Amazon Web Services currently stands as a leader in the cloud space with the strongest cloud infrastructure offerings. Many Canadian organizations large and small trust their complete infrastructure and applications to run on AWS and have been incredibly successful thanks to AWS. The platform has so much appeal that even organizations with regulatory or privacy concerns are still finding ways to run any workloads they can without stepping on the regulators toes.
Because of these concerns, Canadian organizations are continually asking when AWS will open a data centre in Canada. With the constant news around the Patriot Act and the PRISM scandal, there are many organizations who still need to keep their data on Canadian soil. You can read more in a recent ebook on the The Risks of Hosting in Canada. Coupled with that requirement, there are regulations and compliance requirements from the likes of healthcare and financials services industries, as well as government organizations, who have strict rules when it comes to where their data resides.
Today, if you want to use AWS, and you have these concerns, there are ways to architect solutions whereby you can comply with regulations and still operate on AWS. This could be hosting databases only in a Canadian centre and everything else on AWS, or marking the regulated data and retaining that in Canada, or using encryption. See this blog post for more ideas: 6 Ideas Using AWS to Beat Canadian Data Regulatory and Privacy Concerns. It’s important to note this concern only relates to regulated data, where there are many other workloads free of these requirements.
A data centre is a many hundreds of million dollar decision. With Canadian citizens and businesses being close enough to the Virginia, Northern California and Oregon AWS data centres or regions, what is the motivation for AWS to make that investment.
I argue why a region in Canada makes sense both economically and strategically.
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Data needs to remain in Canada for Compliance. Hosting data outside of Canada is a non-starter for many Canadian organizations including healthcare, financial services, municipal, provincial and federal governments. The list goes on. Regulation requires particular data to remain at rest in Canada. These regulations were written before the cloud and likely before the internet. They are not changing anytime soon and even if they did, often they are outdated before they come into practice.
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Data Privacy. Many Canadians are concerned about their privacy. Putting it mildly. They do not want the US Government’s hands on their banking, health records or personal information. In Canada we have privacy laws which protect citizens from certain abuses of their data called the Personal Information Protection and Electronic Documents Act. However if data is hosted in the US, the Patriot Act allows the US Government to request information from any US based host provider without a warrant, based on the suspicion of a national threat or terrorist activities.
Besides regulation, consumer facing organizations are driven by their customers fears, and are not motivated to host their data elsewhere if it will impact their bottom line. This is prevalent in the financial services business where consumers are concerned about their financial data, like tax returns and investment information, being exposed.
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Commercial Opportunity. There are thousands of businesses, specifically enterprise who based on the compliance and privacy roadblocks, will only host their data in Canada. AWS being the leading cloud platform, blowing up that road block will provide a clear path for these organisations to host their data in Canada. We don’t have an accurate survey yet but our analysis suggests two out of three organizations are very concerned about hosting their data outside of Canada. As the majority of this concern is found in larger organizations, removing it is a big deal and will be an economic boon to AWS. On top of removing this roadblock, a Canadian data centre would be challenging for the current providers in Canada to remain competitive. Because of the current circumstances, the host providers in Canada are relying on the resistance to host outside of the country, as a prime compelling strategy. Without it, they must rely solely on commodity and AWS is the champion in that area. The host provider industry in Canada is currently $4B Dollar business and growing rapidly with the migration to the cloud. AWS could dominate this market, and have a big part of that market share. From a competitive standpoint, one must include Microsoft and Google who are being asked and studying the same Canadian data residency questions.
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Data Closer to the US, but not in the US. Organizations who want to host their data on the North American continent due to low latency, or greater connectivity to their customers, but not in the US, for various reasons. It’s hard to say how many of these organizations there are Internationally, however there are many countries who feel the same way as Canadians about their data being under the prying eyes of the NSA. Canada is perfect for this, as the majority of the Canadian population is 50 miles from the US border, placing a data centre in any major region would be linked up the the extensive North American fibre network. This could provide a home for US Companies who are looking to keep their data outside of the US for various reasons. AWS does offer 4 other regions including Ireland, Singapore, Japan & Sydney to host their data. However, Canada is seen by the world as a peaceful country with strong laws, great infrastructure and a good place to do business.
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Canadian Government Grants. Canada offers many grants to technology based organization who start businesses or invest in Canada. The largest program is called Scientific Research and Experimental Development or SR&ED providing significant tax incentives for organizations who employ Canadians doing technology research. AWS is nothing but innovative under the hood, and they would certainly qualify. The Federal Government also has an organization called the National Research Council offering grants under a program called IRAP, which support innovation and research. Followed by each province having their own programs to support technology. I’m sure, given the prospective millions of dollars investment and job creation, Amazon could make a deal with the provincial government and municipality for tax breaks and incentives.
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Abundant Clean Power. Electricity is one of the primary requirements to operate a data centre. And clean energy obviously being a much greener alternative. Canada generates a significant amount of its electricity from hydroelectric dams as well as being placed 6th largest producer of wind power in the world. There are numerous locations close to hydroelectric plants in British Columbia, Ontario and Quebec to satisfy an energy hungry AWS data centre.
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Canada is Cold. They don’t call it the great white north for nothing. Servers get hot, and when you’re running thousands of them in the same facility, they get blisteringly hot. Typically air conditioning has been used to cool them down. This adds significantly to the electricity bill, which is already sky high. Not to mention all the capital costs of purchasing, installing and maintaining the AC equipment. The latest designs provide for cooling using outside air, where Facebook just built a centre in Sweden based on these principles. What better place to put a smoking hot centre then in one of the colder countries in the world. At least that freezing Canadian air can be put to good use.
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Amazon Already Operates in Canada. Amazon have existing employees and established offices in Canada. They just announced that they’re taking up a large space in one of the newly constructed buildings downtown Vancouver to house up to 1,000 people. They are familiar with how to do business here and have people on the ground to execute the building of a centre.
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Good Quality People to Hire. Canada is a thriving tech centre with large technology companies being born and running businesses in Canada. Communities like Vancouver and Waterloo Ontario have vibrant ecosystems with the best people in world in their technological specialty. Supported by world renowned institutions like University of British Columbia and the University of Waterloo, plus numerous other schools. In addition the draw for international talent is also worth mentioning, where Canada attracts more immigrants than any other country in the world, contributing to a multi-talented and continuously growing workforce. A quarter of a million people immigrate to Canada each year. That includes 1,000 international PhD students being accepted for permanent residency annually under Canada’s Federal Skilled Worker Program. There should be no shortage of hungry tech geeks wanting to build and support an AWS data centre in Canada.
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Best Country for Business. In 2011, Forbes rated Canada first in its annual Best Countries for Business. This was due to Canada’s strong investor protection, supportive business environment, and favourable tax rates. Plus Canadian are nice.
We surveyed our fellow Canadians to get their thoughts on the subject, the results: Proof Canadians Want a Local AWS Data Centre. AWS please build a data centre in Canada!!!
Lets us know why you think AWS should build a Canadian centre?
