Amazon (NASDAQ:AMZN) is strengthening its global dominance in the cloud computing arena through the continuous expansion of Amazon Web Services (AWS). A clear demonstration of this is AWS’s recent launch of its second infrastructure region in Canada, situated in Calgary. With this move, AMZN has established itself as the primary cloud services provider in Western Canada.

The AWS Canada West (Calgary) Region features three availability zones, providing AWS with the capability to deliver low-latency services and grant access to its comprehensive cloud services portfolio, including AI, machine learning, data analytics, and the Internet of Things, to customers.

This region enables customers to seamlessly run critical workloads and securely store data within Canada. Amazon anticipates that this strategic step will garner attention from both large and small businesses across the country.

Notable AWS customers in Canada include Bell Canada, BlackBerry, Calgary Sports and Entertainment, CI Financial, Keyera, Kidoodle.tv, KOHO Financial, Maple Leaf Sports & Entertainment, the National Hockey League, Natural Resources Canada, and the University of Calgary.

This expansion is part of Amazon’s broader investment initiatives in Canada, with AWS planning to invest approximately $17.9 billion in the country by 2037, covering both the new region and the existing AWS Canada (Central) Region in Quebec.

Increasing Regions & Availability Zones

In addition to the AWS Canada West (Calgary) Region, Amazon has introduced AWS Local Zones in Toronto and Vancouver. The company’s focus on expanding AWS Regions in Europe remains strong, with operations in seven AWS Regions and 21 availability zones across Frankfurt, Ireland, London, Milan, Paris, Stockholm, and Zurich.

The Asia-Pacific region is also a target for AWS’s growth. It plans to launch an AWS infrastructure region in Malaysia, committing to a $6 billion investment by 2037 to support job creation in the country. Earlier this year, Amazon inaugurated a new infrastructure region in Melbourne, Australia, marking its second region in the country. Additionally, AWS recently launched an infrastructure region in Israel (located in Tel Aviv), known as the AWS Israel (Tel Aviv) Region.

Currently, AWS boasts 105 Availability Zones across 33 geographic regions, with plans to introduce 12 more Availability Zones and four additional AWS Regions in Malaysia, New Zealand, Thailand, and the AWS European Sovereign Cloud.

Key Prospects, Competitive Landscape

The continued expansion of regions and availability zones globally is expected to drive customer momentum for AWS, enhancing its financial performance and positioning Amazon to capitalize on the opportunities in the global cloud market. This expansion is likely to instill optimism among investors in the short term.

In the third quarter of 2023, AWS reported revenues of $23.1 billion, constituting 16.1% of total sales, and exhibiting a year-over-year growth of 12.3%. Our model estimates project AWS revenues for 2023 at $92.8 billion, reflecting a growth of 15.8% from 2022.

Amazon’s shares have experienced an 83.2% gain on a year-to-date basis.

Furthermore, Amazon’s aggressive expansion efforts are anticipated to fortify its competitive standing against formidable peers like Microsoft (NASDAQ:MSFT) and Alphabet’s (NASDAQ:GOOGL) Google. Both Microsoft and Google are actively pursuing strategies to enhance their presence in the dynamic cloud market.

Microsoft Azure, a key driver for Microsoft, is witnessing robust adoption, and the expansion of Azure’s availability zones and regions globally is expected to sustain Microsoft’s cloud momentum in the near term.

Similarly, Google Cloud significantly contributes to Alphabet’s total revenues. Alphabet’s expansion of data centers, availability zones, and cloud regions is poised to further strengthen its position in the cloud industry.

However, AWS, with its continually evolving global infrastructure, maintains its dominant position in the cloud market. According to the latest data from Synergy Research Group, AWS captured 32% of the global cloud infrastructure services market in the third quarter of 2023, reinforcing its leading position. Microsoft’s Azure, the second-largest cloud service provider, held a 23% market share, while Alphabet’s Google Cloud secured an 11% share, making it the third-largest cloud provider.

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