Apple Inc. is assembling a high-speed network and upgrading how it builds data centers, a push to be more competitive with Amazon.com Inc., Google Inc. and Microsoft Corp. in cloud services, people familiar with the plans said. Up to now, Apple has relied mostly on traditional network providers and technology suppliers to support consumer services such as iTunes for music and movies, iCloud for storing photos and other content and the Siri voice-activated assistant. Apple will stick with most of its existing vendors, and is mainly seeking to bolster its current infrastructure.
Apple is planning to introduce a streaming-music service at its developer conference in San Francisco on Monday, with TV possibly following later in the year. It will need more efficient, faster infrastructure to ensure glitch-free delivery, people with knowledge of the matter have said. “User experience is very important to Apple, but delivery of its content is the one part of that experience it doesn’t control,” said Andrew Schmitt, an analyst at IHS Infonetics Research. “If they want to control and maximize that user experience, they’re going to have to control that last piece.”
Apple’s push to build a stronger cloud infrastructure combines two initiatives: Building out a faster network and upgrading data centers. While Apple hasn’t disclosed total costs, investments will run into the billions. Apple put $1 billion into data centers last year, according to Analysys, which pegged it as the seventh-largest cloud infrastructure spender in 2014.
Josh Rosenstock, a spokesman at Apple, declined to comment.
Apple wants to own pipes linking its four large U.S. data centers and Internet hubs in certain cities to ensure fast, reliable delivery of content and services. By adding capacity and increasing efficiency, it seeks to handle more traffic on its own, without renting as much server space from cloud providers such as Amazon and Microsoft, said people with knowledge of the plan, who asked not to be identified because Apple isn’t discussing the moves publicly. They declined to name the cities involved.
The effort includes long-haul pipes connecting Apple’s data centers in California, Nevada, North Carolina and Oregon, and others to get content closer to Internet hubs in some densely populated markets, said three of the people. From there, content would be delivered to consumers via broadband connections and cell towers owned by cable and phone companies. Rather than buy off-the-shelf technology, the company has been working on ways to send data via fiber lines at hundreds of gigabits per second, according to one of the people.
“Apple has slowly built out its data centers in the past five years,” said Tavis McCourt, an analyst at Raymond James Financial Inc. “As they serve up more things from the cloud to more and more customers, they’re going to need to scale up.”
In recent years, Google, Amazon, Microsoft and Facebook Inc. have spent billions of dollars to come up with new ways to build servers and craft data centers — the warehouses full of high-powered computers that store and dish out data to personal computers and mobile devices. They have designed their own servers and other gear to squeeze out efficiency gains. Some have also leased dark fiber-optic lines that only they can use. “All of these cloud giants want to be the platform on which you run your digital life,” said Frank Frankovsky, a former Facebook executive.