Will Amazon build an AWS cloud server farm in Israel?
Other cloud providers like Microsoft, Google, IBM and Oracle have also been invited to submit bids.
By ZEV STUBThe logo of Amazon Web Services (AWS) is seen during the 4th annual America Digital Latin American Congress of Business and Technology in Santiago(photo credit: IVAN ALVARADO/REUTERS)
Could Amazon be considering setting up a massive cloud server farm in Israel?Industry sources say Amazon is a leading contender for the Israeli government’s massive Nimbus cloud-based data center project, which would move much of the government’s IT infrastructure to the cloud. Only the world’s largest cloud service providers have been invited to submit bids for the tender, which will be worth hundreds of millions of dollars.Amazon Web Services (AWS), a subsidiary of the online retail giant, is by far the world’s largest cloud company, with an estimated 47% of the entire cloud market in 2019. Other cloud providers such as Microsoft, Google, IBM and Oracle have also been invited to submit bids.Cloud computing is a flexible service model in which different computing resources, such as infrastructure, platforms and software, can be distributed over multiple locations from central servers. Until now, the government has been using Microsoft’s cloud computing service, although the current infrastructure is considered to be far below the global standard.In 2014, the government decided to transfer the IT infrastructure of its ministries and units to cloud computing, and the Nimbus tender was published last year.The Finance Ministry confirmed that bids for the tender were submitted this week, and that the review process should be completed by the end of March. The ministry declined to offer any information about the bidders.Insiders believe that selecting Amazon could provide significant benefits for the Israeli economy beyond the government project itself. Amazon currently operates 26 server farm “regions” around the world, and building a 27th in Israel would open up new doors for innovation and investment as well as new employment opportunities.“This project is an extraordinary opportunity for Israel and for its economic recovery from the pandemic,” according to Itai Green, a corporate open-innovation consultant. “The entry of Amazon into the Israeli market would result in direct and indirect investments of billions of dollars, and will impact Israel’s economy, as well as government services and the quality of services provided to citizens, for years to come.“We live in a technological world,” he said, “and today, AWS is the global leader in both technology and investments – and working with Amazon will allow Israel to continue to lead as a hi-tech powerhouse.”There is significant pressure to select a provider that will offer the highest level service to the nation over the long term. An inferior provider offering poor services would be considered a disaster for the nation’s technological capacity. The Nimbus system would be used to house huge amounts of sensitive data for government institutions and ministries, improving efficiency and reducing bureaucracy.
For security reasons, the Israeli data center would have to operate independently of any other cloud service region in the world, with the capacity to provide all the nation’s long-term needs. Amazon is also seen as being prepared to make a much larger investment in Israel’s infrastructure than any other competitor.The cloud field has been growing rapidly around the world in recent years, and the Jewish state is seen as ripe for a boom in server farms. Israel’s data needs are skyrocketing, and its current infrastructure is seen as lagging.Government investment in large infrastructure projects is a standard part of the playbook for pulling an economy out of a recession, so the success of the Nimbus project would be seen as a big win for the country.Amazon signed a $30 million agreement with Israel’s AllCloud last month to boost its presence in Israel ahead of the tender. Additionally, Green said, Amazon has been negotiating with Israeli real estate companies to set up a data center here.Microsoft and Oracle both announced plans last year to build server farms in Israel, partly in preparation for the Nimbus tender. Oracle’s plan reportedly includes an underground data center in Jerusalem.
