Take A Look At Amazon's 'Aggressive' Expansion Plans For AWS

• The share price of Amazon.com, Inc. (NASDAQ: AMZN) has appreciated 106.27 percent over the past one year, rising to a high of $693.97 on December 29.
• Brent Bracelin of Pacific Crest reported that Amazon had confirmed plans on January 9 to “aggressively expand” AWS’ data center footprint.
• According to the Pacific Crest report, the company also announced “the opening of its 12th region in Seoul, Korea, and plans to add another four new regions this year.”

Analyst Brent Bracelin mentioned that although investments for expansion into five new regions in 2016 could have a temporary impact on profit margins, the accelerated pace of investment was a “very bullish” sign of Amazon Web Services’ potential for share gains and future growth in a market in which it has less than three percent penetration.

Bracelin also stated that each formal region that the company intends to expand into consists of at least two availability zones or data centers. While expansion into India, Korea, Ohio and the U.K. were anticipated, the fifth region, Ningxia, China, was a surprise.

“This fifth region marks a growing presence that AWS has in Asia-Pacific with data center footprints that are planned or deployed in Singapore, Japan, Australia, Korea and two locations in China,” Bracelin explained.

By the end of 2016, AWS would have expanded its footprint by 45 percent, with a presence in 16 regions, from the 11 at the beginning of the year.

“This elevated level of investment is a marked change after a more tempered data center expansion plan over the last four years. 2011 was the last time AWS expanded this aggressively, adding four new regions,” the report added.