Snap seems to have set its mind upon ensuring that it never runs out of space on the clouds. The company has already committed $2 Billion for the Google Cloud Infrastructure and as an amended filing reveals, it is spending a further $1 billion on Amazon’s cloud services.
However, the company also said that it is not averse to building its own infrastructure in the future — which, judging by the company’s apparent estimations for the amount of space it is going to need, might just be the wiser course of action to take. The information comes from an amendment to Snap’s market filing associated with its upcoming public debut. The debut is expected to have a value somewhere between $20 to $25 Billion.
While Snap is likely to rely more heavily on Google’s infrastructure for fulfilling its needs, it also has an agreement with Amazon wherein it will be spending around $50 million this year. The spending will progressively increase until it reaches a $350 million sum in 2021.
The arrangement appears to be one of convenience. According to Snap:
Our agreement with Google requires requires that we use their cloud services for substantially all of our hosting requirements.
However, bringing Amazon on board will ensure that the company would be saved from any harm to its business incurred by a disruption to Google Cloud services. Such disruption could be brought on by technical errors or something else.
Snap also commented upon usage trends in different parts of the world. The company said that users out of North America and Europe were more likely to consume content than create it. This could be due to a variety of factors including, as Snap notes in its filing, the lack of a good high-speed cellular connection everywhere. This is something that needs to be corrected as more content usually equates to more activity and greater engagement.
Fewer Snaps and Chats sent means fewer notifications inviting friends back into the application and therefore lower and more sporadic daily use.
Well, Maybe Snap should come out with a lightweight version of its application to cater to its audience. Facebook did so and its optimized “Facebook Lite” app recently crossed a total of 200 million users, generating significant revenue in the process. Then again, doing so could be more difficult for Snap, which has the vast majority of its content in form of images and videos.
