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Amazon boosts AWS spending with new German data center [The Seattle Times](Seattle Times (WA) Via Acquire Media NewsEdge) Oct. 23--Amazon Web Services opened a new, massive data operation in Frankfurt, Germany, on Thursday, a huge investment for a company facing shareholder pressure over thin profit margins caused by the cloud-computing business. It's the 11th region, as the data centers are known in Amazon Web Services' (AWS) parlance, for the company and its second in Europe; the other one is in Ireland. Amazon declined to say how much it spent developing the new region. But documents that recently emerged in the company's bid to get tax breaks and land for a new region in Ohio show the company plans to spend $1.1 billion developing it. Amazon is opening its German region to meet European growth, as well as give German customers the ability to keep their data within the country. "We have extremely strong demand from German customers," said AWS Vice President Adam Selipsky. So-called data residency is becoming increasingly important as some German regulators demand that customer information remain within the country's borders. And some companies, such as AWS customer Hubert Burda Media, have similar internal rules. "We have long had policies preventing data to be hosted outside of German soil and this new German region gives us the option to use AWS more meaningfully," Burda chief scientist JP Schmetz said in a statement. Amazon has been among the pioneers in building the business of renting data storage and computer-server time to corporations and agencies to run their core business processes. Since launching AWS in 2006, Amazon has seen rivals such as Microsoft, Google and IBM move into the business. That's led to something of an arms race in data-center development. In addition to the possibility of the Ohio region, Amazon opened a region in China earlier this year. Last month, a Microsoft executive told the Berlin daily newspaper Der Tagesspiegel that it is considering building a data center in Germany for its cloud-computing business. Amazon clearly intends to open new regions as cloud computing continues to grow, and companies seek to keep data within country borders. "We've been expanding pretty steadily for the last couple of years," Selipsky said. "We'll continue to expand pretty aggressively." The Frankfurt region will be spread across two different data centers in the area. AWS builds multiple locations within regions that operate independently. That protects regions against massive failures that might otherwise threaten to shut the entire operation down. The new region comes as AWS has seen its rapid revenue growth decelerate. Earlier this year, the company moved quickly to match or beat aggressive pricing by competitors such as Cisco and Google, which trail AWS in providing computing platform services over the Internet. Amazon will report third-quarter earnings after the markets close Thursday. Analysts expect the company to have a loss of 74 cents a share on revenue of $20.85 billion. Cantor Fitzgerald analyst Youssef Squali expects AWS to account for $1.36 billion of that revenue, a 35 percent increase from a year ago. Jay Greene: 206-464-2231 or [email protected]. Twitter @greene ___ (c)2014 The Seattle Times Visit The Seattle Times at www.seattletimes.com Distributed by MCT Information Services |