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Google’s first local cloud region for Israel goes live

New network part of $1.2b Nimbus project to bring cloud-based regional data centers and services to government, public entities; expected to boost economic growth, employment

Ricky Ben-David is The Times of Israel’s Tech Israel editor and reporter.

Colorful pipes sending and receiving water for cooling Google's data center in The Dalles, Oregon, in an undated photo. (AP/Google, Connie Zhou)
Colorful pipes sending and receiving water for cooling Google's data center in The Dalles, Oregon, in an undated photo. (AP/Google, Connie Zhou)

Google’s parent company, Alphabet, activated its local cloud region for Israel last week, a project that has been over a year in the making and is expected to boost employment and economic growth, as well as offer government ministries and public entities better data security.

The cloud region is part of Israel’s $1.2 billion “Nimbus” project with Google and Amazon’s AWS. The two tech giants won government tenders last year to build and provide cloud-based regional data centers and services to the nation.

The project enables Israeli government ministries and other entities to transfer servers and services into the cloud data centers provided locally. Up until now, Israel used cloud services provided by Google and AWS data centers in Ireland, Holland, and Frankfurt. All of that data will be transferred to the ones set up in Israel, with all of the data secured within the borders of Israel under strict security guidelines, and under Israeli law. Israeli employees have to pass security clearances.

The Finance Ministry said Thursday that the government’s transition to the new Google cloud region “will upgrade the efficiency of government services, shorten the response times in the activation of digital services for citizens, and save on operating costs, while allowing the government offices to use advanced services.”

The project will also enable “the consumption of advanced computing services by the Israeli market, promote digital transformation of local services, improve the productivity of businesses, encourage the processing and analysis of huge data of local companies in Israel and help promote the ecosystem of the State of Israel in the fields of cloud technologies,” the ministry said.

As part of the project, billions of shekels will be invested in local infrastructure in Israel, the ministry said in its statement Thursday.

Boaz Maoz, country manager for Google Cloud Israel said in a post that the new region “will help local organizations connect with users and customers around the globe, and help fuel innovation and digital transformation across every sector of the economy,” as well as contribute a cumulative $7.6 billion to Israel’s GDP between 2022-2030 and support the creation of 21,200 jobs by 2030, according to recent research commissioned by Google. The research was also cited by the Finance Ministry.

A Google building at the company’s campus in Mountain View, California, on September 24, 2019. (AP/Jeff Chiu)

Google will host a launch event for the project early next month.

AWS is expected to activate its cloud region in Israel during the first half of 2023, the Finance Ministry 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. After the first seven years, Israel will be able to add other suppliers or halt work with the current ones.

The total project, which envisages six data centers being set up in Israel at an investment of at least NIS 4 billion ($1.23 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, ministry officials have 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.

The project had come under fire since last year when it was first announced, after workers at Google and Amazon (including Jewish employees) pushed to cancel the contracts.

Adaire Fox-Martin, president of Google Cloud International speaks at a Google Cloud event in Athens on September 29, 2022. Google announced that it is expending its cloud infrastructure to Greece, following similar investments by tech giants Microsoft and Amazon. (AP/Petros Giannakouris)

During the May 2021 fighting between Israel and Gaza-based terror groups, Google employees asked management to review the company’s contracts with and corporate donations to “institutions that support Israeli violations of Palestinian rights,” citing the Israel Defense Forces as an example of such an institution

The workers said in a letter that the two tech companies have been pursuing contracts with US institutions such as the Department of Defense, Immigration and Customs Enforcement (ICE), and the police. “These contracts are part of a disturbing pattern of militarization, lack of transparency and avoidance of oversight,” the letter read. The workers said the deal with the Israeli government was a continuation in the same vein — a contract “to sell dangerous technology to the Israeli military and government.”

Asked last May if the tech giants could decide at any point to shut down services, leaving Israel in the lurch, attorney Zviel Ganz of the legal department at the Finance Ministry said, “According to the tender requirements, the answer is no.” The contracts also bar the firms from denying services to particular government entities, he said at a briefing with reporters.

Defense Minister Benny Ganz added that such scenarios had been taken into consideration when formulating the tenders.

Shoshanna Solomon contributed to this report.

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