Apple’s Secret â€œMcQueenâ€ Project Could Cost Amazon Billions – Vanity Fair
Apple, which reportedly spends more than a billion dollars a year to outsource its cloud infrastructure to Amazon, Google, and Microsoft, is working on a secret project to ditch its competitors. The internal initiative, code-named â€œMcQueenâ€â€” yes, like that Steve McQueenâ€”is Appleâ€™s attempt to break its reliance on other cloud providers by creating its own platform, Re/code reports. Sources said Apple could break even on the project within three years, saving costs and avoiding the hassle of having to work with its rivals.
In the interim, Apple appears to be shifting away from its reliance on Amazon Web Services (A.W.S.) and Microsoft Azure, the two companies it was reportedly using for its data storage, by inking a major new agreement with Google. CRN says that Apple has signed a contract and has started storing some of its iCloud data on Googleâ€™s Cloud Platform, spending a reported $400 million to $600 million to do so. The deal is a big win for Google, which doubled down on its enterprise businesses last year by hiring VMware co-founder Diane Greene to run its cloud-computing division. In addition to Apple, Greene has made waves by signing Spotify, helping Google eat into Amazonâ€™s massive share of the $110 billion cloud services industry. (Apple and Google did not respond to requests for comment.)
This isnâ€™t great news for Amazon, with whom Apple may be cutting spending in favor of Google, reports CRN. In a foreboding note published last month predicting that Apple and Amazon would part ways, Morgan Stanley analyst Brian Nowak estimated that Apple spends about $1 billion on A.W.S. services, making up roughly 9 percent of A.W.S.â€™s expected 2016 revenue. However, Apple hasnâ€™t abandoned Amazon entirely. â€œItâ€™s kind of a puzzler to us, because vendors who understand doing business with enterprises respect NDAs [non-disclosure agreements] with their customers and donâ€™t imply competitive defection where it doesnâ€™t exist,â€ an A.W.S. spokesperson told CRN.
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