Amazon’s AMZN cloud computing arm, Amazon Web Services (“AWS”), recently announced plans to establish an infrastructure region in Saudi Arabia by 2026. This initiative, which will consist of three availability zones, is poised to meet the escalating demand for cloud services in Saudi Arabia and the wider Middle East region.
The new region is set to facilitate AWS in providing high-speed access to its comprehensive cloud services portfolio, featuring cutting-edge technology such as AI, machine learning, data analytics, and the Internet of Things. This move will enable customers to seamlessly execute critical workloads and securely store data within Saudi Arabia, serving end-users through local data centers.
This strategic maneuver is anticipated to bolster AWS’s appeal to diverse clientele, ranging from startups and enterprises to government bodies, healthcare institutions, and educational organizations. Furthermore, this underscores Amazon’s substantial commitment to the Middle East, with plans to invest over $5.3 billion in Saudi Arabia.
Expanding Footprint in Asia-Pacific (APAC)
Alongside the Saudi Arabia expansion, AWS is gearing up to launch infrastructure regions in various APAC territories. Notably, AWS is eyeing an investment of around $6 billion in Malaysia by 2037, aimed at bolstering the country’s tech landscape and fostering job creation.
The company also plans to infuse 2.26 trillion yen ($15.24 billion) in Japan by 2027 to reinforce its cloud infrastructure, particularly in Tokyo and Osaka. Additionally, AWS’s recent establishment of its second infrastructure region in Melbourne, Australia, demonstrates its commitment to investing approximately $4.5 billion by 2037 and creating 2,500 full-time jobs annually.
Moreover, AWS’s foray into Israel with the launch of an infrastructure region in Tel Aviv is another strategic maneuver aimed at expanding its global footprint.
As AWS sets its sights on establishing a presence in Bangkok, Thailand, and Auckland, New Zealand, these initiatives collectively underscore Amazon’s proactive approach in leveraging the burgeoning opportunities in the APAC region. This region, known for its rapid adoption of cloud technology, presents a lucrative growth avenue with a projected CAGR of 15.1% in the cloud market from 2023 to 2030.
Competitive Dynamics in the APAC Region
The intensifying competition in the APAC region is evident as tech giants such as Microsoft, Alphabet, and Alibaba intensify their efforts to expand their foothold.
Microsoft, for instance, is slated to inaugurate five data centers across APAC to bolster its Azure offering, alongside announcing plans for a Saudi Arabia Central region. Meanwhile, Alphabet’s Google has been strategically deploying data centers in Japan and Singapore, signaling its commitment to the region’s burgeoning cloud market.
Alibaba, a key player in the APAC cloud segment, has been aggressively investing in expanding its cloud infrastructure, with data centers strategically located across Singapore, Australia, India, and other key APAC markets.