Google Cloud Platform

Deutsche Bank Weighs In On Apple’s Google Cloud Deal

March 22, 2016 - Written By Daniel Fuller

Apple recently announced that they were moving away from Amazon Web Services, the giant in the infrastructure as a service space, and signing on with Google Cloud Services. The deal was a bit unexpected, given Apple and Google’s fairly public rivalry in the mobile space and Google’s underdog status in the cloud services sphere. Said to be worth between 400 million and 600 million, the huge deal was set to throw Google Cloud Services headlong into the big leagues. According to some independent analysis by Deutsche Bank, however, there is reason to doubt that this deal will put a significant debt in the current status quo of the infrastructure as a service field.

In a note to their investors on Monday, Deutsche Bank argued that “…the media is likely misrepresenting what has actually happened and that the dollar amounts being thrown around… are ‘absurd’.” The numbers they were referencing, specifically, were the figures above for Apple’s deal with Google, as opposed to the roughly $1 billion they’ve spent with Amazon Web Services. According to Deutsche Bank, this eclipses the nearly $400 million that Google Cloud Services brings in within the course of a given fiscal year. Additionally, Apple moving most of their cloud and I.T. backend to Google’s servers would mark a huge departure from business as usual for Google’s cloud platform, which normally draws in smaller businesses and niche ventures from bigger names. Speculation is apparently running wild that Google may announce a price cut for their services at the upcoming NEXT conference, which would give the impression of trying to spark a price war with the otherwise high-margin Amazon Web Services.

The implications of the deal, in any case, seem to be a move into the larger section of the market for Google’s cloud segment. Historically, Google Cloud Services hasn’t quite had what it takes to beat Amazon Web Services or even Microsoft’s second-place Azure cloud platform at their own game. Google’s suite of intricate, developer-focused tools give them an advantage over most others in the business, meaning that if the rumors are true and their gambit pays off, all-out war could break out in the top of the space. As with any other competition in the business world, of course, consumers will be the winners no matter who comes out on top.