Apple said to move part of cloud business from AWS to Google

The move comes even as the company is building its own new data centers, leading to speculation whether the shift is only temporary.

Google is a rival of Apple in smartphones and other devices, but such deals are common among tech companies in areas that they don’t compete. 

After signing the deal with Google late last year, Apple has significantly reduced its reliance on AWS, whose infrastructure it has been using to run parts of iCloud and other services, reported CRN, quoting sources with knowledge of the matter. The publication put Apple’s spending with Google at between US$400 and $600 million, though it added it wasn't clear whether the figures referred to an annual spending rate or a set amount of capacity.

Google, AWS and Apple could not be immediately reached for comment.

Apple is setting up a data "command center" in Mesa, Arizona. It also plans to have  data centers in Ireland and Denmark that are expected to go into operation in 2017, and will power Apple’s online services including the iTunes Store, App Store, iMessage, Maps and Siri for customers across Europe.

Last month, Morgan Stanley analysts Katy Huberty and Brian Nowak said that the new data center rollout suggested that Apple planned to move in-house some of the cloud services business that currently goes to AWS. The Morgan Stanley analysts estimated that Apple spends over US$1 billion annually on AWS services, assuming that 90 percent of its cloud business goes to the Amazon.com unit.

It is not clear though whether the business Apple is shifting from AWS to Google is in addition to the business it plans to move in-house.

News site Re/code added a new twist to Apple's strategy on data centers, claiming that Apple has set up a team, called McQueen, with the aim of breaking its reliance on outside cloud providers, while it focuses on building its own infrastructure. The thinking within the company is that instead of paying charges to the cloud providers, Apple can break even with its own data centers in about three years, Re/code said quoting sources familiar withe matter.

Apple is also known to also use services from Microsoft Azure. For Google, the Apple business could help as it competes with leading players like AWS and Microsoft Azure in the cloud business.