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Verizon's Oath is 'doubling down' on Amazon's cloud

  • AOL, which is under the Oath group, already uses Amazon Web Services.
  • Oath also uses certain cloud services from Google and Microsoft.
Tim Armstrong
Cameron Costa | CNBC
Tim Armstrong

When Verizon's Oath division was looking to consolidate its Yahoo, AOL and other brands into the public cloud, Amazon Web Services emerged as the obvious choice, in part because that's where start-ups house their data. And Oath plans to do deals.

"It's highly unlikely that the start-up system runs in our private cloud or on-premises when we buy them," Atte Lahtiranta, Oath's chief technology officer, told CNBC in an interview. "We did a lot of due diligence. AWS is just — they are really good."

Oath announced Tuesday that it chose AWS as its "preferred" public cloud provider. The company will move existing programs to the Amazon cloud and develop new applications there. Oath currently operates around 10 large data centers in the U.S. and abroad, and this multiyear deal will enable it to close some smaller locations, Lahtiranta said.

Lahtiranta highlighted several AWS services that are interesting to Oath, including the Aurora database and the Lambda "serverless" computing tool.

Oath is the latest tech and media company to align itself primarily with Amazon, which leads the public cloud market. Comcast (owner of NBC, parent of CNBC), Turner and Walt Disney have all made the same choice in recent months. Oath and AWS declined to provide financial terms of their agreement.

As an internet conglomerate with a bunch of legacy assets, Oath's data has been all over the place. For years Yahoo has relied on private data centers for its computing needs, while AOL was quicker to adopt the public cloud, Lahtiranta said. Today Aol.com, the Huffington Post and Tumblr use AWS, as do parts of Oath's programmatic advertising businesses.

Verizon acquired AOL in 2015 and Yahoo's operating business last year. After the Yahoo deal, Oath became the parent for those two brands as a subsidiary of Verizon.

"When the two companies came together, Yahoo was figuring out what to do," said Lahtiranta, who spent nine years at Nokia before joining Yahoo in 2013. Ultimately, he said, the decision was to "double down more" on the public cloud.

Still, Oath isn't going all-in with AWS. The company uses some public cloud services from Google and Microsoft, AWS' top competitors. And some executives see various tasks best suited for the company's own servers. Lahtiranta said there's no guarantee that Oath will give up on running its own infrastructure.

"Right this moment, I don't see it as strategically or economically 100 percent possible in the very short term, let's say, a few years," he said.

AWS controls one-third of the cloud infrastructure services market, according to Synergy Research Group.

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