Amazon Data Center Tally Tops 900, Documents Show

Key Concepts

• Datacenters: Facilities that house computing infrastructure, including servers, storage, and networking equipment.
• Cloud Computing: The delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.
• Co-location Facilities: Datacenters where a cloud provider rents space, power, and cooling for their own equipment, rather than owning the entire facility.
• Leased/Co-leased: Refers to Amazon Web Services (AWS) renting space or sharing space within third-party datacenters.
• Speed to Market: The ability of a company to launch a product or service quickly.
• Ramp of Demand: The anticipated growth in customer usage and resource needs in a particular market.

Amazon's Datacenter Footprint and Co-location Strategy

This discussion highlights the immense scale of Amazon's cloud computing operations, specifically focusing on their significant reliance on co-location facilities. While Amazon is known for owning and managing large datacenters, the transcript reveals that they also own, manage, lease, or co-lease approximately 900 datacenters globally. This figure underscores the sheer magnitude of their cloud infrastructure.

A key point emphasized is that most cloud computing companies are not transparent about the exact locations of their facilities, and even less so about where they rent space. The reviewed documents indicate that as of last year, about one-fifth of AWS's computing power was provided by co-location facilities. These facilities are distributed worldwide, with hundreds of them in operation.

Rationale Behind AWS's Extensive Use of Co-location

The transcript explores the reasons behind Amazon's substantial investment in third-party, co-location datacenters, beyond their owned and operated facilities. Two primary drivers are identified:

1. Flexibility and Managing Demand Uncertainty: When establishing operations in a new market, AWS may not be confident about the projected demand. In such scenarios, renting space in co-location facilities provides them with options and flexibility. This allows them to scale their presence without the immediate commitment of building their own infrastructure.

2. Speed to Market: Co-location offers a faster route to expand operations in specific regions. For instance, expanding in Singapore by renting space can be significantly quicker than the process of acquiring land and developing a datacenter from scratch. This is particularly crucial for AWS to quickly serve customers in new or rapidly growing markets.

The transcript suggests that this co-location strategy is particularly prevalent internationally, indicating that a significant portion of their leased space is utilized outside of their primary markets.

Conclusion

The transcript reveals a critical, often undisclosed, aspect of Amazon's cloud computing dominance: their extensive use of co-location facilities. With approximately 900 datacenters involved in their operations, and a substantial portion of their computing power derived from rented space, AWS demonstrates a strategic approach to infrastructure expansion. This strategy prioritizes flexibility, especially in new or international markets, and accelerates their speed to market, allowing them to respond effectively to fluctuating demand and capitalize on growth opportunities.