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MacManus: Amazon vs NZ options in the cloud

Technology columnist Richard MacManus talks to Amazon Web Services' boss in New Zealand about the data centres in Sydney that so many Kiwi companies use. It turns out they're a secret even to him.

Amazon Web Services (AWS) is a dominant player in the global cloud computing market. It runs 33 percent of the world’s public cloud services, according to Synergy Research Group. Second is Microsoft Azure (13 percent) and Google Cloud Platform (6 percent).

For all its global dominance, AWS in New Zealand is something of a black box. It has no public cloud node here – the closest is in Sydney. Despite this, some of our biggest companies rely on AWS services. Notably Xero, which migrated its entire infrastructure to AWS last year.

We also have no idea how many employees AWS has in New Zealand. I didn’t even realize it had a presence here, until I met Tim Dacombe-Bird last week. He’s the NZ Country Manager for AWS, but he wouldn’t tell me how many people report to him. That’s because Amazon’s policy is to not disclose staff numbers for individual countries; all it will say is that over 500,000 people work globally for the giant company.

In fact, AWS has offices in both Auckland and Wellington – and it’s staffing up. At time of writing, there are 15 AWS jobs available in New Zealand: eight solutions architect roles, six sales or accounts roles, and one senior data scientist. Twelve of these jobs will be based in Auckland and the other three in Wellington. Dacombe-Bird himself lives in Wellington, but lists his office address as Auckland.

I’d venture to suggest that Dacombe-Bird, who became Amazon’s first local employee in 2013, is now one of the most powerful IT people in New Zealand. Given the pervasiveness of cloud computing in today’s IT landscape, and AWS’s dominant market position, he’s in the enviable position of being able to influence the IT direction of many of our leading organizations.

Need to know basis

Which made it surprising to discover that Dacombe-Bird has never visited the Sydney data warehouses that AWS operates. Indeed, he doesn’t even know where they are located. The location and operational details of Amazon’s data warehouses around the world is apparently top secret. It’s on a “need to know basis,” he told me.

What he was able to say is that Amazon’s Sydney setup has three “availability zones,” which are “a collection or cluster of data centres”. The zones are far enough apart from each other that the Sydney AWS region could withstand natural disasters and similar major disruptions. Each zone operates on a separate power grid, network and flood plain.

For all this technical separation, Dacombe-Bird said that “from a customer perspective they appear as one facility”.

So will New Zealand ever get its own AWS public cloud node? Dacombe-Bird was non-committal on that, saying only that “we’re always evaluating where we deploy capacity, based on customer demand”. With 19 regions covered currently, including Sydney, he added that Amazon is “a long, long way from being finished in global expansion.”

While we’re waiting for the big US tech companies to decide whether to come here, it’s worth noting that New Zealand does have locally-based public clouds. The IT firm Catalyst has a service called Catalyst Cloud. According to co-founder Don Christie, it stacks up well compared to AWS.

“We have three distinct OpenStack based regions in NZ,” Christie told me, “and so from that perspective we already offer more [local] regional diversity than AWS and Google.”

There are other Kiwi options too, he said.

“Catalyst, Umbrella, Datacom and Spark have a lot of good local data centres connected straight into our fibre backbones. They are also mostly powered by renewable energy – a biggie in the current policy environment.”

An Australian lag

One area that local providers surely have an edge over their offshore competitors is in latency: that is, how fast the data can travel to end users. I asked Dacombe-Bird how AWS competes with local data centres if its closest cloud node is in Sydney?

“Latency doesn’t come up a lot with customers,” he replied. According to AWS figures, there’s a 25 millisecond latency from Auckland to Sydney and about 30-31ms from Wellington. “150ms is where time-sensitive applications can get a bit twitchy,” he said, adding that “we don’t generally get pushback around latency”.

Naturally, Don Christie has a different viewpoint on this.

“Our research shows that a 22ms latency lag leads to a one to two second decrease in typical page load times,” Christie said. “There is a lot of independent research that shows the impact of such changes on consumers. New Zealand is pretty naive about this aspect of internet business.”

However, it seems latency wasn’t a factor in Xero’s decision to migrate their data to AWS’s Sydney data warehouses. So why did they make that huge move?

“We can provide a price point that’s significantly lower than any other provider,” Dacombe-Bird told me. “But what was really important to Xero was, in fact, the pace of innovation.”

Services like machine learning and AI were important to Xero, he said.

“They wanted to take advantage of those services, rather than have to build those things themselves. That’s very common with customers today.”

He pointed out that at last week’s big AWS conference in Las Vegas, Re-Invent, there were more than 95 new services or updates to services announced. “It’s an incredible pace of innovation,” he said, “and that’s the real benefit to customers.”

Take-it-or-leave-it cloud world

In New Zealand, AWS targets both “independent software vendors” (ISVs, like Xero) and young startups. There are around 1,200 ISVs in New Zealand, Dacombe-Bird told me, and AWS aims to help such organisations “re-architect their underlying platform to run more efficiently and take advantage of new technologies like Serverless Compute.” The latter basically means Amazon manages everything related to the server.

Don Christie from Catalyst counters that local cloud providers can offer Kiwi customers “intimacy.” By which he means responding to individual client needs. “We can customize support agreements,” he said, “and introduce new services – effectively do all that stuff for New Zealand customers that we were told was not possible in this new ‘take it or leave it’ cloud world.”

Despite the benefits a local provider like Catalyst Cloud can offer Kiwi customers, it’s hard to ignore the global scale of AWS and its massive mindshare with developers – or “builders” as Amazon now calls them

I do find the secretive, black box approach that AWS takes in small markets like ours to be disconcerting. Nevertheless, it’s clear that AWS is helping our local organisations and startups adapt and thrive in this cloud computing world.

I’m glad we have local options too, but the truth is we need AWS if we’re to continue growing our tech sector.

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