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Amazon Web Services (AWS), a subsidiary of Amazon.com, Inc. (NASDAQ:AMZN), is launching a new AWS infrastructure Region in Mexico by early 2025, investing over $5 billion (approx. MXN $85 billion) in the country. The Region will cater to a wide range of customers, including developers, startups, enterprises, and government organizations, offering lower latency and secure content storage options.
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The announcement of Amazon Web Services' expansion into Mexico represents a strategic move to capitalize on the high demand for cloud services in the Latin America region. The investment of over $5 billion signals AWS's commitment to establishing a significant presence and suggests expectations of substantial growth in the local market. This infrastructure development can be expected to enhance AWS's competitive edge by reducing latency for end users and adhering to data sovereignty requirements that are increasingly important for customers in various sectors.
From a market perspective, this move could potentially increase Amazon's market share in cloud services within Latin America and provide a boost to its overall revenue growth. The expansion may also lead to a ripple effect, encouraging other tech giants to bolster their presence in emerging markets, thereby intensifying competition. For investors and stakeholders, the long-term investment in Mexico's digital infrastructure could translate into sustained revenue streams and a stronger foothold in a market that is rapidly digitizing.
The $5 billion investment over 15 years into the AWS Mexico (Central) Region should be dissected in terms of its financial implications. Given that cloud computing is a high-margin business, AWS's expansion into Mexico could lead to improved margins over time due to economies of scale and increased utilization of the new infrastructure. However, the initial capital expenditure will be substantial and investors should monitor the impact this will have on Amazon's free cash flow, especially in the context of its broader capital allocation strategy.
Moreover, the long-term nature of the investment means that the financial benefits will accrue gradually. It's important to consider the potential for increased operating expenses associated with the expansion, including costs related to staffing, maintenance and local regulatory compliance. The market's reaction to this news may be mixed, as the benefits are long-term and the costs upfront, but a successful execution could lead to a re-rating of Amazon's stock as the company taps into the growing Latin American market.
The investment of AWS into Mexico is indicative of the broader economic trends where technology and digital services are becoming pivotal to economic growth. Mexico, being a part of Latin America, represents an emerging market with a growing middle class and increasing technological adoption, making it an attractive destination for such investments. The potential economic impact includes job creation, both directly and indirectly, through the establishment of data centers and the stimulation of the local tech ecosystem.
It's also likely to contribute to the GDP of Mexico through increased productivity and innovation. The direct investment into digital infrastructure can be a catalyst for further economic development, as access to advanced cloud technologies can enable local businesses to scale and compete globally. The long-term nature of the investment also demonstrates a vote of confidence in the stability and growth potential of the Mexican economy, which could encourage further foreign direct investment into the region.
AWS Mexico (Central) Region will enable customers to run workloads and securely store their content in Mexico while serving end users with even lower latency
New Region reflects AWS’s long-term commitment to meeting high demand for cloud services in Latin America
AWS plans to invest more than $5 billion (approx. MXN $85 billion) in Mexico
SEATTLE--(BUSINESS WIRE)--
Amazon Web Services (AWS), an Amazon.com, Inc. company (NASDAQ:AMZN), today announced plans to launch an AWS infrastructure Region in Mexico by early 2025. The new AWS Mexico (Central) Region will give developers, startups, entrepreneurs, and enterprises, as well as government, education, and nonprofit organizations, greater choice for running their applications and serving end users from data centers located in Mexico, ensuring that customers who want to store their content in Mexico can do so. As part of its long-term commitment to Latin America, AWS is planning to invest more than $5 billion (approx. MXN $85 billion) in Mexico over 15 years. The upcoming AWS Mexico Region is the latest in AWS’s ongoing investments in Mexico to provide customers with advanced and secure cloud technologies. For more information about AWS Global Infrastructure, visit aws.amazon.com/about-aws/global-infrastructure.
“Cloud services are an essential part of everyday life, helping us to digitally and economically transform Mexico,” said Raquel Buenrostro, Mexican secretary of economy. “We welcome AWS’s investment and expansion in Mexico because it is a sign of trust and demonstrates conditions are right to support the nearshoring trend across many sectors of our economy. We also welcome AWS’s investment in training students, micro, small and medium-sized companies, and digital entrepreneurs in Mexico at scale.”
“AWS is excited to see thousands of customers in nearly every industry across Mexico innovate and grow,” said Prasad Kalyanaraman, vice president of Infrastructure Services at AWS. “Our investment in Mexico reflects AWS’s long-term commitment to customers so they can take advantage of advanced technologies like artificial intelligence and machine learning. We look forward to helping customers in Mexico meet data residency preferences and deliver cloud-based applications with low latency, accelerating the country’s digital transformation, and fueling economic growth.”
