What does Apple Really Plan to do with its $1B Data Center?

Earlier today, Toni Sacconaghi from Bernstein Research published a note about Apple’s cloud services plans, and more specifically, about what the Apple data center in North Carolina has been built for. The facility, which is by far one of the largest of its kind, cost Apple almost $1 billion in 2010 alone, and could cost even more in 2011, a sign that Apple is expecting massive computing needs, for a slew of new services to be introduced over the year. According to Sacconaghi, the data center could be used for any, or a combination of the following services. Digital Locker / Synchronization Apple already offers basic synchronization services via MobileMe, but MobileMe’s capabilities are fairly limited, as for instance, they do not allow cross-device synchronization, and users cannot use MobileMe to store anything else but basic data, such as contact information. Apple has been working on fixing MobileMe’s shortcomings for a while, and will launch a new version of the service next month, which will include a much broader feature-set, such as cloud-based file storage capabilities, and cross-device synchronization. Most importantly, the service is expected to be offered free of charge to the dozens of millions of iOS-powered devices owners across the globe. iTunes / iAd backend The facility could be used as a backend for both iTunes and iAd. In 2010, the App Store served its ten billionth app, and the number of apps downloaded every single day is growing exponentially. The same goes for iTunes music services, which enjoyed tremendous growth over the last couple of years. The facility could become Apple’s master repository for content, designed to seed its content delivery network. As for iAd, multimedia ads, and apps-based ads are poised to grow over the next couple of months, a growth that requires a significant backend system, able to compete with major advertisers such as Google. Navigation services Google and Apple used to be very close partners, but since the introduction of Android-powered devices, the relationship between the two companies has gone sour. As a result, most Google-powered iOS apps offer less capabilities than their Android counterparts – for instance, the Android Maps app offers advanced features such as turn-by-turn navigation, while the same app on iOS ‘only’ offers basic map services. Apple could soon offer its very own navigation service, meant to replace the Google-powered Maps app that comes with iOS by default. On-demand videos, a la Netflix Apple has been fairly successful at selling movies and TV shows via iTunes, but when compared to services like Netflix, iTunes is lagging – for instance, the overwhelming success of the Netflix streaming apps helped Netflix sign up an additional 20 million customers in a matter of month. Apple may be gearing up for a large-scale subscription-based service, to allow users to stream and iTunes videos to their Apple TV, iPhone, iPad or iPod touch. [ via bernstein research / forbes ]