To meet the escalating demand for cloud services amid a burgeoning adoption of new technologies, Amazon Web Services Mexico (AWS), a subsidiary of Amazon.com Inc (AMZN.O), has unveiled plans to invest over $5 billion in establishing a cluster of data centers in Mexico.
Head of Amazon Web Services Mexico unit, Ruben Mugartegui, disclosed in an interview with that the cluster is slated to be constructed in the Mexican state of Queretaro. The substantial investment will be dispersed over the course of the next 15 years, marking a significant commitment to the region’s technological advancement.
Mugartegui revealed that the groundwork for this ambitious project has been underway for more than five years, underscoring Amazon’s meticulous planning and dedication to enhancing its infrastructure capabilities in Mexico.
Presently, AWS caters to a diverse clientele in Mexico, including prominent entities such as Cinepolis, BIVA, Aeromexico, and various local government bodies, showcasing the widespread utility and appeal of cloud computing services.
Cloud computing, an increasingly integral component of modern business operations, empowers companies to access essential technology services like storage and databases via the internet, obviating the need for physical data centers and servers. Mugartegui cited a study indicating that companies utilizing AWS can potentially reduce their technology expenditures by approximately 20%.
Since its foray into the Mexican market in 2015, Amazon has injected over 52 billion pesos ($3.04 billion) into the country, evidencing its steadfast commitment to fostering economic growth and technological innovation in the region.
This substantial investment by Amazon comes amidst the phenomenon of nearshoring, wherein companies are relocating operations from Asia closer to the United States in response to disruptions in global supply chains triggered by the COVID-19 pandemic.
In line with efforts to attract foreign investment, the Mexican government has implemented initiatives such as tax incentives for firms seeking to establish operations within the country. Although Mugartegui refrained from divulging specifics regarding fiscal benefits received by Amazon, he underscored the company’s constructive engagement with governmental entities, noting that prospective firms relocating to Mexico are poised to become potential clients.
The announcement by Amazon follows in the footsteps of prominent entities like Tesla, which disclosed plans to construct a factory in Mexico. Tesla’s investment has garnered substantial support from local authorities, with incentives totaling $153 million approved for the automotive giant, further bolstering Mexico’s appeal as a prime destination for foreign investment and economic development.