Why Facebook Is Withdrawing WhatsApp from the IBM Cloud – Market Realist

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Facebook (FB) is pulling itsWhatsApp hosting from IBM (IBM) Cloud to its own data centers, according to a recent CNBC report.WhatsApp has been hosted on IBM Cloud for yearsbefore it was acquired by Facebook in 2014. Withdrawing WhatsApp from IBMs cloud is viewed as part of Facebooks search for operating synergies.

Facebook has developed more efficient server technology under its OCP (Open Compute Project), which is saving it a significant amount of money in its data center operations. Facebook disclosed in 2015 that it had saved more than $2.0 billion in costs from OCP in the previous three years.

By bringing WhatsApp to its data centers, Facebook would eliminate its expenses for hosting the app on IBM Cloud.

Pulling WhatsApp from a third-party cloud wouldnt be a surprising move, as the company has done this with other apps it has acquired. For example, by the time Facebook acquired WhatsApp, it was already in the process of migrating Instagrams hosting from Amazon Web Services (AMZN) to its own data centers.

WhatsApp has garnered 1.2 billion monthly active users, similar to the user base of Facebooks Messenger and higher than the 700.0 million Instagram users. The flagship Facebook app has nearly 2.0 billion monthly subscribers, as shown in the chart above.

WhatsApp is said to be one of IBMs large cloud customers. Moving it away from IBM Cloud could be viewed as a setback for Big Blue in its competition with Amazon, Microsoft (MSFT), and Alphabets (GOOGL) Google for control of the cloud computing market.

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Why Facebook Is Withdrawing WhatsApp from the IBM Cloud – Market Realist

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