AWS to open cloud region in New Zealand

Amazon Web Services (AWS) will open its first datacentre and cloud region in New Zealand by 2024 as it continues to spread its wings in key Asia-Pacific markets.

The Auckland region will be owned and operated by AWS’s local entity, enabling AWS customers to keep their data in New Zealand. Organisations can also make use of two Amazon CloudFront edge locations and AWS Outposts in Auckland.

AWS said it plans to invest NZ$7.5bn (US$5.3bn) in New Zealand over the next 15 years through the new cloud region, including capital expenditures on the construction of datacentres, operational expenses such as ongoing utilities and facility costs, and purchases of goods and services from regional businesses.

An economic impact study by AWS found that spending on construction and operation of AWS infrastructure in New Zealand will increase New Zealand’s GDP by about NZ$10.8bn over the next 15 years.

That includes direct and indirect economic benefits such as new employment and sales for the datacentre supply chain and related sectors. About 1,000 new jobs will be created in New Zealand from the investment.

Prasad Kalyanaraman, vice-president of infrastructure services at AWS, said the company’s investment in New Zealand reflects its deep and long-term commitment to the country.

“We are excited to build new world-class infrastructure locally, train New Zealanders with in-demand digital skills, and continue to help local organisations deliver applications that accelerate digital transformation and fuel economic growth,” he said.

AWS first opened its New Zealand entity in Auckland in 2014. This year, it expanded its presence further, opening new offices in Auckland and Wellington to support a growing team of more than 100 employees.

Rachel Jones, an analyst at GlobalData, said AWS’s move to open new datacentres in New Zealand is unlikely to be an isolated project, as the facilities are increasingly essential to support Amazon’s size and scale.

“The pandemic has demonstrated the vital importance of cloud datacentres for business activity to the point where they could now be regarded as an essential utility, alongside water, electricity and gas,” she said.

“Datacentres are vital in supporting and sustaining people’s everyday life and Amazon’s project has the capacity to help to improve network availability for the local population.”

AWS counts some of the largest organisations in New Zealand as clients, including Air New Zealand, which is using a plethora of AWS services to run more than 70 digital services and applications.

“We have collaborated with AWS on many innovations to embed digital at the heart of everything we do, including building a secure digital booking system that easily scales to meet fluctuating demand,” said Greg Foran, CEO of Air New Zealand.

“Looking ahead, we need strong, resilient cloud architecture to provide customers with a more personalised and innovative digital experience. The new AWS infrastructure will help us deliver on our vision, provide customers even faster access to all our services, and underpin our delivery of a best-in-class digital experience to Kiwis for many years to come.”

According to GlobalData, hyperscale datacentres will represent 53% of all datacentre servers by the end of 2021, with their construction continuing to support local economic growth through job creation and enhancing network availability in rural areas.