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Amazon’s Strategic Expansion in APAC with New AWS-Australia PartnershipAmazon’s Strategic Expansion in APAC with New AWS-Australia Partnership

Throughout the financial markets, Amazon’s (AMZN) trajectory this year has painted an impressive picture, with shares soaring 31.2% year-to-date. Such exponential growth has far outpaced the Zacks Internet Commerce industry’s 22.4% return. At the heart of this resounding success lies the titan’s cloud computing sector – Amazon Web Services (“AWS”), a force to be reckoned with.

Fortifying Global Presence Through Strategic Partnerships

In their latest strategic move, Amazon has struck a monumental partnership with the Australian government to construct the ‘Top Secret’ AWS Cloud (TS Cloud). This groundbreaking initiative aims to bolster Australia’s defense and intelligence agencies by providing a secure platform for the hosting of sensitive information, amplifying the country’s cybersecurity capabilities, and fostering deeper security cooperation with the United States.

The commitment is substantial, with the Australia government pledging AU$2 billion ($1.3 billion) over the next decade to bolster this innovative cloud system. Amazon will erect three facilities within the country as part of this agreement, setting the stage for a seamless exchange of classified data between Australia’s National Intelligence Community and the Australian Defence Force, enhancing the nation’s security posture through cutting-edge AI and machine learning technologies.

Gateway to the Asia-Pacific: A Lucrative Expansion

Amazon’s footprint in the Asia-Pacific (APAC) region has profoundly strengthened through this latest endeavor. Industry forecasts predict a robust 15.1% Compound Annual Growth Rate (CAGR) for the cloud market in APAC between 2023 and 2030, with Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS) gaining substantial traction.

Amazon’s strategic positioning places it in a prime position to leverage this growth surge, with plans to inaugurate an AWS infrastructure region in Taiwan by early 2025, and in the Kingdom of Saudi Arabia by 2026. The tech giant also has its sights set on Malaysia and Japan, aiming to infuse significant investments to fortify its cloud infrastructure across these regions – a clear sign of Amazon’s ambitious foray into untapped market potentials.

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Furthermore, Amazon’s strategic push into Bangkok, Thailand, and Auckland, New Zealand, with expansion plans in Israel’s Tel Aviv Region, cements its commitment to establishing a robust presence across diverse APAC territories.

Industry Rivals Amass for the Race

Amazon’s foray in APAC isn’t without competition. Tech behemoths like Microsoft (MSFT), Alphabet (GOOGL), and Alibaba (BABA) are all scrambling to expand their foothold in the region. Microsoft, for instance, is eyeing the opening of five data centers across APAC, with plans for a Saudi Arabia Central region in the pipeline.

Alphabet’s Google, not one to be left behind, has strategically placed data centers in key locations such as Japan and Singapore, while Alibaba’s cloud market expansion across Singapore, Australia, South Korea, and other APAC nations underscores its aggressive push in the region.

Looking Ahead: A Promising Future for Amazon

Amazon’s robust standing in AWS, propelled by a burgeoning clientele, an extensive partner base, and a global reach, sets the stage for long-term prosperity. With a strong focus on cutting-edge AI applications and widening capabilities in various sectors like grocery, pharmacy, healthcare, and autonomous driving, Amazon’s future prospects shine bright.

Investors take note – Amazon currently boasts a Value Score of B, making it an enticing prospect for those seeking growth potential and stable returns in the ever-evolving tech landscape.

Zacks Investment Research