Amazon Opens Two Data Centers In India To Accelerate AWS Expansion

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Amazon (NASDAQ:AMZN) opened two data centers in Mumbai, India on Tuesday in a bid to accelerate the expansion of its Amazon Web Services (AWS) division in the Asia-Pacific region. The new Asia Pacific region will have two separate availability zones (AZs), taking its global total to 35 AZs in 13 regional locations across 5 continents (except Africa). The new AWS data centers are part of the recent $5 billion investment commitment to India for Amazon. At the time, management had stated that it intended to use this money to improve its position in the e-commerce space as well as build its web services business in the country. (Also read Why Amazon Is Betting Big On India)

Benefits Of AWS Data Centers In India

The new AWS data centers in India will help bring on board more clients and help Amazon tap into the growing demand for cloud infrastructure services from established as well as new players. In addition to making cloud services faster and more accessible, data centers located in India will help the company ward off fears of information security raised from time to time by customers as well as the Indian government. After the launch on Tuesday, Amazon stated that it expected to bag new clients in the domains of banking, financial services & insurance (BFSI), information technology (IT) and government contracts. [1]

The company has 75,000 India-based customers who currently use other AWS regions, mostly Singapore. These include startups as well as established companies such as STAR India, Tata Motors, Bombay Stock Exchange, Lupin Pharmaceuticals, Infosys and Cognizant. To put things in perspective, AWS has over a million customers worldwide.

Importance Of AWS For Amazon

AWS is the most profitable business division for Amazon, with sales close to $8 billion (2015) growing at over 50% y-o-y with an EBITDA margin of 30%. In comparison, the EBITDA margin for Amazon’s online marketplace business was around 10% last year.

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Notes:
  1. Amazon reaches the cloud to shower start-ups with data, Business Standard, June 29, 2016 []
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