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AWS to pump additional R30bn into SA cloud infrastructure

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 14 Apr 2023

Amazon Web Services (AWS) says it invested R15.6 billion in its cloud infrastructure in South Africa between 2018 and 2022, and plans to invest another R30.4 billion locally over the next six years.

In its Economic Impact Study, released this week, the cloud computing giant outlines its long-term investment in its Cape Town-based AWS Africa region since 2018, when it was first announced.

The economic impact research was conducted by AWS, using the input-output model developed by Harvard economist Wassily Leontief.

AWS estimates that between 2018 and 2029, it will have pumped a total of R46 billion into its South African business, which includes the R30.4 billion investment to construct, operate and maintain its cloud infrastructure in SA over the coming six years.

The R15.6 billion investment from 2018 through 2022 includes all cash expenses directly attributable to the AWS Africa region, such as imports of proprietary equipment and software, and in-country spending, notes the report.

In April 2020, AWS opened its infrastructure region in SA, launching during a time when the country saw increased activity in the data centre space, and taking on US-based software giant Microsoft, which had opened two local data centre regions in 2019.

In March 2019, Chinese telecommunications giant Huawei started offering its cloud services in SA. In January 2022, US-based enterprise software company Oracle launched its data centres in SA.

Since inception, the AWS data centre has enabled hundreds of developers, start-ups and enterprises, as well as government, education and non-profit organisations, to run their applications and serve end-users in Africa, according to the company.

Today, AWS operates 96 Availability Zones within 30 geographic regions.

Impact beyond investment

In SA, AWS launched its first operational solar project in 2021, which contributes renewable energy to the electricity grid.

The firm says the solar plant is expected to generate up to 28 000 megawatt-hours of renewable energy per year, which equals the annual average household electricity consumption of over 8 000 South African homes.

The solar plant is majority-owned by black women and operated by a fully South African-owned company.

“AWS had long been committed to South Africa and this infrastructure investment adds to our ongoing local story, where one of our foundational capabilities – Amazon Elastic Compute Cloud – was developed by engineers in Cape Town back in 2006,” says Amrote Abdella, GM of AWS Sub-Saharan Africa.

“This report illustrates our ongoing commitment to invest in South Africa and support demand for our technology from customers here and around the world.

“The investment already has a ripple-effect on numerous local businesses, and has helped establish training and skilling programmes for the local workforce, supported community engagement through various initiatives, and created sustainability initiatives across the country.”

According to the impact study, the AWS ecosystem is expected to support an estimated annual average of more than 5 700 full-time equivalent jobs at local vendors in the South African data centre supply chain.

The jobs are being supported in many sectors across the data centre supply chain, such as telecommunications, non-residential construction, electricity generation, facilities maintenance and data centre operations, it says.

[PICTURE] Amrote Abdella

[CAPTION] Amrote Abdella, GM of AWS Sub-Saharan Africa.

The report indicates AWS’s total investment from 2018 to 2029 will contribute an estimated R80 billion to SA’s gross domestic product.

According to the Console Connect Africa Interconnection Report 2022, an estimated R100 billion will be invested in carrier-neutral data centres in Africa over the next three to five years.

This, as AWS, Microsoft, Google Cloud, Oracle Cloud and Huawei Cloud, among others, lay the foundations for a robust African hyperscaler market in SA.

In 2015, AWS opened an office in Johannesburg. In 2022, the company opened a second larger office in Johannesburg to support growing customer demand.

In terms of skills development, programmes like AWS Academy, AWS Educate and AWS re/Start have helped with IT skills training across the country, says the report.

SA currently has a critical shortage of all types of tech skills, including software development, systems analysis, technical/business architecture and business analysis.

AWS works with higher education institutions in SA, including Durban University of Technology, Stellenbosch University and the University of Cape Town, to help prepare the country’s future workforce.

“The ripple effect of this investment has allowed AWS to make demonstrable differences and lasting impacts in communities around the world where it builds and operates its data centres. This includes AWS InCommunities, which provides students and families with initiatives in science, technology, engineering, arts and mathematics, local tech upskilling and employee engagement,” says AWS.

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