Apple and Dropbox dump AWS -- should you?

Tech companies have good reason to reassess when and whether they use public clouds, but they're not representative of enterprises' needs

Apple and Dropbox dump AWS -- should you?
flickr/Philip Brewer

Both Apple and Dropbox are moving at least some of their cloud services away from Amazon Web Services' public IaaS cloud. Apple reportedly is moving part of its cloud infrastructure to Google's Cloud Platform, while Dropbox is moving to its internal infrastructure (that is, its own private-cloud data centers).

No one should be surprised, and no one should take this to mean that AWS is in trouble.

Owners who move workloads to a public cloud do so because they want something that's fast to implement and cheap to run. AWS fits the bill nicely for many startups and even for big tech companies seeking to build their own cloud services in third party's public cloud.

But these days, competing public clouds offer the same benefits and can be a better fit for some customers. There are two common reasons for a company to rethink its public cloud provider:

  1. The public cloud might be competing with the company using it. Amazon's cloud-storage offerings compete with both Dropbox's and Apple's, for example, and AWS's parent company,, competes with Apple in music and video streaming. (Amazon even stopped selling streaming media players like the Apple TV and Google Chromecast that compete with its Fire TV.)
  2. The company has reached a point where it makes good economic sense to move off a public cloud and run its workloads on its own infrastructure. As the number and size of your workloads grow, the pricing of the public cloud may exceed the cost of doing it yourself -- Dropbox seems to have come to that conclusion. I expect more companies -- especially those offering online services -- will reach the same conclusion in the coming years.

For some companies, the economics may argue in favor of increasing dependence on public clouds. For example, Netflix recently completed a seven-year migration from its data centers to AWS. Apple also remains a heavy user of cloud services from the three big providers -- AWS, Google, and Microsoft -- even as it continues to build out its data-center capacity.

Also keep in mind that tech providers like Apple, Dropbox, and Netflix aren't typical enterprises. Their technology sourcing decisions may not have much to say about your own.

Enterprises have many complex and very different workloads, whereas cloud service companies do not; they can get a similar economy of scale when doing it themselves that an enterprise, with its disparate needs, cannot. That's why it still makes economic sense for enterprises to move to the public cloud -- and stay there.

AWS's bread-and-butter business comes from large enterprises, and I don't see that changing. The public cloud proposition for those enterprises remains too attractive, and AWS offers the most compelling services lineup for most enterprises. Don't cry for AWS.

Copyright © 2016 IDG Communications, Inc.

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