The News: Last week Amazon Web Services (AWS) announced further investment in the Australian market, building on its announcement in late January around the launch of a second infrastructure region in Australia. See coverage from The Guardian here reporting on this announcement.
AWS Further Invests in the Australian Market
Analyst Take: Amazon Web Services (AWS) is the market leader in public cloud IaaS provision and has operated in the Australian market since 2012. Given the remote location of the Australian market and the laws of physics when it comes to round-trip latency, local Australian cloud customers need a local point of presence from cloud vendors such as AWS so this continued investment doesn’t come as a surprise.
AWS announced plans to invest more than $13 billion in Australia over the next five years. The investment will be used to expand AWS’s cloud computing operations in Melbourne and Sydney and work toward running its data centres entirely on renewable energy. AWS’s cloud operations in Sydney have been in place since 2012, with $9.2 billion spent in the decade since the launch. The expected growth in spending over the next five years accounts for the Melbourne region opening up last month. The investment in the expansion and operation of the two centres is expected to bring in 11,000 full-time-equivalent positions, including direct employees, contractors, and construction, maintenance, engineering, and communications suppliers.
AWS is set to bring similar cloud services to people in Perth, with Brisbane to be announced soon. Australia’s customers include Atlassian, Qantas, NAB, and government agencies, including the Australian Bureau of Statistics, NSW Health Pathology, and the Western Australian Department of Education. Iain Rouse, the Australia and New Zealand country director at AWS Worldwide Public Sector noted that the company had spent $620 million on network infrastructure, such as fiber links, on top of covering a variety of needs of both data centres.
The Australian Prime Minister, Anthony Albanese, unsurprisingly welcomed the investment and noted that “economic and infrastructure investment from cloud providers like AWS helps create jobs, advances digital skills, boosts innovation, and uplifts local communities and businesses.” AWS has offices in Melbourne, Brisbane, Perth, Adelaide, and Canberra and will have a combined AWS and Amazon retail office in Melbourne by late 2023.
In May 2022, AWS announced that its first Australian utility-scale renewable energy projects had begun delivering clean energy to the Australian grid. Amazon, AWS’s parent company, has estimated it will reach 100% renewable energy by 2025. The company has two solar farms in regional New South Wales (NSW) – one in Gunnedah and another in Suntop – generating 392,000MWh of energy each year, making up the 310 renewable energy projects across 19 countries Amazon has. Additionally, a wind farm built in Hawkesdale in regional Victoria will bring in another 717,000MWh when operational, powering Amazon’s operations.
AWS’s investment in Australia reflects the company’s commitment to expanding its cloud computing operations and investing in renewable energy. The investment will create thousands of jobs and positively impact local communities and businesses. The company’s customers in Australia include major corporations and government agencies, highlighting the importance of AWS’s services for businesses operating in Australia.
AWS is also committed to sustainability, with plans to run its data centres entirely on renewable energy. The company has already made significant progress toward this goal, with two solar farms in NSW generating clean energy for the Australian grid. The investment in the wind farm in Hawkesdale will further contribute to the company’s sustainability efforts.
Overall, AWS’s investment in Australia is significant and reflects the company’s commitment to expanding its cloud computing operations, creating jobs, and investing in renewable energy. AWS has also invested in local talent, launching the AWS re/Start program in Australia, which offers free cloud skills training to unemployed or underemployed individuals, helping to develop a skilled workforce for the future. As AWS continues to grow in Australia, it will positively impact local communities and businesses, and help businesses operate more efficiently and sustainably.
Looking Ahead
As the geopolitical landscape continues to fracture and Western-aligned geographies in Asia think about data sovereignty and infrastructure resilience, this type of announcement will become more prevalent. AWS is simply responding to this dynamic and investing ahead. Given the strategic nature of both the Australian and New Zealand markets, I expect to see similar announcements from the likes of Google, Azure, Oracle, and IBM.
In comparison to other cloud providers, Microsoft Azure has also made significant investments in Australia, launching its first region in 2014 and adding a second region in 2018. Google Cloud Platform, on the other hand, only has one region in Sydney but has announced plans to launch a second region in Melbourne in the near future. Oracle Cloud Infrastructure and IBM Cloud both have a single region in Sydney but are continuing to expand their services and partnerships in the region.
Overall, AWS’s recent investments in Australia demonstrate its commitment to the region and its desire to continue providing reliable and scalable cloud services to Australian customers.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Image Credit: AWS
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Steven engages with the world’s largest technology brands to explore new operating models and how they drive innovation and competitive edge.
