Amazon’s $3.4bn Spain data centres latest move in game for cloud supremacy

By Elles Houweling

Amazon Web Services (AWS), the ecommerce giant’s cloud computing branch, will invest €2.5bn ($3.04bn) in new data centres in Spain as it faces huge competition from other cloud providers, Reuters reports.

The company first announced plans for the northern Aragon region in 2019, saying the new infrastructure plans would launch late 2022 or early 2023. AWS is now saying that the new region will be available in mid-2022, ahead of schedule.

AWS said it would spend the amount over a period of 10 years. The investment includes capital expenditure, the construction of the centres, imports of equipment and operating expenses such as the salaries of the 1,300 employees the company will hire there.

It said that the Spain region would launch with three availability zones, or physical regions that have their own independent power, cooling and security in place.

The solar plant in Zaragoza, in the region of Aragon, is one of Amazon’s two renewable energy projects in Spain. Last year, the company announced the new energy project, which provides 50 megawatts (MW) of capacity. According to Amazon, “these new projects will supply renewable energy to Amazon Web Services data centers.” This explains why AWS chose Aragon as location.

AWS already offers an AWS Edge location in the Spanish capital Madrid, where data is cached to reduce latency for users in the country that wish to access another AWS region. The Spanish expansion is motivated by its services having grown popular in Spain. In its announcement, it noted that two-thirds of companies listed on the Spanish stock market are already customers.

The market leader for cloud services shows no sign of slowing down. Just last month, AWS announced it would build three new data centres in the United Arab Emirates (UAE) that will come online in the first half of 2022.

AWS currently has data centres in 25 geographic regions. Apart from Spain, it plans to launch five more Regions in Australia, India, Indonesia, Switzerland and the UAE.

According to GlobalData forecasts, data centre revenues will reach $948bn in 2030, giving a large market of opportunities to stakeholders.

However, AWS is facing stiff competition. Together with Microsoft Azure and Google Cloud, it is one of the three primary powerhouses in the cloud industry.

Amazon’s expansion into Spain is surely also a key step in its efforts to remain at the head of the pack.