Amazon Web Services to open data centers in Israel in 2023

Tech firm announces plan a few weeks after Jewish state signs billion-dollar cloud-based services deal with the company and Google

Amazon Web Services advertisement on an underground platform at a New York City subway station (krblokhin; iStock by Getty Images)
Amazon Web Services advertisement on an underground platform at a New York City subway station (krblokhin; iStock by Getty Images)

Amazon announced Friday it will open data centers in Israel in 2023, a number of weeks after the country signed a NIS 4 billion ($1.23 billion) deal with the company’s Web Services subsidiary and Google.

“Today, Amazon Web Services Inc, an company, announced it will open an infrastructure region in Israel in the first half of 2023,” AWS said in a statement on Friday, Reuters reported.

In April, the two tech firms — AWS and Google — were selected as the winners of the NIS 4 billion tender to build and provide cloud-based regional data centers and services to the nation.

Israel signed the agreements with the companies in May, which, according to Finance Ministry officials, will ensure continuity of service even if the tech giants come under pressure to boycott the country.

The Accountant General at the Israel Finance Ministry, Yahli Rotenberg, center, along with other officials at the Finance Ministry in Jerusalem on May 24, 2021 (Shoshanna Solomon/Times of Israel)

They will build the data centers and provide cloud services to local public entities, with all of the data secured within the borders of Israel under strict security guidelines, and under Israeli law.

The Israeli employees will have to pass security clearances.

The cloud project, called the Nimbus, is one of Israel’s biggest information technology projects. It will enable government ministries and other public entities to transfer servers and services into the cloud provided by the two tech firms. Until the data centers are built locally — within an estimated two years — cloud services will be provided by Google and Amazon AWS data centers in Ireland, the Netherlands and Frankfurt. All of that data will then be transferred to the ones set up in Israel, the officials said.

The government contract with Google and Amazon for the services is for an initial seven years, with an option to extend it for a total of 23 years, the officials said. After the first seven years Israel will be able to add other suppliers or halt work with the current ones.

An illustrative image of a data center; server farm (cybrain; iStock by Getty Images)

The project, which envisages six data centers being set up in Israel at an investment of at least NIS 4 billion will provide some 500 direct jobs for each center, but also boost employment indirectly via the services these centers will be using from other suppliers.

The centers will also help create an ecosystem for startups that provide cloud-based services, the officials said, and train the workforce with the appropriate skills that will then trickle down into the nation’s tech ecosystem. Neighboring countries will also be able to tap into the cloud infrastructure set up in Israel, the Finance Ministry said.

The Nimbus project was divided into four parts with four separate tenders: to build the data centers and provide cloud services to the government on a public platform – won by Google and AWS; to help set out a government strategy to move operations to the cloud; to provide technical help in implementing the move; and an as-yet unpublished one to provide optimization services for use of the cloud.

Consultants KPMG are the winners of the second tender and will help set up a Cloud Center of Excellence, which will help set out government strategy to move activities to the cloud.

The ministry said that the tender to choose dozens of local small and medium-sized suppliers to help the government entities move systems to the cloud and to develop cloud-based systems is underway. The fourth tender is still being formulated, the ministry said.

Shoshana Solomon contributed to this report.

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