AWS closes cloud deals totalling $1 billion with SAP and Symantec

Amazon Web Services

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Amazon Web Services (AWS) has won the trust of both SAP and Symantec, signing contracts for cloud computing and storage valued at US$500 million each over the next five years, according to the contents of an internal memo viewed and reported by Bloomberg. Both contracts represent expansions of existing partnerships.

To date, AWS has maintained the number 1 position in the ongoing battle for cloud supremacy, having achieved US$17.5 billion in sales last year. Gartner researchers peg the total value of that market at $30 billion in 2017, rising to US$83.5 billion by 2021. Microsoft, currently the number 2 cloud services provider, had also competed for the Symantec business, according to the memo.

While SAP has increased spending with Microsoft and Google over the past 12 months, the AWS memo disclosed that “our SAP internal share of wallet stays pretty stable at 70 per cent.” The new contract is for the base layer of computing and storage services, as well as other tools for data management, Artificial Intelligence (AI) and the Internet of Things (IoT).

The Symantec contract represents more than a seven-fold increase in the cybersecurity company’s spending with AWS. According to the memo, this means that AWS “has been able to capture more than 80 per cent” of Symantec’s cloud spending. Symantec will migrate its Managed Security Service, Network Protection and Website Security Service products to AWS within 18 to 24 months, according to the memo.

Although not insignificant at $200 million, the annual revenue from the SAP and Symantec deals represents less than 1 per cent of the AWS annualised revenue. AWS reported revenue of $11.5 billion for the six months ending June 30, according to a regulatory filing. Perhaps not surprisingly, the news resulted in little change to the share prices of all three companies. AWS declined to comment on the contents of the memo.

“SAP announced its multi-cloud strategy more than two years ago,” said a spokesman for SAP in a statement. SAP’s plan continues to be to maintain a presence on the world’s largest public clouds, such as AWS, Microsoft, Google, International Business Machines Corp. and Alibaba Group Holding Ltd. The SAP statement reinforced that the company “believes in the power of collaboration”. SAP declined to comment on the AWS agreement outlined in the memo.

“We do not disclose details of the agreements underlying our relationships,” said Sheila Jordan, CIO, Symantec in a statement. “As our cloud business has evolved, we have continuously evaluated our business relationships with our cloud partners.” The statement went on to say that Symantec is committed to a multi-partner cloud strategy and works with multiple partners including AWS, Azure, Oracle and other global and regional suppliers.

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