Amazon.com Inc. will open its first cluster of data centers in Canada this year, helping to meet demand from companies that don’t want their data stored in the U.S. where it can be monitored by security officials.
The data centers power Amazon Web Services, which rents storage and computing power to other companies. Canada’s Internet storage sector is growing and companies such as Telus Corp. and Rogers Communications Inc. have made greater privacy under Canadian laws a key selling point in attracting business after revelations two years ago that the U.S. National Security Agency had spied on data networks run by American companies.
Beyond privacy concerns, the new data centers will also speed processing times for Amazon clients connecting with customers in Canada. The proximity of data centers to customers helps reduce response time for those running Internet-based cloud applications.
The new data centers will be in Montreal and powered almost entirely by hydroelectric generation, Amazon announced Wednesday.
Amazon has four data regions in the U.S. and a fifth coming in Ohio. Globally, Amazon has data centers in countries such as Brazil, Ireland, Japan, Australia and plans to open new centers in South Korea this year.
Amazon Web Services generated $2.09 billion in the third quarter, an increase of 78 percent from a year earlier, though still only 8.2 percent of the Seattle-based e-commerce giant’s total sales in the quarter.