Snap opens purse strings for audacious $1bn embrace of Amazon cloud services
Snapchat owner Snap has loosened its purse strings to spend an expected $1bn on Amazon’s cloud services over the coming five years, supplementing its existing $2bn cloud contract with Google.
These mammoth sums have given Snap pause to consider investing in its own proprietary cloud infrastructure, ahead of its looming stock market flotation in March.
The expenditure plans were published just as Snap seeks to raise $3bn from investors, having been valued at up to $25bn ahead of its IPO – making it the largest stock market debut of any US technology giant since Facebook.
Snap is dependent on Google Cloud to provide the majority of computational horsepower required to provide it with the bandwidth, storage and processing needed to provide its services.
Snapchat has built a loyal following of 100m active users, 60% of whom are aged 13-24, based on its premise of sharing images amongst friends which automatically delete within a few seconds.