While the recent launch of Amazon.co.za has South Africans buzzing about online shopping, the company’s presence in the country goes much further back. For over a decade, Amazon Web Services (AWS), a subsidiary of the retail giant, has been quietly operating behind the scenes.
The story of AWS in South Africa has a local twist. In the mid-2000s, South African engineer Chris Pinkman, returning from Amazon’s Seattle headquarters, played a key role in developing the Elastic Compute Cloud (EC2) system, a core component of AWS today.
AWS’s commitment to South Africa has grown steadily. A Johannesburg office opened in 2015, followed by a larger one in 2022 to meet surging customer demand. In 2017, AWS Direct Connect expanded Amazon’s global network into Africa. This was followed by the launch of Amazon CloudFront locations in Johannesburg and Cape Town in 2018, helping organizations deliver content efficiently.
The significant investment culminated in the 2020 launch of the AWS Africa (Cape Town) Region, complete with data centers and infrastructure. Last year, Cape Town became home to the first international AWS Skills Centre, offering free cloud computing training. AWS has committed a hefty R46 billion investment in the AWS Africa region between 2019 and 2029.
While retail may be Amazon’s public face, AWS is its silent profit machine. Cloud services boast higher software margins, translating to significant revenue. Even though North American sales remain the largest contributor overall, AWS is catching up. In Q1 2024, AWS sales grew 17% year-over-year, exceeding $25 billion (R454 billion), while North America reached $86.3 billion (R1.5 trillion).
More importantly, AWS is the leading profit generator. Despite North America’s higher sales figures, its operating income sits at $5.0 billion (R90.88 billion) – dwarfed by AWS’s $9.4 billion (R170.86 billion).
