Morgan Stanley analyst Brian Nowak opines that Apple may be preparing to decrease its dependence on Amazon Web Services by building new data centers that increase its data center capacity. Citing analyst Katy Huberty, Nowak claims that Apple plans to build approximately 2.5 million in square feet of additional data center capacity, a whopping data center footage area given that the square footage of Amazon Web Services data centers totals 6.7 million square feet. Meanwhile, Oppenheimer analyst Tim Horan argues that Apple is gearing up to launch its own Infrastructure as a Service (IaaS) product offering. Horan notes that Apple has already built its own content delivery network to reduce its dependency on Akamai and that an IaaS product offering potentially offers a gateway for Apple to gain a foothold in the enterprise hardware space. Much of the speculation about Apple’s interest in expanding its own cloud computing, IaaS capabilities relates to Apple’s most recent quarterly earnings report, which features a 30% capex year over year increase for 2016 and commentary from Apple CFO Luca Maestri about the importance of new data centers in this year’s operating plans. Regardless of whether Apple chooses to launch its own IaaS offering or decide instead to expand its internal ability to deploy cloud computing for its corporate products and services, the company stands to gain by reducing its roughly $1 billion annual spend on Amazon Web Services. Apple has the cash and the talent to build out its cloud computing capabilities but it remains to be seen what results from the company’s investment in data centers around the world.
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