Snap Inc.’s Amended IPO Reveals Multi-Pronged Public Cloud Strategy Featuring $1B Agreement with AWS in Addition to $2B for Google Cloud

Subsequent to its original IPO filing on February 1, Snap Inc. has disclosed an agreement with Amazon Web Services to spend a total of a $1B on AWS cloud services between January 2017 and December 2021 courtesy of an amendment to its original IPO filing. Under the terms of the agreement, Snap Inc. plans to spend $50M in 2017, $125M in 2018, $200M in 2019, $275M in 2020 and $350M in 2021. News of Snap Inc.’s agreement with AWS reveals its two pronged strategy with respect to public cloud providers given last week’s enumeration of its contract with Google for $2B in cloud services over the course of five years. Snap will use AWS for “redundant infrastructure support of our business operations” in a move that illustrates the strategic importance of a multi-cloud strategy for enterprises, particularly given corporate and investor concerns about vendor lock-in and availability. Snap Inc. is a camera company and parent of the popular messaging application Snapchat. Snap Inc.’s amended IPO underscores both the incipient success of Google Cloud’s strategy to court enterprise customers under the leadership of Diane Greene as well as the continued popularity of AWS within the enterprise in the face of intensified public cloud competition from Microsoft Azure, Google, IBM and Oracle.

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