As we watch the biggest Infrastructure-as-a-Service players battle it out for dominance, it’s becoming apparent that building a worldwide presence has become a requirement to compete in this market.
If you doubt that supposition, consider that we are seeing announcements coming at a furious pace. As the E.U. and U.S. become increasingly (but not completely) covered, the major cloud players are looking elsewhere for new markets to tap.
In fact, Synergy Research issued a recent study of hyperscale data centers, and found that the largest companies were building data centers across the world. “The companies with the broadest data center footprint are the leading cloud providers — Amazon/AWS, Microsoft, IBM, and Google. Each has 45 or more data center locations with at least three in each of the four regions – North America, APAC, EMEA, and Latin America. Oracle and Alibaba also have a notably broad data center presence,” according to the report.
Data centers everywhere
Just last week, Microsoft announced it was expanding its presence in Europe, while announcing two new data centers in the Middle East due to open in 2019.
Meanwhile Alibaba announced it was opening a new data center in Indonesia at it continues to expand rapidly and build data centers across the world. Alibaba was late to the cloud infrastructure game, but has come on quickly in recent years.
Also, last week Google announced plans to expand their Dutch presence with a 500 million euro investment. This comes on the heels of a mammoth undersea cable investment to help move data between data centers around the world, announced in January. All of that is part of a 3-year $30 billion data center expansion plan for Google Cloud that has been on-going since Google tapped Diane Greene to run Google Cloud at the end of 2015.
Lest you think that Amazon is hanging back here, it’s not, but the others have more at stake given Amazon’s massive market share lead. Amazon has plans for new data centers on the books for Bahrain, Hong Kong (right in Alibaba’s backyard) and Sweden, as well as a new government-focused data center in Virginia.
World class and worldwide
These companies aren’t messing around. There is a data center building boom going on, and there are a number of reasons behind that. For starters, some countries, particularly in the Middle East and China, may require that data be kept in-country. That requires building data centers (or partnering) to accommodate legal requirements.
The E.U. has the GDPR data privacy law going into effect in May and that it’s going to require everyone who touches data to comply with the rules around keeping it private. That could include keeping data local in some cases, and that means have an in-country data center to make that happen.
Finally, there is a practical reason for building local data centers. Certain applications like video and games require a lot of bandwidth. Users don’t want their content slowing down and moving it closer to the edge where users live can reduce latency.
All of these factors, and the simple lure of competitive pressure are all contributing to the building boom, which should continue for another couple of years until all potentially lucrative markets have been covered.
Photo: Victorgrigas on Wikimedia Commons. Used under CC BY-SA 3.0.