The search giant has won over some big names recently, which could give it a nice boost in the cloud wars.
Apple (AAPL - Get Report) is reportedly moving some of its data from Amazon Web Services onto Google's cloud, according to tech news sites CRN and Re/Code. Google executives have told partners Apple is spending between $400 million and $600 million on Google Cloud Platform, according to CRN sources. The sources weren't sure if this figure represented an annual amount or not.
According to Morgan Stanley, Apple spends about $1 billion a year on AWS.
The shift is a huge win for Google's cloud division, which brought in $300 million in revenue for the the fourth quarter of 2015, according to Synergy Research. By comparison, Amazon's cloud services brought in $2.4 billion in revenue in the fourth quarter of 2015.
"The impact is on Google and it is incredibly positive and makes the numbers go even higher for Alphabet and we reiterate our buy from AAPlus," said Jim Cramer, portfolio manager of the Action Alerts PLUS Charitable Trust Portfolio.
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However, as Re/Code's Mark Bergen noted, it appears that Apple is working on creating its own cloud platform, spending $3.9 billion to build new data centers in Arizona, Ireland, and Denmark. So the win could be short-lived for Google.
The Apple win follows another win for Google's cloud business in February when it acquired Spotify as a client. Spotify had previously been an AWS client, and while some of its data will remain with Amazon, the announcement was still good news for Google.
Whether or not Apple stays on with Google for a long period of time, the fact that it gets to boast these big names as customers could help Google with client acquisition.
"Like Amazon and Microsoft last year, we think the [Google Cloud Platform (GCP)] narrative is continuing to build, especially with the recent Spotify win. If Google Cloud maintains this momentum, which may become more clear at GCP Next March 23-24 [Google's cloud conference], we could see Google's multiple expand," Pacific Crest analyst Evan Wilson wrote in a note on Thursday. "We believe this [Apple] win helps Google Cloud Platform catch up to Amazon and Microsoft, at least in terms of perception, as a real third player in the space instead of a distant
Nonetheless, Google has a long way to go if it wants to seriously compete against Amazon.
As of the third quarter in 2015, Amazon held a market share of 36.9% of the cloud computing market, according to Goldman Sachs, while Google had under 3%. Microsoft and Salesforce had 8.7% and 4.7% market share, respectively.
According to Gartner, AWS has more cloud capacity in use than its next 14 competitors combined.
Just yesterday, Amazon announced that it had added more than 1,000 databases from 100 clients since the beginning of the year, thanks to its easy migration tools.
"While the cloud database battle is still very nascent, it is becoming increasingly clear that AWS has its sights set squarely on disrupting the $34 billion annual spend on relational databases," Pacific Crest analyst Brent Bracelin wrote in a note on Thursday.