Verizon once had big plans to compete with Amazon’s cloud juggernaut — now it’s a big Amazon cloud customer (VZ, AMZN)


On Tuesday, Amazon announced that Verizon was going to vastly increase its usage of Amazon’s cloud. Verizon had been an under-the-radar customer of Amazon Web Services since 2015, but it is now going to move 1,000 of its applications into Amazon’s cloud in a very public way.

It is also going to be a user of Amazon’s database, Aurora.

All of this is significant for a number of reasons.

For one, it marks how Amazon has taken yet another would-be competitor and brought them into its own orbit. Verizon once had ambitions to be a public cloud provider that competed with Amazon. In 2011, Verizon spent $1.4 billion to buy cloud data center provider Terremark. At the time, the cloud market was young, and every big tech company was scrambling to nab their piece of it.

It didn’t really work out. In 2015, Verizon started using Amazon Web Services to power some of its own software. A year later, as Amazon’s dominance rose, Verizon’s in-house cloud ambitions faded. Verizon quietly closed its cloud unit. Last year, it sold its data centers to Equinix for $3.6 billion, and sold the remnants of its cloud business to IBM, with terms undisclosed.

So becoming a “preferred cloud vendor” for Verizon is a definitely feather in Amazon’s cap.

And the announcement that Verizon will use the Amazon Aurora database is significant because it gives Amazon another huge, marquee customer for its fast-growing Oracle competitor.

And the list of Aurora is starting to get long and significant. AWS CEO Andy Jassy says that Aurora is the fastest growing service in Amazon’s history, with “tens of thousands” of customers using it and it grew at about 250% last year. Big-name Aurora customers include ADP, Autodesk and Choice Hotels. Verizon is a standout addition, nonetheless.

It isn’t clear which type of databases Verizon is moving to AWS Aurora. Back in 2015, Verizon famously had issues with a MongoDB database when a hacker claimed to have stolen the customer data out of it, and was offering to sell that data for $100,000.

Other companies who couldn’t beat the mighty AWS and later opted to join it, (albeit as partners, not customers), include VMware and Rackspace.

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