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2017 is shaping up to be a big year for cloud giant Amazon Web Services (AWS) in the Nordics with a brand new dedicated office in central Stockholm and plans to open the company’s first datacentres in the region in 2018.
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Darren Mowry, managing director business development EMEA, told Computer Weekly about AWS’ Nordic ambitions and the region’s booming startup scene.
AWS has been gradually growing its Nordic presence ever since it opened a point-of-presence (POP) in Sweden in 2011.
Its first local offices were opened in 2014, and it expanded into neighbouring Finland the following year. Both are now set to get major boosts from three data hubs – also known as availability zones – slated to open in Sweden in 2018, which will offer low latency connections and data storage close to home for AWS Nordic customers.
Consequently, Mowry expects to carry out more regional recruitment over the next 12-18 months than ever before, although he couldn’t give hard numbers. For him, the datacentre announcement, which was made in April, is a testament to the growing significance of the Nordic region.
While AWS has not disclosed the size of its investment, its CEO Andy Jassy told Sweden’s Di Digital that, over time, it could rise to billions of dollars if the new region is successful.
The company currently operates 42 availability zones, including its latest launch in London, across 16 geographical regions.
With its Nordic data hub plans, AWS joins other global tech names in the region, including its close competitor Google, with a datacentre in Finland, Apple in Denmark and Facebook in Sweden. But instead of going for the cool climate of northern Sweden, like Facebook, AWS has chosen to focus on the country’s capital region. AWS’ three data facilities will be located in the outskirts of Stockholm in Västerås, Eskilstuna and Katrineholm.
“The reason why we centered on Stockholm is there was enough customer demand to want more of what we would call a metropolitan region,” says Mowry. “There are financial services customers, even gaming customers, which really push the limits of technology. They need extremely low latency and high performance.”
The company doesn’t give out details about its infrastructure, but says a typical availability zone hosts at least one datacentre and between 50,000 and 80,000 servers. Each of its regions has multiple availability zones to avoid any single event knocking everything offline.
The plans for its Swedish region have been 1.5 years in the making. AWS cites high connectivity, a talented workforce and access to green energy as the key reasons behind the move, but the decision was pivoted around customer feedback. Currently, the company’s Nordic customers rely on its other infrastructure regions and one concern, particularly for highly regulated industries, has been data sovereignty.
“Having these three different availability zones in Sweden allows companies to pick these locations, put their data in those locations and never have the data leave the country,” says Mowry.
Another driver for AWS’ datacentre investment – and its initial interests in the Nordics – is the region’s robust startup scene. According to Creandum’s Nordic Exit Analysis 2016, the Nordic countries represent over 7% of global billion dollar tech exits since 2005 (with Sweden as the top performer by a wide margin), while accounting for only about 2% of the global GDP.
AWS has placed particular interest on gaming, and today counts companies such as King, Minecraft-creator Mojang and Supercell among its customers. Another Nordic stronghold is fintech.
“London claims to be a fintech hub and I would say it is, but it is impressive yet again for a small area of the world to really be competing with London,” says Mowry. “You have the Bamboras and iZettles of the world and these companies are built 100% on AWS.”
Working closely with startups
Mowry has worked closely with startups ever since he moved to Stockholm in 2014 to run AWS’ Nordic and Baltic operations. In fact, Mowry’s recent appointment as AWS’ new head of EMEA was partly due to the startup programme he has helped to develop in the Nordics and is now scaling up across the company.
The programme targets early-stage startups. Further to offering investment and credits to offset the cost its platform, AWS provides architectural assistance. The company’s architects are deployed onsite to provide advice on cloud strategies.
In the startups’ later stages, this technical assistance is expanded to business mentoring, such as marketing and recruitment advice, and in the end with go-to-market support through AWS’ own marketplace or its parent company’s retail channels.
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The expanded support is not a benevolent move, as the benefit for AWS is clear: cultivate growing cloud customers. Mowry is not revealing numbers, but says “thousands” of Nordic startups use AWS.
“We believe winning a startup early is important because we find they tend to stick with the cloud operator they pick at the beginning,” he says. “If our customers grow and succeed, attract more customers, sell more of their software and their products, their use of the cloud grows.”
Despite the Nordics’ startup success, one of the most interesting recent market shifts has been on the enterprise side.
“When I moved to Stockholm, there was enterprise adoption, but it was largely a gaming and startup hub,” he says. “There are two things. For one, more enterprises actively leveraging the cloud is a big shift. But more so, and probably even more exciting to me, is what they are doing with us. It’s not like they are using us for virtual machines or storage.”
An example Mowry gives is Swedish locking specialist Assa Abloy, which uses the cloud to power a hospitality service that allows hotel guests to check-in via mobile phone and use their device as the room key. Another industry giant, truck manufacturer Scania, is using AWS to connect its truck fleet to the cloud and to enable real-time running data collection and diagnostics.
“The US is a very innovative culture, but I’ve been very impressed with the speed with which enterprises in the Nordics are able to move as well as their willingness to experiment and even fail,” he says. “I would say culturally that’s very unique, very interesting and allows them to move more quickly.”
But although Finland, Sweden and Denmark top EU statistics on cloud computing, not everyone has embraced it. Six years ago security was a key topic, but today the issues are different.
“It’s important the security discussion has evolved to regulatory and compliance,” says Mowry. “Regulation is very big. I wouldn’t say it’s a blocker, but it’s where we sometimes pause and need to work through that.”
Lack of skills for cloud adoption
Another challenge Mowry points to is the lack of skills for cloud adoption, especially in established organisations with more traditional IT architecture. But he argues challenges are made to be solved.
“I don’t think we have even begun to see what’s going to happen in the enterprise space,” he says. “I think it is just day one in the enterprise space overall, but especially in the Nordics it is just starting to get going.”