Amazon Web Services claims it is to invest upwards of £1.8bn ($2.36bn) over the next two years in building and operating data centers in the UK, meet the ever growing demand for cloudy tech.
The cash burn includes spending on infrastructure, renewable energy, and skills and training, the megacorp said.
AWS opened its London region in December 2016, before which the company’s UK customers had to rely on servers and services delivered from Dublin, Frankfurt or US East Coast data centers. Amazon said that the latest estimated budget splash would more than double its total AWS investment in the UK to date.
In those intervening five and a bit years, AWS has expanded its footprint, adding a third Availability Zone to the London Region in 2018. Availability Zones provide for redundancy and fault-tolerance in applications by allowing AWS customers to spread operations across multiple sites within the same region.
Amazon did not reveal whereabouts it would build out its data center capacity in the UK, but as The Register detailed in an article earlier this year, the firm is understood to be constructing at least three new data center sites in England: one is at Bracknell in the southeast, another at Burderop near Swindon in the southwest, and the third is at the site of the former Didcot, a power station in Oxfordshire, also in the southeast of the country.
Where’s the money going?
It also isn’t clear how much of the £1.8bn is actually going into building new data centers or expanding existing facilities. Rival cloud operator Microsoft disclosed last year that it was constructing up to five colocation buildings at a site in San Antonio, Texas, that were projected to cost over $200m, according to reports.
Rene Buest, Gartner senior director and analyst for cloud & cloud IT services, said all the hyperscale providers are now spending on local delivery to meet rising demand.
He added that in the UK, Gartner’s Cloud End-User Buying Behavior Survey found 73 percent of respondents involved in purchasing decisions expect their organization to increase spending on cloud services in the next 12 months.
Amazon declined to comment for this article.
But in its announcement, Amazon does not hold back from congratulating itself on its contribution to the UK economy, stating that 41 percent of companies in its AWS Partner Network (APN) said their business would not be possible without AWS, and 58 percent that AWS had helped them to win more customers.
“We are proud of the contributions we are making to the UK economy,” said AWS VP & General Manager for UK and Ireland, Darren Hardman, in a canned statement as part of the announcement.
“Looking ahead, we know that the UK remains full of opportunity and we continue to be excited by the potential to continue supporting our customers, partners, and citizens across the UK over the years to come,” he added.
Amazon also states that its “dedication to delivering value in the UK” extends beyond infrastructure investments, pointing to research that estimates that AWS is generating £8.7bn ($11.4bn) in economic value for businesses across the country.
The company has, of late, been pressured to be more transparent about how and where it pays tax around the world, with its last set of accounts in the UK showing a tax payment of £9.2m (once £9.1m of deferred tax had been applied) on profits of £127.8m for the year ended 31 December 2020, while turnover stood at £4.8bn.
AWS said it has committed to investing hundreds of millions of pounds to provide free cloud computing skills training for 29 million people by 2025, although this in 200 million countries across the globe and not just in the UK.
However, the company has also halved the amount of credit it offers charities to take advantage of the IT services operated by AWS, as detailed earlier this month. ®