The new AWS Region will consist of three Availability Zones at launch, adding to AWS’s existing 105 Availability Zones across 33 geographic regions globally. With today’s announcement, AWS has plans to launch 15 more Availability Zones and five more AWS Regions in Malaysia, Mexico, New Zealand, Thailand, and the AWS European Sovereign Cloud. AWS Regions consist of Availability Zones that place infrastructure in separate and distinct geographic locations. Availability Zones are located far enough from each other to support customers’ business continuity, but near enough to provide low latency for high availability applications that use multiple Availability Zones. Each Availability Zone has independent power, cooling, and physical security and is connected through redundant, ultra-low-latency networks. AWS customers focused on high availability can design their applications to run in multiple Availability Zones to achieve even greater fault tolerance.
The AWS Mexico (Central) Region will enable customers with data residency preferences or requirements to store their content securely in Mexico, enable customers to achieve even lower latency, and serve demand for cloud services across Latin America. Customers from startups to enterprises to government organizations and nonprofits will be able to use advanced technologies from the world’s leading cloud to drive innovation. AWS offers the broadest and deepest portfolio of services, including analytics, artificial intelligence, compute, database, Internet of Things (IoT), machine learning, mobile services, storage, and other cloud technologies. As part of a continued commitment to contribute to the development of digital skills, AWS will hire and develop additional local personnel to operate and support the new AWS Region in Mexico.
“Amazon has demonstrated confidence in our country and this investment is the result of the close collaboration that they have built with the government of Mexico,” said Emiliano Calderón, head of national digital strategy for Mexico’s government. “This administration has promoted an open policy for all technology companies as a foundational tool for digital and financial inclusion, with the ultimate objective of bringing technology and innovation closer to the people. Congratulations to AWS on its upcoming infrastructure region, which will be a key driver of Mexico’s digital transformation.”
“AWS’s infrastructure expansion in Queretaro is a testament to our state’s commitment to advanced technology and innovation, and to the work we’ve done to create an environment where technology companies can thrive,” said Mauricio Kuri, governor of the state of Queretaro. “This investment reinforces our role as a leader in Mexico’s digital transformation and helps us drive economic growth. With AWS, we look forward to adding jobs, generating new businesses, and expanding opportunities for the people of Queretaro and across the country.”
Customers welcome the AWS Region in Mexico
Organizations in Mexico are among the millions of active customers using AWS in more than 190 countries around the world. Enterprises in Mexico choose AWS to innovate, drive cost efficiencies, and accelerate time to market. Customers using AWS include Aeroméxico, Banco Santander Mexico, BBVA, Cinépolis, Kavak, Palace Resorts, and Vector Casa de Bolsa. Mexican public sector customers also use AWS to help drive cost savings and better serve local citizens. These customers include Government of the State of Michoacán, Nacional Monte de Piedad, and Tec de Monterrey. Startups and small businesses, including Kueski, Rappi, and SkyAlert, are building their businesses on AWS to rapidly scale nationally and around the world.
Aeroméxico is Mexico’s flagship airline and a leader in Latin American aviation, transporting over 1.9 million passengers in January 2024. “Our purpose as a global airline is to offer an extraordinary experience to our customers in every travel destination. We are able to achieve this goal with AWS as our primary cloud provider, which helps us to prioritize technological modernization and improve the efficiency of our operations,” said Fernando Rocha, CIO at Aeroméxico. “A new AWS Region in Mexico shows a strong sign of the commitment to Mexican customers through investment in local infrastructure. For Aeroméxico, it represents a valuable opportunity to take advantage of higher performance in our mission-critical applications and more efficient telecommunications services – which means we can innovate faster and deliver a better customer experience.”
Banco Santander Mexico is one of the leading financial groups in the country, focused on retail and commercial banking, and other financial services, serving more than 20.5 million customers. “AWS has played a strategic role in our digital transformation,” said Juan Pablo Chiappari, head of IT infrastructure for North America at Banco Santander. “Thanks to their wide range of services, we have been able to innovate faster, improve our customer experience and reduce our operating costs.”
Cinépolis is the third largest cinema chain globally in terms of the number of screens, with more than 6,700 fully operational. The cinema chain is present in 19 countries and is the largest cinema chain in Latin America. “At Cinépolis, we aim to create inspiring experiences that touch people’s lives. AWS infrastructure helps us reach a growing number of customers with the latest entertainment content across Latin America and the U.S.,” said Juan Velez Ballesteros, director of development and architecture at Cinépolis. “The development of a new AWS infrastructure Region in Mexico will allow us to continue innovating with the scalability, resilience and security that a fast-growing business requires and deliver even more unforgettable experiences to our customers.”
