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February 16, 2016updated 04 Sep 2016 10:12pm

Apple’s data centre plans – analysts say it may move out of AWS facilities as Irish locals object to new £600m building

Analysis: Company is increasing capital investment by 30% this year .

By Joao Lima

As analysts predict Apple cloud possibly drop out of Amazon’s AWS data centres by moving a substantial amount of its IT infrastructure to its own hubs, the company has faced a delay on its €850 million Irish data centre after locals questioned its environmental impact. See related story.

Residents in Athenry, Galway, have made a formal complaint to the Irish Government expressing environmental concerns related to the construction of the 263,000 sq ft hub.

According to the filed complaint, locals complained about the increased traffic and noise during the hub’s construction. They are also worried about local protected wildlife, such as bats and badgers in the Derrydonnell Forest, next to the planned project.

The complaint was filled to the An Bord Pleanála, the body responsible for appeals under the Planning and Development Acts for strategic infrastructure development.

A local councillor told said a final decision will not be made until the summer, delaying Apple’s plans.

Apple filed a planning permission to Galway’s City Council to build a data centre in Athenry in April 2015 which was granted in September.

The company is looking at renewable energy to power the hub and said the investment to power the facility could reach more than €400 million. The hub will require capacity estimated at more than 300MW.

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The data centre is going to be used to store Europeans’ data and help the Cupertino based company boost up its online services such as iMessage, Maps, Siri, iTunes.

Meanwhile as Apple plans a global investment in data centres worth up to $3.9 billion, analysts have suggested that the Cupertino based firm could be moving a substantial part of its IT infrastructure out of AWS’s data centres.

Morgan Stanley‘s analysts Katy Hubert and Brian Nowak estimate Apple is building approximately 2.5mn square feet of data centres to power iCloud storage, iTunes, App Store and other services, nearly 40% of AWS’s 6.7mn square feet in data centre capacity at the end of 2015.

The analysts spoke out in a video following Apple’s earning call last week with the firm’s executives. Huberty said: "We have picked up that Apple plans to move some of its services out of AWS back to their own data centres."

Apple recently announced plans to open three data centres in Arizona, US (2016), Galway, Ireland and Denmark both in 2017, with a total investment topping $3.9 billion.

Currently it owns four sites, one in Newark, California (opened in 2006), one in Maiden, North Carolina (2010), one in Prineville, Oregon (2013) and one in Reno, Nevada (2013).

She said: "[With the three data centres set to open] it is our understanding that this is part of Apple’s strategy to move off AWS."

The analysts also estimated that Apple’s overall spend on AWS is set to be $1,054 million this year, and $1,178 during 2017.

Nowak said: "We think this [move away from AWS] will happen over the next two years or so."

On its calendar 1Q:16 earnings conference call, Apple called out data centre expenditures as one of the main drivers of its expected 2016 capex growth (+30% y/y).

Apple posted its financial results for its fiscal 2016 first quarter ended December 26, 2015 on January 26. Revenues increase to $75.9 billion from $74.6 billion the same quarter the previous year, and net income grew to $18.4 billion, from $18 billion.

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