Welcome to Top Shelf Tech. We are coming from lockdown in Auckland, so we're all probably feeling like we could get out and get a bit of fresh air today. But today what we've got instead is a chat with Dr. Haren Sam, who we've had on the show before talking about AWS reinvent. And today, we've actually got something really exciting to talk about. It's an announcement that you would have heard last week from AWS. Very cool for New Zealand and we'll go a bit deeper. So Haren, welcome on and just some exciting news out of AWS.

Yeah, absolutely. And Jeremy, thanks for having me back on the show. Always love joining this one and you're right. I'm like one could feel that you could go outside actually, right? With the weather looking pretty good today, at least, you know, I don't know how long it's going to hold it up, but yeah, we have some exciting news and super thrilled to be honest to really talk about the biggest investment AWS has made in New Zealand to date.

And it is, as we mentioned last week, it's really about the new infrastructure region, the New Zealand region within the AWS network that will be coming up. So AWS is investing $7.5 billion over the next 15 years in an infrastructure region in New Zealand. That's super exciting for us.

It is absolutely incredible. And I think it's really big numbers that we're talking about. And one of the questions that I've got is why now? We've talked about this for a while. We've had the local outposts that were announced last year as well.

Yeah. Great question. There are two main reasons. One, we are constantly listening to our customers, Jeremy, about what they want to do, how they want to work with databases and what their preferences are. And we've been hearing from the customers, there is a preference from a number of them that they would like to keep data on shore in New Zealand. And that's one of the reasons. And again, like you mentioned we have been here for eight years and we have actually invested in two full officers now in Auckland and Wellington early this year, we opened them up. We have two edge locations which we all started off last year.

So it's a continuation of that investment, the commitment that we actually have into New Zealand that's just going deeper and deeper. So this is just that momentum of moving forward with that level of commitment to the country and our customers getting the preferences they have. And I would probably just take a step back and explain what this really means. The region by definition in AWS terms is really a cluster of data centers that are organized as availability zones. A typical region consists of at least three availability zones. Each of them has one or more data centers under it. So it's really built for higher availability and with the highest level of security and data privacy as well. And what this also means is for customers in New Zealand, they actually can even get even better latency now in New Zealand.

Yeah, I think, a raft of options for companies we've got AWS outposts, we've got local zones that have been options like this for Kiwi companies. To have AWS in New Zealand, but now to get the full fleet data center experience you know obviously that's a lot simpler than in any of those other options.

So it really does just lend itself towards Kiwi businesses that want an easy entry point in wanting their data on shore.

Correct. That's right. And what it gives to the businesses here in New Zealand and startups, all large enterprises or public sector organizations, is that it gives access to 200 different services from AWS. From the public cloud, AWS cloud perspective, right? And these include things like not just the basic computing and storage, but also the more interesting things from analytics, artificial intelligence, and machine learning and the internet of things. So bringing all these breadth of services available locally, so organizations can now run applications and securely store their data locally in New Zealand as if they prefer to do so at an even lower latency across the country. And that's one of the key advantages we see in bringing this to Aotearoa.

I think that's probably one of the biggest changes that we've observed over the last 12 months is we've talked about the move from the cloud where people sort of move servers.

And it's always been this expectancy in this drive towards using serverless microservices and building apps on it and using data and analytics, IOT, these sorts of more platform orientated services. And, you know, from our perspective, we're really seeing the uptake of that from customers, the ability to tune things up very quickly, deploy experiments, get value from a platform and a very rapid sense. So as opposed to thinking about, I've got to build servers, I've got to manage servers. So I think that's, you know, that's a really cool thing for Kiwi businesses to have that right on their doorsteps.

Yeah, absolutely. And, and yeah, we are always excited to see the level of ambition businesses and local businesses have. We are always looking at building for the world and meeting customers here in New Zealand. So, yeah. So I'm excited to see that ambition local businesses have to find new products, launch new products and services, or to find new business ventures.

And what this brings to most of the businesses that use the cloud would be to look at the ability to innovate rapidly and in doing so minimize the cost of actually the experimentation by going to the cloud, right? That's a big part of that. And the ability to really start off things, try things out, shut them down if it doesn't work, learn from those experiences and move forward. That's opening up a list of different opportunities from new products and services, the base to like to reduce cost overall in the business operationally. So that's a big part of it. When we look at the investment, we project this will bring about another thousand jobs into the country. This is equivalent to another thousand jobs in the country. Plus it is estimated at about $10.8 billion into the GDP incrementally.