Vector Casa de Bolsa is the largest independent securities broker-dealer in Mexico and has a presence in 10 countries. It offers a full-service broker dealer and wealth manager with specialized products and services designed for individual investors, companies, institutional funds, government, and foreign investors. “Innovation is one of our core values, and we’re constantly seeking new ways to better serve our customers,” said Mónica Martínez, chief AI and innovation officer at Vector Casa de Bolsa. “Our strong desire to work with AWS is strengthened to continue accessing the latest technologies and resources, including world-class infrastructure at the local level that will enable us to build the next generation of our services and products powered by generative AI, and bring innovative solutions to our customers.”
Mexican AWS Partners also welcome the new AWS Region
The AWS Partner Network (APN) is a global community that leverages AWS technologies, programs, expertise, and tools to build solutions and services for customers. Together, partners and AWS provide innovative solutions, solve technical challenges, win deals, and deliver greater customer value. AWS Partners in Mexico include Escala 24x7, Nyx Technologies, and XalDigital. For the full list of AWS Partners, visit aws.amazon.com/partners.
XalDigital is an AWS Partner that develops innovative technological solutions to drive digital transformation for companies. “AWS’s infrastructure investment in Mexico will play an important role in accelerating digital transformation in the country while bringing multiple benefits to our customers,” said Denis Génova, co-founder and CEO at XalDigital. “The upcoming AWS Region will enable companies to store and process data securely and reliably in the cloud, improving business efficiency and strengthening trust in digital operations. Organizations across financial services, telecommunications, media and entertainment, healthcare, and more will also have the tools to drive industry-leading innovation through adoption of emerging technologies like generative AI.”
AWS investment in Mexico
Since 2020, AWS has launched seven Amazon CloudFront edge locations in Mexico. Amazon CloudFront is a highly secure and programmable content delivery network that accelerates the delivery of data, videos, applications, and APIs to users worldwide with low latency and high transfer speeds. In 2020, AWS also launched AWS Outposts in Mexico. AWS Outposts is a family of fully managed solutions delivering AWS infrastructure and services to virtually any on-premises or edge location for a truly consistent hybrid experience. AWS expanded its infrastructure footprint in Mexico again in 2023 with the launch of AWS Local Zones in Queretaro. AWS Local Zones are a type of AWS infrastructure deployment that places compute, storage, database, and other select services closer to large population, industry, and IT centers, enabling customers to deliver applications that require single-digit millisecond latency to end users. In 2023, AWS also established an AWS Direct Connect location in Queretaro, allowing customers to establish private connectivity between AWS and their data center, office, or colocation environment.
To support the growth in cloud adoption across Mexico, AWS continues to invest in upskilling students, local developers and technical professionals, nontechnical professionals, and the next generation of IT leaders in Mexico through offerings like AWS re/Start, AWS Academy, AWS Educate, and AWS Skill Builder. These programs and learning centers help learners of all backgrounds and experiences prepare for careers in the cloud. From college courses to full-time training programs to interactive, game-based learning content, AWS Training and Certification provides individuals with training in the ways they like to learn. As part of the long-term commitment to Latin America, since 2017 AWS has trained over two million people across the region on cloud skills, including 400,000 people in Mexico.
Commitment to sustainability
Amazon is committed to becoming a more sustainable business and reaching net-zero carbon across its operations by 2040, 10 years ahead of the Paris Agreement, as part of The Climate Pledge. Amazon co-founded The Climate Pledge and became its first signatory in 2019. As part of its Climate Pledge commitment, Amazon is on a path to power its operations with 100% renewable energy by 2025, five years ahead of the original 2030 target. See Amazon's public methodology for more on its approach. Amazon has been named the largest corporate purchaser of renewable energy for the last four years in a row—a position it’s held since 2020, according to Bloomberg New Energy Finance. Amazon now has more than 500 renewable energy projects in 27 countries. Additionally, AWS is committed to being water positive by 2030, returning more water to communities than it uses in its direct operations.
About Amazon Web Services
Since 2006, Amazon Web Services has been the world’s most comprehensive and broadly adopted cloud. AWS has been continually expanding its services to support virtually any workload, and it now has more than 240 fully featured services for compute, storage, databases, networking, analytics, machine learning and artificial intelligence (AI), Internet of Things (IoT), mobile, security, hybrid, media, and application development, deployment, and management from 105 Availability Zones within 33 geographic regions, with announced plans for 15 more Availability Zones and five more AWS Regions in Malaysia, Mexico, New Zealand, Thailand, and the AWS European Sovereign Cloud. Millions of customers—including the fastest-growing startups, largest enterprises, and leading government agencies—trust AWS to power their infrastructure, become more agile, and lower costs. To learn more about AWS, visit aws.amazon.com.
About Amazon
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earth’s Most Customer-Centric Company, Earth’s Best Employer, and Earth’s Safest Place to Work. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Career Choice, Fire tablets, Fire TV, Amazon Echo, Alexa, Just Walk Out technology, Amazon Studios, and The Climate Pledge are some of the things pioneered by Amazon. For more information, visit amazon.com/about and follow @AmazonNews.
