Amazon Web Services (AWS) plans to open a data centre region in Auckland in 2024.

The region will comprise three “availability zones”, which were described by AWS NZ country manager Tim Dacombe-Bird as separate physical locations with one or more datacentres.

The cloud services giant said it will invest $7.5 billion over 15 years in New Zealand and promised its new infrastructure would add 1,000 jobs and $10.8b to the country’s gross domestic product (GDP) over the period.

“This is AWS’s largest investment in NZ to date,” Dacombe-Bird told NZ media on Thursday.

“It will unleash further innovation, drive greater productivity, increase our skilled workforce, and truly position NZ at the forefront of digital commerce for generations of Kiwis to come.”

AWS currently offers more than 200 cloud services such as data storage, compute power, analytics, and artificial intelligence.

Dacombe-Bird would not break down the $7.5b figure but said it included capital spend for the datacentre builds, specialised hardware for them, operational expenditure for the facilities, the purchase of goods locally for the supply chain, and salary and wages for the created jobs.

“Our investments reflect AWS’s deep and long-term commitment to Aotearoa. 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,” said Adam Selipsky, chief executive officer of AWS.

Currently, the world’s three major cloud services providers AWS, Microsoft, and Google, do not have physical local datacentres on NZ soil, meaning NZ customers’ data is stored offshore.

A local data centre avoids data sovereignty issues that can arise when sensitive data is hosted offshore. In 2020 Microsoft announced plans to open a datacentre region in Auckland, though a firm launch date is not yet confirmed.

The big three are seemingly in a race, but it looks like Microsoft will get there first.

Offshore data storage can also slow the speed of NZ customers’ cloud services.

“The AWS region here will enable customers from startups to enterprises, as well as government, education and non-profits organisations to run applications and securely store data from data centres located right here on NZ soil,” Dacombe-Bird said.

He said AWS is committed to powering its operations, including its data centres, with 100% renewable energy by 2025.

AWS announced an ‘edge location’ in Auckland in September 2020, its first physical infrastructure in NZ designed to reduce latency and improve the speed of cloud services to its customers. 

Google announced a similar Auckland setup in July. 

Head of SMB for AWS NZ Haren Samarasekera said the datacentre announcement represented the company’s investment in addressing NZ’s digital skills shortage. 

Alex Burke, the chief executive of AWS customer Education Perfect, agreed and said it will help his company attract talent to NZ.

An AWS region in Auckland would bring greater availability, speed, and reliability, with faster and more seamless access to Education Perfect’s platform for its customers.

“The market for tech workers is very competitive, and there is no reason why NZ cannot become a tech hub,” he said.

“This investment, whilst in Auckland, will positively impact the whole country. We are a Dunedin based regional business with this infrastructure, we will reap the benefits of this investment. This is the beauty of the cloud, allowing tech to be leveraged from anywhere.”

AWS opened a new office in Auckland in May a month after it posted $35.9m in revenue for 2020, up from $19.4m in 2019. Despite this growth, the wholly-owned subsidiary recorded a net loss for 2020 of $2.5m, up from $697m the year prior.