Dive Brief:
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Facebook plans to move its WhatsApp messaging service off IBM’s cloud onto Facebook’s own data centers, according to CNBC, citing a person familiar with the matter. WhatsApp is currently used by more than 1 billion people.
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WhatsApp runs on more than 700 high-end IBM SoftLayer servers, making it one of IBM’s biggest cloud customers.
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Sources told CNBC the move could begin later this year. At one point Facebook was spending nearly $2 million per month on the IBM cloud, another source told CNBC.
Dive Insight:
Losing one of its biggest customers will hurt. IBM’s cloud service currently ranks fourth behind AWS, Microsoft and Google, according to Synergy Research. And data released last month from Canalys indicates cloud growth for IBM is already waning. Canalys found IBM cloud grew just 38% in Q1 2017, compared with Microsoft’s 93% growth and Google’s 74% growth.
But while losing WhatsApp is bad news for IBM, it’s not necessarily a statement about the service. WhatsApp is actually the exception in many ways. Facebook started building its own data centers in 2010, and has been migrating other services, including Instagram, to its own servers over the last several years, according to the report. WhatsApp has actually remained running on IBM for much longer than other services Facebook has purchased in recent year.
Facebook isn’t the only company making this type of move. As companies grow and mature, many find bringing their services back in house can improve efficiencies and save money. Dropbox made a similar move away from AWS last year. With 500 million users globally, Dropbox said it had reached the point where it made more sense to build its own private cloud.
