Amazon.com Inc. (AMZN) recently announced the launch of its cloud-based storage service from Amazon Web Services (AWS) in Australia, thus further expanding its data centers in the Asia-Pacific region.
Amazon now has nine data centre hubs across the world and three data centers in the Asia Pacific for AWS. Management stated that over 10,000 customers in Australia and New Zealand were already using AWS and the launch of this new cloud computing platform will further expand the AWS consumer base in the region.
The new Australian data center will provide customers access to services including EC2, Amazon RDS, Amazon CloudFront and S3. Additionally, management also plans to open a local technical support operation in Australia next year.
Earlier, companies incurred significant costs to build their own infrastructure for data storage. They had to make a substantial payment upfront, after which they would invest further to purchase additional storage space anticipating growing backup demand. This resulted in under-utilized capacity and unnecessary expenses. With Amazon’s cloud-based storage services, companies now do not need to waste time and money on managing their own data centers.
Cloud storage came into prominence in 2009, with Nirvanix and Amazon's Simple Storage Service (S3) being two of the major pioneers. Since then, Amazon has continued to dominate the space, with other players like Rackspace (RAX) and Microsoft (MSFT) offering their own solutions.
Amazon serves developers through AWS, which provides access to technology infrastructure that developers can use to enable various types of virtual businesses.
The company is expanding AWS internationally and investing heavily in technology infrastructure to support rapid growth. We remain extremely positive about AWS’s growth prospects and expect Amazon to remain one of the leading players in the fast-growing ecommerce market.
In the recently reported third quarter, the company suffered a huge loss of 60 cents due to its investment focus. Though these investments are impacting near-term margin and earnings growth, Amazon is expected to benefit in the long term as there is significant growth potential in both domestic as well as international markets.
Currently, Amazon has a Zacks #4 Rank, which implies a Sell rating in the near term.
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