At least a thousand jobs. So let's talk about those for a moment. You don't need a thousand people to run a data centre, to build regions. Where do those thousand jobs come from?

That's true. I think it's a combination of everything that comes into what we require around data centres, to people who are supporting others to innovate and build on data plus cloud, and also the supporting industries like suppliers to construction to utility services that we'll be using for the infrastructure of the region. So it's a combination of all of these things put together.

Awesome. 2024 is the date that we've heard. AWS tends to not announce things that far in advance. Now, obviously this is a big program of work. What happens between now and the point that these data centres get launched?

Yeah, multiple things. We made the decision to announce because we felt the customers were looking for that. There's a preference from customers who want to keep some of the data onshore. So we felt it was the right time to make that announcement on the back of the fact that we've been here for a while. We have actually opened up offices and all these things that combine. On the other hand, customers don't have to wait. There's a lot of other things, like you mentioned, there are different options and different services from AWS that you can utilize if you want to keep data locally.

But more than that, tens of thousands of customers in New Zealand who are actually using AWS services, using regions in Sydney and other parts of the world to service their customers. So we do encourage customers, you can always talk with your journey to the cloud now, if you have not done so. And by doing so you can unlock innovation in the organization. You can actually reduce operational costs and it adds to the economic growth of the country. And that's part of that.

The other part of that is really, we are doing a lot of work around skill development in the market, there is a significant challenge for businesses here in attracting and actually retaining technical skills in the workforce, especially given that we have closed the borders, et cetera.

So we are doing a lot of programs at the moment generally to really try and build up that skill level. We launched a couple of them recently, like AWS restart, which is specifically targeted at those who are unemployed or in between roles. And that's a program where it's actually building up their cloud technical skills and making them ready for the new generation of skills out there in New Zealand.

This is specifically targeting Maori and Pasifika communities because we find them underrepresented in the technology industry here. So we started off in Auckland. The second batch is starting off in Christchurch now so we are expanding that program.

We participated in that first round. It was fantastic. We had five interns in our office for a couple of weeks. And yeah, from our perspective, we do see the skill shortage we see that it's very difficult to pathway people in quick enough. So we felt the restart program was a great way to give us sort of that three months of very rapid upscaling, get them into a real work environment and try to open up a totally new pathway for people to come into building cloud services, deploying cloud and managing cloud.

Absolutely. And you raise a good point because it's the partners like you actually help to really execute most of these things and help other customers to really adopt the cloud and the services around that, that they can benefit from. So in terms of the partner ecosystem, you have the likes of The Instillery. Like you guys were really supporting our customers and ecosystem as well, and the app capability as part of it. So all these are part of the activity that we are doing right now.

One of the things that I would have probably said a few years ago is that the data sovereignty issue had kind of gone. You can encrypt your data, you can manage it, secure it very carefully, wherever it is, but we've seen a little bit of a swing back in that regard, I think with the introduction of the Ozzy backdoor law as it's called, how much was data sovereignty a factor in the decision to invest in data centers and regions in New Zealand?

Yeah. What we are hearing from customers is there's a preference from them to sometimes hold data onshore for different reasons. Sometimes it is to do with some of the sealed requirements around that. But it's a preference and that's what we are listening to. And we felt actually more than just that part. There's a lot more benefit for the customer with even lower latency capabilities that we can provide by having infrastructure on the ground. I've seen the investment we have made in New Zealand work better for our customers. So we thought let's continue on that part. So to answer that question it's not directly related to that. Although we heard from the customers that they have a preference and we listened to them in making this announcement.

Yeah, that's awesome. Hey look, thanks a lot for joining us again today. It's a year of really exciting news to see the growth and investment coming into New Zealand. I think you mentioned it has been eight years of investment from AWS. I think you're at a few hundred people now.

Yeah, definitely over a hundred people. We have hired quite a lot of people over the last 18 months. And we have offices and keep on expanding the workforce as well. So we are super excited to work with The Instillery, as well as our partners and customers, to really try and support and make an impact on the economy of New Zealand and really take New Zealand to the world. 

That's awesome. Awesome. Hey, thanks a lot again for joining us today and in discussing this announcement and we look forward to seeing what comes next.

Absolutely super excited. Thanks. Thanks again for having me really appreciate that.