2 min read.Updated: 10 Oct 2018, 06:02 PM ISTBloomberg
Amazon Web Services signed new deals with customers SAP SE and Symantec Corp. worth a combined $1 billion, with each worth $500 million over 5 years
Amazon Web Services, the cloud-computing division of Amazon.com Inc., signed new deals with customers SAP SE and Symantec Corp. worth a combined $1 billion, according to an internal memo, underscoring the company’s growing momentum in the market for internet-based computing power and storage.
The contracts are each worth $500 million over 5 years, the text of an Amazon email from September showed. Both transactions represented expansions of existing partnerships. Microsoft Corp., the No. 2 cloud-services provider, had also competed for the Symantec deal, according to the memo.
Some of the world’s largest technology companies have been duking it out for supremacy in the cloud. AWS, Microsoft and Alphabet Inc.’s Google have all tried to woo organizations and companies by touting the capabilities and performance of their services, which help organizations store and process data remotely, build new applications and adopt new technologies including artificial intelligence. AWS has so far maintained the lead, winning $17.5 billion in sales last year. That’s out of a market estimated to have been worth $30 billion in 2017, and expected to balloon to $83.5 billion by 2021, according to research firm Gartner Inc.
AWS declined to comment.
“SAP announced its multi-cloud strategy more than two years ago," a spokesman for the Walldorf, Germany-based software company said in a statement, referring to SAP’s plan 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.’s cloud. “We believe in the power of collaboration." SAP declined to comment on the Amazon agreement outlined in the memo.
“We do not disclose details of the agreements underlying our relationships," Symantec Chief Information Officer Sheila Jordan said in a statement. “As our cloud business has evolved, we have continuously evaluated our business relationships with our cloud partners." Symantec is committed to a multi-partner cloud strategy and works with partners including AWS, Azure, Oracle and other global and regional suppliers, she added.
The annual haul from the two deals—$200 million per year—is a little less than 1 percent of annualized revenue for AWS. The unit notched sales of $11.5 billion for the six months that ended June 30, according to a regulatory filing. Amazon shares were little changed in early trading Wednesday and are up 60% this year. SAP slipped 2.1% bringing gains this year to 8.9%. Symantec, which is down 29% this year, was also little changed.
AWS has been focusing on maintaining its sales leadership in the face of growing traction from its rivals. While SAP has spent more money with Microsoft and Google over the past 12 months, “our SAP internal share of wallet stays pretty stable at 70%," according to the text of the AWS memo. The new deal is for the base layer of computing and storage services, as well as other tools for data management, AI and the internet of things.
The Symantec deal represented an increase of more than seven times in the cybersecurity company’s spending on AWS, meaning that it “has been able to capture more than 80%" of Symantec’s cloud spending, according to the document. Symantec will migrate its Managed Security Service, Network Protection and Website Security Service products to AWS in the next 18 to 24 months, the memo showed.
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