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August 20, 2015

AWS launches Loft to support British start-up economy

London first city to get AWS' support centre outside the US with Berlin to follow.

By Joao Lima

Amazon’s cloud-computing arm, AWS, has revealed plans to open a London based data support centre for UK start-ups.

The new "Loft" will be located in East London and will be supported by Intel and Chef, according to the firm.

From September 10 to October 29, British start-ups will be able to get personal technical support and training given by advisers, amongst other services.

The program has spaces in San Francisco and New York, with London being AWS’ first hub outside the US. The company said London was an "obvious choice" to launch outside the US due to the number of UK based customers the firm works with.

Werner Vogels, CTO and Vice President, Amazon.com, said: "The UK is a hotbed of innovation and London is one of the main places where we see talented, ambitious entrepreneurs coming together to test ideas and start new businesses that leverage cloud computing.

"With the AWS Pop-up Loft in London we will be bringing together a host of AWS resources, and some of the brightest and most creative minds in the industry, to help startups across the UK."

Speaking to CBR Daniel Beazer, analyst at Peer 1 Hosting, said that AWS’ London Loft "sounds a bit like a marketing ploy".

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He added: "There is a perception in the market that support is Amazon’s major weakness, and Amazon wants to change that."

AWS’ London announcement comes at a time when other tech titans like Microsoft and Google are also making investments in the startup space.

Matt Clifford, CEO at Entrepreneur First, a company that invests in Europe’s technical talent to build startups in London, told CBR that increased competition between Amazon, Microsoft, Google and others is likely to result in even lower prices and better service.

He said: "This is a boon for new companies looking to develop strong and technically defensible technology products at the entry level of the market."

Reacting to the news, Andrew Roughan, Director at commercial data centre provider IO, said this is an astute move from AWS, "moving into the vibrant London tech scene and offering a service to a huge start up economy".

Roughan explained that AWS have a scale platform that transforms IT economics and that start-ups do not have legacy IT complications to concern themselves with and public cloud gives them a "great opportunity" to scale without significant investment.

He added: "However, this should not be confused with those start-ups who hold technology as their core competence, their mission critical platform that will make the difference for them winning or losing in their markets.

"For these start-ups, they may continue to choose public cloud but they should ensure they use an operator with an enterprise grade data centre and consider the build or buy benefit case at every stage of their journey."

However, analysts were surprised that AWS opted to open a "Loft" instead of a data centre in British soil.

Beazer said: "It is interesting that it is a support centre rather than a data centre they have decided to open.

"It was the other way round in Germany – feelings about privacy are so strong there that they had to open a node so local users could keep data in the country. This shows customers in the UK are not so bothered about having their data stored in Dublin."

Amazon added that another European Loft will open in Berlin in October and that it is looking into further international expansion.

Ariel Kelman, VP for marketing at AWS, told the FT: "We are considering opening other Lofts in new cities around the world.

"Every top city you would expect, where there is a high concentration of start-ups, is on our list."

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