Slack to Spend at Least $250 Million on Amazon Web Services over Five Years — Less than Pinterest or Lyft
Slack said on Friday that it has a hefty commitment to spend money with Amazon Web Services through 2023, though it’s not as big of a customer as other companies to recently go public, such as Lyft and Pinterest.
In 2018, Slack signed an agreement with AWS to spend at least $50 million a year over five years, for a total of at least $250 million, according to the company’s filing with the SEC for a public stock listing. As of Jan. 31, the contract has a remaining minimum payment of $212.5 million. Slack said it uses AWS, the leading public cloud vendor, “as our processing and delivery infrastructure.”
Amazon, which said Thursday that revenue at AWS surged 41% in the first quarter to $7.7 billion and accounted for about half of the company’s total operating profit, doesn’t provide specific details on how much it gets from top customers. But more of that information has been coming out as companies that grew up on AWS go public and disclose their financials for the first time.
Ride-hailing company Lyft said in its prospectus that it’s committed to spending at least $300 million on AWS over three years — from the beginning of 2019 through 2021. Pinterest said last month that it will spend at least $750 million on AWS over the course of a six-year period that ends in July 2023.
While AWS accounts for a significant expense for each of those companies, none of them are spending nearly as much as Apple. CNBC reported this week that Apple is shelling out more than $30 million a month, or over $360 million a year, with Amazon to reliably deliver iCloud and other services to consumers.
Slack’s minimum AWS spending is equivalent to 12% of annual revenue and about 10% of its operating expense for the year ended Jan. 31, 2019. Slack said sales jumped 82% for the year to $400.6 million, and it reported a net loss of $138.9 million.
Uber updated its IPO prospectus on Friday, but the company doesn’t break out its cloud costs. Uber says it uses a “combination of third-party computing services and co-located data centers in the United States and abroad.” In 2017, AWS highlighted Uber as a customer on its blog and said the ride-hailing company uses the service to handle all the ride requests that come through on major holidays.
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