Why Is Amazon Web Services Ignoring Canada?

“We are probably too small to have Amazon’s interest,” Ryan Wilson, CTO of Kubera Payments, tells TechWeekEurope. “Our population is smaller than California.”

Wilson is just one of many technology and business leaders in Canada pleading with Amazon’s cloud division, Amazon Web Services (AWS), to open a cloud region in their country. With a population of just over 35 million, Canada may have a smaller population than The Golden State, but its vocal citizens looking for cloud are fed up with being ignored.

So why hasn’t AWS decided to venture into Canada? The cloud computing giant, which raked in revenues of more than $6 billion in 2015, is leading the pack in terms of using cloud to power business.

AWS has 32 ‘Availability Zones’ across 12 geographic regions worldwide, including recently announced regions in the United Kingdom, China, and India. Regions and availability zones, which are basically clusters of data centres, enable customers to speed up their cloud computing by reducing latency. The closer you are to a data centre, the faster you can use the cloud, fundamentally.

Amazon’s most recently announced regions are all in high cloud growth areas for cloud. North America has four AWS regions, with a fifth planned in Ohio, but the map has some glaring blank space in Canada.

Privacy

“Canada has privacy laws that [mean] for many industries you cannot store personally identifiable data in the USA because of the Patriot Act,” Wilson explains. “Healthcare records are a good example.”

Wilson argues that healthcare software, for example, is so archaic and expensive in Canada because there are “no credible” cloud providers currently operating in the country, yet they are limited by data sovereignty laws.

“For us, having someone like AWS have a Canadian presence would open up all sorts of options for innovation. AWS is such a game changer in software…that opening a region and thus enabling us to use cloud software lowers the barriers to technical innovation,” Wilson says.

“Ergo…Amazon opening up a region [would] have a positive impact on our country that is hard to measure!”

Many companies in Canada do indeed take advantage of AWS, and there are ways around data sovereignty issues. Companies can keep databases alone in Canadian data centres and run the rest of their infrastructure on AWS, but there is no doubt a full region in the country would make using AWS for Canadian customers much easier.

But does Amazon see any return for the massive investment it takes to set up a region? After all, major AWS hubs of Virginia, Oregon, and soon Ohio are just a stone’s throw away from Canada, so perhaps it sees no incentive for a Canadian region.

TechWeekEurope went to AWS to try and find an answer.

‘Long list’

“We’re constantly getting feedback from customers on where they would like the next AWS Region and have a long list of target countries that we are looking at,” says AWS.

The cloud firm said that the list is, however, is constantly being reevaluated and reprioritised, presumably to suit economic benefits for AWS itself.

“Where we locate our regions is based on a combination of factors. We consider locations in terms of how much geographic area we can cover and have the right kind of low latency,” AWS tells TechWeekEurope.

Canada is similar to countries like Germany, for example, with laws that require certain sensitive information to be kept inside the country. AWS does acknowledge this, and tackled the problem in Germany by setting up a region in the country.

“We also look at countries with data sovereignty requirements, where for whatever reason, customers are not willing to consume services when the infrastructure is not operated from within their country,” an AWS spokesperson explains. “I would say that the number of those countries today is relatively small.”

But AWS is not alone in shunning Canada. A majority of the big cloud service firms have a data centre absence there.

“Of the big four cloud providers neither AWS nor Microsoft nor Google have a major data centre presence – only IBM does,” Synergy Research Group’s chief analyst John Dinsdale explains to TechWeekEurope.

Microsoft does have plans in the pipeline for regions in Canada, but Dinsdale said that even he hasn’t heard any news from AWS or Google.

“Looking beyond the big four and out across Apple, Facebook, Rackspace, etc., Canada still looks a bit barren,” says Dinsdale.

“If potential or actual Canadian cloud users are screaming out for a local presence, it would seem to be falling on mostly deaf ears. Generally speaking, Western Europe is featuring heavily in data centre planning and selectively APAC (Asia Pacific) remains a focus. Plus, there is continuous expansions of major data centres in the US.”

Aside from economic motivations for AWS, it is still surprising to see such a lack of data centre builds from the big players in the country.

Canada has an abundance of clean power, with the country generating huge amounts of its electricity from hydroelectric and wind power. As of June last year, Canada produced four percent of its total electricity demand from wind power. By 2025, this is set to hit 20 percent. The country is also the world’s second largest producer of hyrdroelectricity, after China.

It’s also worth bringing up the temperature. Data centres have to stay cool, and those in colder climates tend to spend less on cooling technology, as the environment goes a long way in helping the servers stay chilly without having to use traditional, electricity-hungry air conditioning. Take Facebook’s Swedish data centre, for instance, which uses year-round free air cooling thanks to the nippy climate.

But still, AWS is as tight-lipped as ever on the issue. With major expansions due this year in Europe and Asia, it might not be until 2017 when there’s news of a Canadian region, if there’s going to be news at all. That said, with Microsoft setting up shop in the country with Azure cloud, which itself is in a very healthy second place behind AWS, it doesn’t take a massive stretch of the imagination to see Amazon keep up the competition.

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