Amazon doubles NZ staff, moves into larger digs

Amazon Web Services has hired 50 local staff in the past year, taking its total complement to more than 100, AWS NZ managing director Nick Walton said today.

Walton made his comments as AWS opened its new Auckland office today, over two floors of the PwC Tower at Commercial Bay (whose two top floors are occupied by local game studio Rocketwerkz, making it something of a mini tech hub in the making).

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The fully-owned Amazon subsidiary was previously at the GridAKL shared office space at Wynyard Quarter.

Walton said the growth over the past year came through signing marquee new clients including Vodafone and the University of Auckland, who have both adopted AmazonConnect – AWS’ virtual contact centre solution – as the pandemic scattered staff. BNZ and TrustPower had also adopted the new platform, with the latter “spinning up a virtual call centre in 10 days” according to Walton.

Historically, the three big cloud platform players – AWS, Microsoft and Google – have served New Zealand from data centres in Sydney. Microsoft broke from the pack last year, announcing it would build New Zealand’s first hyperscale (that is, giant) data centre in northwest Auckland – in fact, three of them. Construction is already underway in the city’s northwest. Microsoft joints half-Infratil-owned CDC Data Centres – Microsoft’s close partner in Australia – which is spending more than $300m on a possibly related server farm build in the same area.

And recently, in a landmark film subsidy deal brokered by Economic Development Minster Stuart Nash, Amazon promised to explore investment opportunities in NZ.

Walton said he could only speak for his division of Amazon, not its Prime Video studio and streaming service or its e-tail operation, who both have offices across the Tasman (inflating Amazon’s Australian staff to around 2000).

But he could field the headline question of whether Amazon will follow Microsoft by building its own server farm in NZ.

There are no immediate plans.

But Walton does point to two recent partnerships that have seen Amazon hardware on NZ soil, albeit with its servers’ installed in customer’s data centres. The AWS NZ boss calls them “outpost” installations.

One is an AWS Edge installation for TVNZ that helps state broadcaster and Spark Sport partner with its streaming efforts. The solution means “you’ll never miss a wicket”, Walton says (perhaps a tad optimistically. Like its peers, Amazon has a very high but not perfect uptime record).

The other is a strategic alliance with lines company Vector to develop a “New Energy Platform” (NEP) that can rapidly analyse data from some 1.6m smart meters and other “internet of things” (IoT) devices. Walton says the partnership has created 30 high-value jobs between Vector and AWS, and that the NEP platform could be saleable overseas. For now, the project – first announced in July last year – is still in its early days.

And Walton also pointed to AWS’s “Activate” programme, which sees some US$1 billion in free services offered to startups worldwide. Each startup can get up to US$100,000 of free services, training or consultation.

Exhibit A for Activate was fast-growing Sharesies. The retail trading platform’s co-founder Leighton Smith told the Herald that Activate was a key reason the startup plumped for AWS. It had helped with the company get off the ground and ride the pandemic boom in day-trading as 250,000 Kiwis embraced the platform. And it’s helped Sharesies to qet quickly established across the Tasman in the New Year Smith said, where it has already signed 5000 users.

AWS is also using the Peter Beck-backed smart cow startup Halter, as an Activate case study.

Amazon might not be a local company, but through initiatives like Activate and its global app marketplace, it would help NZ company’s reach the rest of the world, faster, Walton argued.

And Mayor Phil Goff speaking at the opening, said Auckland needed tech companies like AWS to be a world-class city, and more so at a time when the pandemic had robbed it of the cruise ship industry and international student numbers were down to a third of their normal levels.

AWS and partner Deloitte have gained high-profile worth with the Ministry of Health on the implementation of the NZ Covid Tracer App and (with Salesforce and others) the in-progress new National Immunisation Solution or NIH (in an example of the complicated, over-lapping nature of the IT industry, Orion Health boss Ian McCrae – a savage critic of the cost of the NIH – was on hand for the office opening, and Walton name-checked Orion as an AWS partner).

Walton could also reel off long-standing high-profile customers including Air New Zealand, Tainui Group Holdings, Eroad, Gentrack, Classic Builders and Xero, which hopped ship from Rackspace for AWS. (The Herald uses the Washington Post’s Arc publishing-as-a-service platform Arc, a series of containerised microservices that run on AWS.) All up, including SMBs and startups, AWS has “tens of thousands” of customers in NZ, the MD says.

Mayor Goff said he had “looked up” Amazon’s numbers before arriving and he was pleased to see its revenue had quickly expanded and that it was in hiring mode.

However, like many of the Big Tech companies, high expenses imposed by AWS NZ’s corporate parent means that while it is a big payer of local salaries, and growing, it is not a big payer of tax – at least locally.

AWS NZ waw its revenue grow from $19.4m in 2019 to $35.9m in 2020, according to a Companies Office filing.

However, the subsidiary’s “administrative expenses” also grew, from $20.2m to $37.8m, and it made a net loss of $2.6m for 2020. The prior year, it was $700,000 in the red.

AWS NZ had a security guard on duty at the entrance to its new office, who temperature screened every person who entered – part of a global Covid-safety initiative by Amazon.

The company has encouraged remote work for its white-collar staff during the pandemic but is now in the process of corralling staff back into the office – for at least part of their week – in countries where the coronavirus has been brought under control.

You can’t beat a face-to-face environment for intense, creative problem solving, Walton says.

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