Amazon stepping up cloud rivalry with Microsoft

Amazon.com Inc is expanding its presence in the emerging tech hub of Cape Town, upping the ante in its regional battle with cloud computing rival Microsoft Corp. Amazon will be the sole tenant in a new, modern eight-storey office building that’s nearing completion in the South African city, multiple sources familiar with the project said. The company is advertising dozens of jobs in Cape Town, which played a key role in the early development of its Amazon Web Services (AWS) cloud-computing business.

The adverts include one for a software development engineer that says Amazon is assembling a team for a “green-field project” dealing with machine learning, big data analysis and cloud computing, which are among the fastest-growing areas in the technology industry.

The company’s expansion shows how fierce competition in the cloud business and rising demand for computing power are driving activity even in relatively undeveloped corners of the technology universe.

AWS is the global leader in cloud computing with 32 per cent of the market, versus 16 per cent for second-placed Microsoft in the first quarter of 2018, according to research firm Canalys. Microsoft has been growing faster.

The global cloud infrastructure services market was worth nearly $55 billion in 2017 and is expected to exceed $155 billion by 2020, Canalys said. AWS accounted for 73 per cent of Amazon’s $1.9 billion operating profit in the first quarter, but just 11 per cent of its revenue.

Amazon’s new Cape Town building is due for completion in August, according to a source familiar with the matter. It sits near an existing Amazon technical centre and customer support operation.

Amazon did not offer details about the new building in Cape Town, or what its function might be.

“As more South African customers and partners continue to choose AWS as their cloud provider we continue to hire more staff into our offices in Cape Town and Johannesburg,” Geoff Brown, AWS’ Subsaharan Africa regional manager, said in a statement.

In another sign of Amazon’s cloud-computing drive in South Africa, it is offering start-ups free cloud trials for one year, according to local entrepreneur Tumi Menyatswe — a deal that prompted her to switch to AWS from Google’s cloud.

“This allows me to focus on my business and to grow until I can pay them,” said Menyatswe, CEO of two-year-old business Minderz, which pairs pet owners with people able to look after cats and dogs during holidays.