MIS4596-Tony Messina-Sec 002-Spring 2017

Snap Spends $1 Billion on Amazon Cloud Services

Snap Inc is expected to spend $1 billion over the next five years to use Amazon Inc’s cloud services. Snap will stay in their $2 billion contract with Google to use their cloud services. Snap has been using Google Cloud to host the majority of its computing, storage, and bandwidth. The deal they made with Amazon involves Snap’s plan to improve its customer’s experience outside North America and Europe. The regions outside these two areas tend to have slower and more expensive cellular networks making it harder to connect with consumers. Consumers in these countries tend to be more interested in consuming content rather than creating it. This makes it easier for Snap’s competitors to target them. Snap is hoping this deal with Amazon will help them attract and retain these consumers. It will be interesting to see how this works out for Snap.

  1. How can Amazon Inc.’s cloud services improve Snap’s user experience in the regions outside North America and Europe?
  2. With having contracts with two different organization’s for its cloud services, should Snap consider building its own infrastructure?

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4 Responses to Snap Spends $1 Billion on Amazon Cloud Services

  • 1. I think the onus is Snap to work with Amazon to implement newer technologies that can compress video greatly without degrading the user’s experience. But it all comes down to the cell network. If customers connection is too slow or they are paying too much for data, then Snap’s consumption in that region will be subpar.
    2. Good question. Snap would have to do a cost benefit analysis to see if it’s worth. You have Facebook who uses its own infrastructure for cloud services but then you have Netflix who is 100% reliant on AWS. It all comes down to what Snap path wants to devote its time and resources in.

  • For question two I believe that since Snapchat so large, it would be in their best interest to look into having its own infrastructure. With that being said, that completely depends on how big of an IT group they have and if they have the personnel (or capital) to afford owning their own infrastructure.

  • I don’t think AWS is going to solely help Snap improve the user experience outside NA and EU. With two cloud services, it should help their network, but they need to optimize their app. Snapchat on Android has only recently started to improve its performance (even on high-end devices it was slow and buggy.) Which is important because Android is the most popular OS in these other countries. Improving the app’s performance itself will increase the user experience more at first. Once the app is performing like a high-end app, they can work with AWS and Google to better optimize their network for compressing video and pictures without losing quality.
    At this point I think Snap should continue using Google and AWS together. Perhaps in the future they can move over to just one cloud service, but only if they know it will not degrade their network performance.

  • 1. I do not believe the use of Amazon’s cloud services will help Snap. To improve its user experiences, Snap must improve its compression of the videos in order for faster video transfers. They must also work with cellular companies to improve their bandwidth and internet speeds to improve Snap’s user experience.
    2. Snap should consider doing a cost analysis between using 1 vendor, 2 vendors and having their own infrastructure. I think Snap should continue to outsource to other cloud services because they do no have experience with running their own infrastructure. This running their own systems can lead to many issues because of their lack of expertise and problems that can arise with the implementation of their own systems.

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