Communications minister says Google upgrade is a ‘punch in the arm’ for the economy

Google says New Zealand customers will be able to benefit from less lag and better data sovereignty.

Alastair/AP Grant

Google says New Zealand customers will be able to benefit from less lag and better data sovereignty.

Communications Minister David Clark said Google’s decision to upgrade its New Zealand service is “another major vote of confidence” for the country’s digital industries.

Google has announced that it will no longer treat New Zealand customers as if they were in Australia and will create a new cloud computing region for the country, but remains coy on details.

Clark said becoming a cloud region would mean businesses would have the choice to keep their data on land and work with the national Google Cloud team to “really drive digital transformation here.”

“Protecting people’s data and privacy is of critical importance to the government. Terrestrial cloud facilities give us more control over New Zealand data because it is held here, where our laws and protections apply,” he said.

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Google has established cloud computing regions with their own data centers that customers can use to access its services in its 34 major markets around the world.

The usual benefits of having these facilities nearby in a country are that they reduce lag, allow cloud-based services to run faster, and can avoid legal and regulatory complications that some customers face when sending data abroad.

The company said it has now decided to create new Google Cloud regions in New Zealand, Mexico, Malaysia and Thailand.

However, he would not confirm that he would see it following in the footsteps of rivals Amazon Web Services and Microsoft by building its own data centers in New Zealand.

The new cloud region would still reduce lag and allow Google customers to host their data inside the country, he said — which may suggest it decided to partner with a company instead. local to provide the additional services.

“Although not a physical data center, Cloud Regions are located in data centers that may be owned by Google or a third-party colocation provider,” a spokesperson said.

“It will include the same hardware, software and operations found in our Google Cloud data centers.”

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New Zealand customers would be able to carry out IT tasks in the country, “which is particularly useful for highly regulated sectors such as financial services and the public sector where data sovereignty is an integral part”, a- she declared.

Google would not discuss the size or dollar value of its planned investment.

“Bringing a new cloud region to Aotearoa shows Google’s growing investment and will allow us to partner more closely with local businesses, leveraging our unique ability to bring business and consumer ecosystems closer together,” he said. National Director Caroline Rainsford said in a statement.

Clark noted that Google’s main rivals in the cloud computing market, Amazon Web Services (AWS) and Microsoft, had previously committed to spending billions of dollars on local computing infrastructure.

“These three investments represent … a boost to our economic reconstruction, but also lay the foundation for our plans to become a digital nation and our aspirations to grow the digital economy,” he said.

AWS announced last year that it plans to spend $7.5 billion over 15 years to build “world-class computing infrastructure” in Auckland, including at least three data centers in the city.

He estimated that the investment would create 1,000 jobs and contribute nearly $11 billion to New Zealand’s GDP over that period.

Microsoft is more advanced in its investment plans.

It announced in 2020 that it would invest in New Zealand data centers that would add the country to its 59 cloud regions around the world.

It is currently building a large data center at Westgate in Auckland and has signed several major clients including Fonterra, ASB, BNZ and Auckland Transport.

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