Amazon (AMZN) to Boost Reach in APAC With Saudi Arabia Region
Amazon’s AMZN cloud computing arm, Amazon Web Services (“AWS”), revealed its plans to launch an infrastructure region in the Kingdom of Saudi Arabia in 2026.
Notably, the new region, which will be comprised of three availability zones, is expected to aid AWS in addressing the growing demand for cloud services in Saudi Arabia and across the Middle East region.
The region will help AWS deliver low latency and offer access to its robust cloud services portfolio and technology, including AI, machine learning, data analytics and the Internet of Things to customers.
Further, it will allow customers to run critical workloads seamlessly and store content securely in Saudi Arabia while serving end users through the data centers located in the country.
Thus, the latest move is expected to enable AWS to gain traction among startups, enterprises, entrepreneurs, developers, non-profit, education, healthcare and government organizations.
Further, the move bodes well for the company’s long-term commitment to the Middle East. In this regard, Amazon intends to invest more than $5.3 billion in Saudi Arabia.
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Expanding Asia-Pacific (APAC) Presence
Apart from the latest Saudi Arabia expansion plans, AWS plans to launch an infrastructure region in Malaysia, in which it strives to invest around $6 billion by 2037 and support job creation in the country.
Further, AWS intends to pump in 2.26 trillion yen ($15.24 billion) in Japan by 2027. With this investment, AWS strives to boost its cloud infrastructure across the country, especially in Tokyo and Osaka.
In addition, the company’s launch of its second infrastructure region in Melbourne, Australia, last year remains a plus. Through the AWS Asia Pacific (Melbourne) region, AWS strives to invest around $4.5 billion by 2037 and support 2,500 full-time jobs annually.
Also, the launch of an infrastructure region in Israel, located in Tel Aviv, namely, AWS Israel (Tel Aviv) Region, is another positive.
AWS plans to open a region in Bangkok, Thailand and set up an infrastructure region in Auckland, New Zealand, comprising three availability zones.
All these endeavors are expected to aid Amazon, which carries a Zacks Rank #2 (Buy) at present, to capitalize on the growth prospects present in the APAC region, which is an emerging market for cloud technology and has been under the spotlight for the past few years.
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Per a Research and Markets report, the cloud market in the APAC region is expected to witness a CAGR of 15.1% between 2023 and 2030. Infrastructure-as-a-Service, Platform-as-a-Service and Software-as-a-Service are gaining strong momentum in APAC.
Expanding presence in this promising market is expected to aid the performance of AWS, which has turned out to be a key catalyst for Amazon. Shares of AMZN have gained 86.1% over a year.
Competitive Scenario
Given the booming scenario in APAC, not only Amazon but also its peers like Microsoft MSFT, Alphabet GOOGL and Alibaba BABA are leaving no stone unturned to expand their presence in the region.
Microsoft’s Azure is gearing up for the opening of five data centers in APAC, namely South-Central India, Indonesia Central, Malaysia West, New Zealand North and Taiwan North, which will be located in Hyderabad, Jakarta, Kuala Lumpur, Auckland and Taipei, respectively.
Microsoft Azure also has plans to launch a Saudi Arabia Central region.
Meanwhile, Alphabet’s Google launched a data center in Japan in 2023, marking its third such establishment in Asia. The facility is located in Inzai, Chiba. Google’s opening of a data center in Singapore is also noteworthy.
Google’s opening of cloud regions in India’s New Delhi and Australia’s Melbourne last year is an uptrend. Further, the search giant’s opening of the new region located in Doha, Qatar and Dammam, Saudi Arabia, is another positive.
Alibaba is hugely investing in expanding its presence in the cloud market of the underlined region. In regard to APAC, the company has data centers located in Singapore, Australia, Philippines, India, Thailand, Japan, Malaysia, South Korea and Indonesia.
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