What does a 2nd AWS Region for Australia mean to the Australian IT Industry?

I was there launching the 1st AWS Region in Sydney in 2013 as an AWS staff member, and as the AWS Solution Architect with a focus (depth) on security meant that it was a critical time for customers who were looking to meet strict (or perhaps, even stricter) security requirements.

Back in 2013, the question was the US Patriot Act. That concern and question has long gone.

Subsequently came cost effectiveness. Then domestic IRAP PROTECTED status.

And back in 2013, secrecy was everything about a Region. We launched Sydney the day it was announced, as ready-for-service. This made recruiting operational staff, securing data centre space (or even building data centres), and having large amounts of fibre run between buildings by contractors, difficult to keep under wraps. These days, pre-announcements like this help ease the struggle to execute the deployment without the need for code names and secrecy.

So, what does the launch of a second AWS Region in Australia, with three Availability Zones, and the general set of services within AWS being present, going to mean to the domestic and international markets?

Proximity to customers & revenue

Let’s look at some population and revenue statistics for these few cities in Australia (and use NZ as a comparison):

LocalityPopulation 2018% population of AustraliaGross State Product 2018/19 (USD$B)
All of Australia25M100%1,462 (100%)
NSW (Sydney)7.5M (5.2M)30% (20.8%)482 (32%)
Victoria (Melbourne)6.3M (4.9M)25.2% (19.6%)344 (23%)
New Zealand (for comparison)4.8M19.2%209 (14%)
Population comparisons in AN/Z

So with a Melbourne Region launch, we see 55.2% of the Australian population in the same state as a Region, and 40.4% in the same city as a Region. This also represents being close to where 55% of the GDP of Australia comes from.

Moreover this is coverage for where the headquarters of most Australian national organisations are based, and typically their IT departments are helmed from their national HQ.

Where does Latency matter?

The main industry that will see the latency impact from the new Melbourne Region is probably the video/media production vertical. There’s a sizable video media production industry in Melbourne that will now not discount AWS for the 11ms or so that was previously seen to Sydney.

Of course, latency doesn’t imply bandwidth.

Melbourne has been a Direct Connect location for some time, with customers able to take a partial port, or a whole 1GB or 10 GB port, and multiples three of with Link Aggregation Control Protocol (LACP) to deliver higher throughputs.

But the latency remained. And thus the Big Fat Pipe Problem would be a consideration: the amount of data sitting IN the pipe since transmission, and before being confirmed as received on the other end. For some devices and TCP/IP stacks, as the bandwidth increases, this becomes a problem.

You canna change the laws of physics

Mr Scott, Enterprise

Then there are applications that make multiple sequential connections from on-cloud to on-premises. An application that opens perhaps 100 SQL connections to a remote database over 11ms latency in series will see three round trips of TCP/IP handshake, and perhaps a TLS 1.2 handshake of 3 round trips, for 6.6 seconds of wall time before any actual query data and response is sent and processed.

The death of Multi-Cloud in Australia

Despite extremely strong multiple-Availability Zone architectures (see the Well-Architected principles), the noise of “multi-Region” has escalated in the industry. From the AWS-customer perspective, multi-cloud has become recognised as a “how about me” call from desperate competitors.

Of course the complexity of multi-cloud is huge, and not understood by most (any?) CIO who endorses this strategy. It’s far better to get the best out of one cloud provider, rather than try and dilute your talent base across implementing, maintaining and securing more than one.

However, some industry regulators have demanded more than one Region for some workloads, again mostly as a lack of understanding of what a strong Well-Architected design looks like.

With this announcement, multi-Region domestically within Australia will be a reality.

But we’re a Melbourne based infrastructure provider, we’re local!!

Sorry, time’s up.

You’re about to lose your customers, and your staff to an unstoppable force, with easy on-boarding, pay as you go, no commitment required terms.

It’s self-service, so there’s no cost of sale.

It’s commodity.

And it’s innovating at a clip far faster than any infrastructure organisation around. There’s almost nothing special about your offering that isn’t faster, cheaper and better in cloud. It’s time to work out what happens when 1/2 your staff leave, and 1/2 your customers are gone.

Getting customers to sign a 5 year contract at this point is only going to sound like entrapment.

Where next in Australia & NZ?

There’s a lot to consider when planning an AWS Region.

First, their are tax & legal overheads in establishing multiple entities in a country to implement, operate and own infrastructure. That means that even if New Zealand was next in line by population, or GDP, it may fall to another location in Australia to follow Melbourne.

And while the state of Queensland may look like it’s third, the latency it already has between Brisbane and Sydney of around 17ms may be outweighed by the fourth in the pack, Western Australia at 50ms.

Lots of variables and weightings to consider. And despite all of this, we have some time to see what the customer cost for AWS resources will be in the new Melbourne Region when it becomes available.