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October 7, 2016

Apple plans cloud unification to challenge Google

Company is hoping that it will be able to speed up the development of services.

By James Nunns

Apple is making plans to improve its cloud services by unifying its separate internet services groups.

The hope is that by merging its groups that it will be able to better compete with the likes of Google Cloud, Amazon Web Services and Microsoft Azure.

Currently the company’s cloud services teams include Siri, Maps, iCloud, Apple Pay, Apple News, and parts of iTunes and Apple Music. According to Bloomberg the company will move all of these into the company’s Infinite Loop campus in California.

The current set up is that these services are all developed separately in various parts of Cupertino and Sunnyvale in California.

This setup is said to contribute to software bugs and slow product development, according to sources. So if the teams were to be brought together then it could help to improve the growth of its services business.

The futuristic Apple Campus 2.

The futuristic Apple Campus 2.

 

The move would make sense for Apple, which has had somewhat of an underwhelming cloud service and now faces increased pressure from the likes of Google on the hardware front with the Pixel phone, and the company’s Google Cloud offering.

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Slowing sales of the iPhone could force Apple to look elsewhere for revenue growth, that area could be the services business. In the company’s last financial results it reported that this area of its business grew almost 20% in the third quarter, closing in on Mac and iPads as its second largest revenue source.

A re-housing of the company’s teams to be closer to each other could coincide with the launch of the Apple Campus 2, a newly built futuristic building that will start housing employees in 2017.

Although it will be looking to continue to grow its services business, it is unlikely that it will be competing in the B2B space with the likes of AWS, or Microsoft Azure. The likely competition it will find will be in the commercial cloud business for app developers for the App Store and in the music streaming space.

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