported. The company is also working to diversify its offerings, including allowing for future IoT integration.
Last quarter, AWS sales were up 69 percent year over year and generated $2.4 billion in one quarter alone.
