Cheaper hydro prices in the province convinces Amazon to say no to Ontario, yes to Quebec for anticipated $280 million development.
Amazon has selected Montreal as home for several new data centres. The decision was largely based on Quebec’s lower price of hydro compared with other Canadian provinces, like Ontario.
According to the Postmedia’s Vito Pilieci, there are now at least two data centres just outside Montreal to offer web-based services to the “Canada Region.” Canada is now one of 15 regions in the world that runs data services on behalf of Amazon clients.
“We picked the area that we did because of the hydro power,” Teresa Carlson, a vp at Amazon Web Services, told Postmedia. “We did find them (Quebec) to be very business friendly.”
Carlson added that Amazon is keen to source green energy, “as the company is attempting to get all of its data centres on renewable energy sources.”
Quebec now finds itself at the forefront of cloud computing nationally, wrote Postmedia. “It’s an industry the province has been pursuing heavily, using its cheap hydro electricity as a prime attractant.”
According Hydro Quebec, large commercial electricity users pay 5.17 cents per kWh in the province, while comparable businesses in Ontario pay around 13 cents per kWh, the highest rate in Canada.
U.K. newspaper The Independent reported in October 2015 that a comparable development in Dublin, Ireland, came with a $280 million price tag. Amazon did not reveal the cost of the data centres in Montreal.
Data centre infrastructure is expanding all over the world at a hot pace. According to a study by Persistence Market Research, companies will have spent more than $40.4 billion U.S. on the construction of new data centres around the globe this year. By 2024, that amount is expected to rise to $96.5 billion as more services move to the cloud and more businesses demand it.
Per Postmedia’s Pilieci, Canadian and foreign industry giants like IBM, Bell Canada, Cogeco Data Services and many others have recently opened data centres in the province. Moreover, one of the world’s largest data centres is housed in Quebec, paid for by the French cloud computing giant OVH in 2013. That investment led to OVH setting up its North American research and development labs in Quebec in 2016.
The news was apparently quick to sour the minds of high-ranking Ontario politicians. Patrick Brown, the leader of Ontario’s Progressive Conservative party, told Postmedia he wasn’t pleased.
“I’m envious of Quebec. It’s a competitive destination for jobs. It’s a story we’ve heard all to often, and we need to rectify it,” he told the newspaper. “These are jobs that could have gone to Ontario. We can do better in this province.”
Just two weeks ago, Amazon named Montreal its newest Amazon Web Services Region, its first in Canada.
Amazon Web Services is the largest provider of cloud computing services in the world, accounting for more than 30 per cent of the global market.
In its most recent financial quarter, Amazon Web Services accounted for $3.23 billion U.S. in sales, a 55-per-cent increase over the $2.1 billion it accounted for during the same quarter last year.