Amazon Buys Dublin Site for Data Center

February 14, 2011

Amazon has bought a former supermarket warehouse near Dublin and plans to convert the building into a data center to expand its rapidly-growing cloud computing operation. The company recently acquired a 240,000 square foot building in Greenhills Industrial Estate that previously housed storage for UK supermarket chain Tesco, according to The Independent. The paper says Amazon has also leased space for data center expansion in two other Dublin-area office parks, the Snughborough Industrial Estate in Ballycoolin, and the Clonshaugh Industrial Estate.

Amazon Web Services opened a data center in Dublin in December of 2008 to house the European availablity zones for its EC2 cloud computing services. The company’s property moves reflect the rapid growth of its European cloud computing operation, which was chronicled by Netcraft in December.

“Amazon’s cloud hosting now makes up more than a third of all internet-facing web servers in Ireland, with three times more web servers hosted than the next largest hosting location,” writes Netcraft’s Colin Phipps. An analysis of the growth of SSL-enabled sites in Ireland reflects “a clear increase in non-Irish companies hosted in Ireland in the last 2 years, and this is mainly due to these companies using Amazon’s EC2 service. Since October 2010 Amazon is the largest hoster of secure websites in Ireland.”

The building acquisition in Dublin appears to be part of a broader effort to line up real estate that can be converted into additional capacity for Amazon Web Services. The company recently leased a building in northern Virginia and is said to have acquired additional land in Oregon, although it has yet to fully develop other potential data centers in the state.

Even as it adds facilities, Amazon is working to get more performance and efficiency out of its existing operation. Business Week has a profile of Amazon Web Services researcher James Hamilton. The story recounts how James gained adaptation skills while fixing Lamborghinis and other luxury Italian autos in British Columbia while in his 20s, when Hamilton learned that replacement parts were hard to find. It also discusses Hamilton’s current work helping Amazon gain efficiencies in its cloud computing operations.

The story also notes an estimate by Caris & Co. analyst Sandeep Aggarwal that Amazon Web Services may generate as much as $900 million in sales this year, with operating margins could be as wide as 23 percent. The estimate is of interest because Amazon has yet to break out any financial numbers for AWS in its earnings reports.