Amazon is set to open New Zealand’s first cloud data center in 2024, providing jobs and support for local business and startups. This is likely in response to the growing reliance on cloud computing during the COVID-19 pandemic, with forecasts from GlobalData predicting that cloud data traffic will increase from 88% of all data traffic in 2016 to over 95% by the end of 2021.

GlobalData’s latest report, “Thematic Research: Technology - Data Centers Report 2020,” reveals the global data center market is set to double in the next 10 years from $466 billion in 2020 to reach $948 billion by 2030, growing at a compound annual growth rate (CAGR) of 6.7%. Much of this market expansion will come from building more hyperscale data centers to support the high levels of throughput and performance efficiency required by big tech companies, like Amazon.

“The company’s move to construct a new cloud unit in New Zealand is unlikely to be an isolated project, as this type of data center could well become increasingly essential for Amazon to support the size and scale of its day-to-day operations,” said Rachel Jones, thematic analyst at GlobalData.

As a result of the pandemic, the internet has become a lifeline for many businesses, facilitating the use of collaboration software and enabling remote work. This has boosted demand for cloud-based services, with businesses becoming increasingly reliant on data centers. 

“The pandemic has demonstrated the vital importance of cloud data centers for business activity to the point where they could now be regarded as an essential utility, alongside water, electricity, and gas,” Jones said. “Data centers are vital in supporting and sustaining people’s everyday life and Amazon’s project has the capacity to help to improve network availability for the local population.”

Amazon’s New Zealand cloud data center will create 1,000 jobs by 2034, both in the construction and operation of the center once it opens in 2024.

“The construction of hyperscale data centers globally will continue at a steady pace as demand for data capacity grows,” Jones said. “GlobalData predicts that hyperscale data centers will represent 53% of all data center servers by the end of 2021, with their construction continuing to support local economic growth through job creation and enhancing network availability in rural areas.”