Amazon Web Services (AWS) will spend £1.8bn on cloud computing infrastructure in the UK over the next two years, doubling its investment in Britain. AWS is the cloud market leader, but is facing increased competition from fellow tech giants Microsoft and Google in the battle to secure enterprise clients.
Announcing the news earlier today, AWS said it is making the move “to meet the growing needs of our customers and to help strengthen the UK’s digital infrastructure”. In a statement the company added: “This will bring AWS’s total investment in the UK to more than double what it is today, since launching the AWS London Region in 2016.”
“We are proud of the contributions we are making to the UK economy,” said Darren Hardman, VP and general manager of AWS UK and Ireland. “Looking ahead, we know that the UK remains full of opportunity and we continue to be excited by the potential to continue supporting our customers, partners, and citizens across the UK over the years to come.”
AWS in the UK: cloud and edge services
AWS does not break out how many customers it has in the UK, but the company’s most recent UK impact report, produced by Public First, says it serves 39 of the UK’s top 50 fastest growing tech businesses and 16 of the 17 UK ‘unicorns’ – tech businesses with a valuation of £1bn or more. Clients include pharmaceutical giant AstraZeneca, as well as Barclays and Natwest banks, and the Ministry of Justice.
The AWS London Region, available to customers in the UK, currently features three availability zones, clusters of data centres where customers can “architect highly scalable, fault-tolerant applications,” AWS says. Information has not been released about how many additional zones will be added as a result of this new investment, or if any new jobs will be created. An AWS spokesperson told Tech Monitor that the company was not sharing any further details of the investment at this stage.
As well as catering for cloud services, AWS has also been establishing edge computing locations across the UK, which it says provides “secure, reliable, low latency and high throughput network connectivity to organisations across the country.”
The company claims cloud computing can play a role in furthering the government’s levelling up agenda which aims to spread investment around the country. It points out there are large disparities in cloud take-up across the regions of the UK, citing the Public First research which shows that if cloud prevalence in the North East were similar to London, it would boost the local economy by £1.4bn.
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Why is AWS investing in the UK?
Globally, AWS remains the cloud market leader, enjoying a 33% market share in the fourth quarter of 2021, according to figures compiled by Synergy Research Group. This puts it well ahead of its closest rivals Microsoft Azure (21%) and Google Cloud (10%).
However, there are signs their rivals are closing the gap. Microsoft has been focusing on industry-specific cloud offerings across verticals including financial services and the public sector. Last year it spent $20bn on Nuance, producers of voice recognition software Dragon, which is commonly used in medical settings. The move was thought to be designed to give it a leg up in the healthcare industry, long targeted by Big Tech as a potentially lucrative market.
The strategy may be paying off, with Flexera's 2022 State of Cloud report, released last week, showing that the use of Azure among both large enterprises and small businesses is exceeding AWS for the first time.
Google Cloud has also been actively building out its offering to provide customers with more rounded service, and last week beat Microsoft to the purchase of security vendor Mandiant in a deal, which will cost the tech giant $5.4bn.
Against this backdrop, it is no wonder AWS is doubling down on its infrastructure investment. Last year the company spent $44bn building out its global infrastructure, 52% more than it had shelled out in 2020. Today's news could be a sign that another bumper year of investment is on the cards.
