$16bn GDP boost expected from second AWS cloud region

Amazon Web Services has launched its second Australian cloud infrastructure region more than a decade after its first, which is expected to generate an estimated $16 billion lift to the country’s gross domestic product over the next 15 years.

The global cloud giant announced the opening of the AWS Asia Pacific (Melbourne) Region on Tuesday morning, bringing much-anticipated latency and resilience improvements to customers in the eastern states.

It will also allow customers with data residency preferences to store data in Australia, as the federal government continues to consider local data storage requirements to improve the security of sensitive data.

The Melbourne region joins AWS’ existing Asia Pacific (Sydney) Region, which has served Australian customers since November 2012. Like the Sydney region, the Melbourne region will consist of three availability zones.

The arrival of the region comes two years after AWS first announced the plans. When the plans were announced, the company said it planned to have the region up and running in the second half of 2022.

AWS is expecting to invest $6.8 million in the project between 2022 and 2037, which includes constructing, connecting, operating and maintaining the data centres needed for the Melbourne region. In the process, it will also support more than 2,500 jobs in the data centre supply chain.

The investment is expected to contribute $15.9 billion to Australia’s total gross domestic product (GDP) over that time, according to an economic impact study conducted by AWS, including from the “ripple effect” that the Melbourne region will experience in the Victorian cloud ecosystem.

AWS’ vice president of Infrastructure Services, Prasad Kalyanaraman, said the company was “proud to deepen” its investment in Australia by “driving local job creation, building cloud skills, and creating opportunities for growth and collaboration with our local customers and AWS Partners”.

“Australia has a strong history of technical innovation, and the launch of a second AWS Region in Australia provides even greater resilience and enables more customers to develop cloud-based applications that help fuel economic development across the country,” he said.

ANZ Bank is one of AWS’s Melbourne-headquartered customers that plans to start using the Melbourne region immediately to improve its customer experience and accelerate its cloud migration.

“We plan to deploy our AWS targeted workloads and applications through the AWS Asia Pacific (Melbourne) Region on day one and want to make it our long-term primary AWS location,” ANZ Bank’s group executive of Technology, Gerard Florian, said.

Other local users to welcome the arrival of the Melbourne region include RMIT, digital property exchange platform PEXA, and Littlepay, a fintech start-up that enables contactless payments on buses.

Victorian trade minister Tim Pallas said that giving Victorian businesses “more choice” over their secure cloud infrastructure would ultimately “deliver a boost to the economy, support innovation, and help create new jobs locally”.

Earlier this month, AWS also launched its first Australian Local Zone in Western Australia, promising similar latency improvements for customers on the west coast. The company plans to add an additional local zone in Brisbane by February 2024.

AWS’s parent company, Amazon, is expected to layoff more than 18,000 of its staff – around six per cent of the retailer’s global corporate workforce – over the coming weeks. The impact on Amazon’s Australian operations remains unclear.

Amazon plans to open a new combined AWS and Amazon office in Melbourne in late 2023.

Do you know more? Contact James Riley via Email.

1 Comment
  1. Digital Koolaid 1 year ago

    What part of the GDP formula goes up? GDP = C + I + G + (Ex – Im). AWS looked at itself and expected itself to increase the formula by more than $1 Billion every year? That will happen because of “ripples”? The old shibboleth “productivity gains” that nobody can actually find? No, it’s the “spillover effects”. Somehow Foreign Direct Investment provides access to “global value chains”. Huh? Read the rest of the report at hxxps://anz-resources.awscloud.com/melbourne-region-launch/aws-economic-impact-study-aws-investment-in-victoria. None of the 11 references to GDP explain how the GDP formula goes up. Instead AWS says “GDP … includes the value added by AWS to the IT sector in Australia” – but “value added” isn’t even in the GDP formula and can’t be measured. TechOne talked about “savings” on Page 10, but that reduces the GDP formula instead. You might end up thinking the report is nonsense. I did.

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