Snap Inc. just modified a previously signed enterprise agreement with Amazon Web Services, committing to spend $1 billion on AWS services between Jan. 2017 and Dec. 2021, according to an amended filing submitted to the Securities and Exchange Commission.
The original agreement between Snap and AWS was signed in March 2016. The amendment continues the agreement indefinitely until terminated by either party, and clarifies the timeline.
Last week, the social media's filings showed Snap signed a new Google Cloud Platform License Agreement, committing to spend $2 billion over the same timeframe. Snap says Google is its primary provider but that the AWS services will provide redundant infrastructure support of their business operations.
Unreliable services can be the kiss of death for internet-based companies. That's why Snap is putting huge sums of money behind two leading cloud providers.
While a complete services failure is unlikely, Snap isn’t taking any chances because it relies on third-party infrastructure to run and scale its services. Both the AWS and the Google filings mentioned that the company has not ruled out building its own infrastructure at some point, however.
Snap is reportedly preparing for an IPO, hence the SEC filings and the emphasis on service agreements and redundancy measures.