- While AWS is expanding its ASEAN footprint, in-country regions can be important to capture high-growth domestic opportunities.
- Its custom and modular approach offers higher performance and reliability, but also enables cost savings through better resource management.
AWS has shared with analysts its capabilities and some details of its infrastructure design, including the data centers, networking, and server equipment that make up each of its regions.
Globally, AWS has 81 availability zones across 25 regions in 19 countries, comparable with other major cloud providers like Microsoft Azure and Google Cloud and ahead of niche players and market challenges such as Alibaba Cloud, Tencent, Oracle, and IBM. Each of its regions has two or more availability zones, with newer ones consisting of at least three. Each availability zone has multiple data centers to offer high availability and performance. This is not new and has been a common approach by some leading global hyperscalers. AWS has also been using a modular approach for its data center (a.k.a. Amazon Perdix) for over a decade. All the availability zones are interconnected through its own metro fiber network. It also uses cutting-edge 6912-fiber-count cables in its network.
In ASEAN, despite having only one region in Singapore (with three availability zones), AWS has been expanding its overall infrastructure in the region. In the last two years, it added edge locations in Thailand and Indonesia and launched AWS Outposts across all its key locations in the region (Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand). AWS also plans to launch its second region in ASEAN in Jakarta, Indonesia by the end of the year. Furthermore, it has a wide range of solutions (AWS Outposts, AWS Wavelength, AWS Snowball, AWS Snowcone, and AWS Snowmobile) to address diverse edge computing needs.
AWS uses customized hardware for its network and servers. The custom Broadcom Tomahawk ASIC routers shorten resolution time from months to days while its purpose-built compute server provides higher thermal and power efficiency. AWS also developed AWS Nitro System, a modular platform based on dedicated hardware and software that powers EC2 instances. Like other technology giants (Apple, Samsung, Google, Microsoft, and Alibaba), AWS also developed its own ARM-based chipset, known as Graviton2 (second generation), and is one of the first providers to use it in its cloud data centers. Graviton2 leverages the Nitro security chip for added protection and enhanced performance on both hardware and software layers.
AWS – New Regions to Address Data Sovereignty and Latency: In ASEAN, while AWS is expanding its footprint and presence (e.g., through partner programs), competitors are moving fast to gain an edge in this untapped market. Besides Singapore, which houses most cloud players’ regions as the APAC hub, Google launched its region in Indonesia last year while Azure plans to open new facilities in Indonesia and Malaysia. Alibaba Cloud has regions in Malaysia (2017) and Indonesia (2018), and it plans to open a new one in the Philippines. Tencent, a market challenger, opened data centers in Indonesia and Thailand recently.
AWS is still seen as the leader in the public cloud market, but it could consider expanding its footprints in ASEAN to further capture opportunities, especially from enterprises with data sovereignty and low-latency requirements. There is a significant increase in cloud adoption in the region, accelerated by the current pandemic. A GlobalData study with 158 ASEAN cloud decision-makers early this year shows that enterprises planned to migrate more data and applications to cloud from an average of 23% of their total workload in 2020 to 33% by the end of this year. While AWS’ solutions such as AWS Outposts and AWS Wavelength can be positioned to address some use cases such as data residency and low-latency applications, in-country data centers are crucial to address the overall cloud demand. Two thirds of the enterprises also indicated that hosting in local facilities is an important criterion when considering cloud services. Furthermore, the governments across the region are also driving more initiatives for cloud adoption in both public and private sectors.
Enterprise – High Performance and Reliability with Lower Barrier of Entry: Enterprises looking for high-reliability and performance infrastructure should consider AWS. While the ‘regions’ are limited in ASEAN, AWS has edge locations in most countries and can offer reliable connections to its hosting facilities through its Direct Connect partners. The multiple data centers and availability zones provide higher reliability, especially when compared to on-premises facilities, colocation, or cloud services hosted by domestic players . The active-active data centers can enable enterprises to run their applications across availability zones for higher fault tolerance. The continuous advancement of its infrastructure design through customization and a modular approach (e.g., for routers, servers, and processors) can enhance performance through high-speed networking and better processing power, memory, and resource management. It can also enable cost savings by providing resources at hardware and software layers tailored for the customer’s needs.
AWS also shared that Halodoc, an Indonesia-based health-tech player, claimed to achieve 40% better performance and 20% cost savings after migrating container-based workloads to Graviton2 instances. Supabase, an open-source app development platform provider, saw a 28% increase in performance and 10% lower cost after migrating its server workloads to Graviton2-based instances.
Overall, AWS has a solid infrastructure design that both addresses enterprises’ reliability and security needs and offers performance and cost benefits. It is also enhancing its capabilities to address customers’ diverse needs and expanding its presence in the region to widen its market reach. However, new in-country regions could be a lever for AWS to capture the overall cloud demand by addressing the local hosting need. It could also strengthen AWS’ market position, especially against other global hyperscalers who are aggressively expanding in the region.