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AWS Pouring $35 Billion In Data Centers Amid Amazon Layoffs

Mark Haranas

Amazon Web Services unveils plans to invest $35 billion in building new data centers across Virginia.

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Although parent company Amazon is laying off 18,000 employees, it’s clear that Amazon Web Services is a top priority as the company unveils plans to invest $35 billion in building data centers across Virginia to boost its cloud computing capabilities and customer base.

Seattle, Wash.-based AWS has invested more than $35 billion in Virginia alone since 2006, with AWS planning to invest another $35 billion to boost its cloud computing capabilities in Virginia—known as the data center capital of the world—by 2040.

“Virginia is a world leader in innovation and cloud computing, thanks to its investment in a robust, highly-skilled workforce and emphasis on long-term public and private partnerships,” said Roger Wehner, director of economic development for AWS, in a statement. “We plan to invest an additional $35 billion in the Commonwealth of Virginia by 2040 and create 1,000 jobs.”

[Related: 40,000 Tech Layoffs: Amazon Vs. Google Vs. Microsoft]

AWS, who is on pace to hit $100 billion in revenue this year, worked with state officials to secure the project that will expand AWS data center investment to new locations across Virginia over the next 17 years.

New Mega Data Center Incentive Program; AWS Grant For $140 Million

Virginia is so bullish on AWS’ data center cloud expansion in the state that that the state is developing what it dubs as a Mega Data Center Incentive Program, which AWS will be eligible to receive.

The state’s new Mega Data Center Incentive Program includes up to a 15-year extension of data center sales and use tax exemptions on qualifying equipment and enabling software.

Additionally, AWS will be eligible to receive a custom performance grant of up to $140 million for site and infrastructure improvements, workforce development, and other project-related costs.

The data center incentive program is still awaiting approval by the Virginia General Assembly.

AWS Expands Data Center Overseas

Amazon is one of the largest spenders on building and equipping new data centers on a global scale, alongside the likes of fellow cloud hyperscalers Microsoft and Google.

The goal for the largest cloud computing companies in the world is to build data centers to power their Local Zones or Local Cloud Regions, which enables them to provide cloud services to thousands of customers in a specific geographical region. Having cloud regions locally helps reduce latency and data processing.

In January, AWS launched two new AWS Local Zones in Australia and Chile.

The two new cloud zones are located in the metro areas of Perth, Australia; and Santiago, Chile.

AWS Local Zones places AWS compute, storage, database and other services in popular locations to allow customers to deploy applications that require single-digit millisecond latency to end users or on-premises data centers.

AWS has plans to launch 23 more Local Zones in metro areas globally.

Data Center Investment Comes During Amazon Layoffs

The Virginia $35 billion investment announcement and launch of two new Local Zones overseas comes the same month when parent company Amazon announced it will be lay off 18,000 employees.

Amazon has approximately 1.5 million employees across the globe, meaning the 18,000 layoffs will affect just over 1 percent of Amazon’s total headcount.

In terms of the Amazon layoffs impacting AWS, sources told CRN that AWS wouldn’t see any significant layoffs.

The majority of role eliminations are in the Amazon Stores and PXT (People, Experience and Technology) organizations. PXT is Amazon’s human resources department.

Mark Haranas

Mark Haranas is an assistant news editor and longtime journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks with world-renown CEOs and IT experts as well as covering breaking news and live events while also managing several CRN reporters. He can be reached at mharanas@thechannelcompany.com.

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