AWS’ Israeli Cloud Contract, Data Centers Will Boost Partner Ecosystem: AllCloud CEO

‘It’s a very exciting time, because it will give us even further opportunity to continue to evolve the businesses in Israel and push them forward, especially within the government entities that to this day have adopted cloud at sort of the SaaS layer...less so in the infrastructure as a service or platform as a service,’ says Eran Gil, CEO of AllCloud, an AWS partner.

Amazon Web Services announced plans to launch a new cloud region in Israel after it and rival Google were selected to provide cloud computing services to the Israeli government and military under the $1.2 billion “Nimbus” project.

The new AWS data centers — slated to open in the first half of 2023 — and the government contract are expected to be a big boost for AWS Partner Network businesses operating in the country and the flourishing Israeli tech ecosystem, according to Eran Gil, CEO of AllCloud, a cloud professional services company, AWS Premier Consulting Partner and Audited MSP Partner.

Now based in Denver, AllCloud originated in Israel and maintains a large office in Tel Aviv with nearly 150 employees as one of AWS’ leading partners there.

“It’s phenomenal news,” Gil said, noting an in-country cloud region will help its work with companies in regulated industries, such as current customer Bank Leumi, an Israeli bank. “In regulated industries like that, it will obviously benefit, when they require data to reside in the country. It also helps with serving the government entities. We are a very active partner in the government entities, both with our Salesforce practice and now with AWS, and we look forward to actually being able to do a lot more now that there’ll be a data center within the next 18 months. I think it will provide the entire ecosystem a big boost.”

The three-zone AWS Israel (Tel Aviv) cloud region will provide lower latency to AWS partners and customers and allow those with data residency requirements to run workloads in Israel and store data there.

“The new AWS Israel (Tel Aviv) region will empower more public and private institutions, innovative startups and global companies to deliver built-for-the-cloud applications that help fuel economic development across the country,” Peter DeSantis, AWS’ senior vice president of global infrastructure, said in a statement. “Cloud technology is at the heart of the Israeli government’s digital transformation program, and their approach highlights the importance of setting a strong course for cloud adoption and leading by example to re-invent citizen services.”

The Israeli government’s “Nimbus” project is aimed at accelerating the digital transformation of its ministries — as well as local municipalities, government-owned companies and public sector organizations — spurring innovation and enabling new digital services for Israeli citizens. In April, AWS and Google won the contract for the four-phase project, edging out Microsoft Azure, IBM and Oracle.

“We are in a phenomenal position to actually take a significant opportunity of that business,” AllCloud’s Gil said. “It’s a very exciting time, because it will give us even further opportunity to continue to evolve the businesses in Israel and push them forward, especially within the government entities that to this day have adopted cloud at sort of the SaaS layer — software-as-a-service — less so in the infrastructure as a service or platform as a service. There will be a lot of opportunity. The government offices, the ministries, have been clamoring for the ability to move to the cloud. Some of them have already been exploring it in one way or another.”

Under the terms of the Nimbus contract, AWS and Google will be required to provide cloud services from an Israeli cloud region, and both have committed to spending at least 20 percent of the contract’s value on Israeli products and services. Google Cloud announced in April that it also would develop a cloud region in Israel. (Rival Microsoft also is slated to open a cloud region in Israel in early 2022.)

Gil, who was born and raised in Israel, hailed the country’s tech industry as a “fast-growing, burgeoning industry that is probably second to the Bay Area from a tech-companies-per-capita perspective.”

“It’s a huge tech market,” he said. “Very innovative country…highly entrepreneurial. That’s why you hear about so many companies coming out of Israel, so many companies in the last probably 12 to 18 months becoming unicorns out of Israel.”

Those unicorns include Israeli work management company Monday.com, an AWS customer that raised $574 million in its U.S. initial public offering this week.

But while Israel is a very tech-oriented country, it’s been slower in adopting cloud technology than the United States or some European markets such as the United Kingdom and France.

“Part of that is security, data sovereignty and such,” Gil said. “Over the years, there’s been a lot of work to do to push the cloud business forward. I think in the last…24 to 36 months, it’s seen a huge boost, and in the last 12, even more so than ever. It certainly is in the forefront right now and catching up really quickly.”

AWS already has an established presence in Israel that dates to 2013, when it started supporting startups there through AWS Activate, a free program that offers startups and early-stage entrepreneurs access to resources needed to get started on AWS. AWS also works with accelerator organizations in Israel, including 8200 EISP, F2 Venture Capital – thejunction and TechStars in addition to venture capital firms such as Aleph, Pitango, TLV Partners and Viola Ventures.

AWS opened its first office in Israel, along with a research and development (R&D) center, in 2014. Its R&D presence there now covers Prime Air, Alexa Shopping, Amazon Lab126 and the development of AWS-designed compute, storage, networking, security and machine learning (ML) hardware through Annapurna Labs, which Amazon acquired in 2015. Annapurna has developed the AWS-designed Graviton2 Arm-based processors, the AWS Inferentia and AWS Trainium ML chips, and the AWS Nitro System, the underlying platform for AWS’ next generation of EC2 instances.

AWS also has Amazon CloudFront edge locations in Israel. Amazon CloudFront is its programmable content delivery network (CDN) that accelerates the delivery of data, videos, applications and APIs with low-latency, high-transfer speeds. And in 2020, AWS launched AWS Outposts, which brings native AWS services, infrastructure and operating models to virtually any data center, co-location space or on-premises facility, along with AWS Direct Connect, which makes it easier to establish a dedicated network connection from customers’ on-premises infrastructure to AWS infrastructure.

Customers with presences in Israel that have built their business on AWS include Amdocs, a Chesterfield, Mo.-based AWS Advanced Consulting Partner that was founded in Israel and maintains one of its largest development centers there and approximately 20 percent of its workforce; and AWS Advanced Technology Partners AppsFlyer, CyberArk, Gong, ironSource, JFrog, Kaltura, Lumigo, monday.com, NICE, Operative, Perion and SentinelOne. Other AWS Israel partners include Alcide, Automat-IT, BigPanda, Bringg, Checkmarx, CloudBuzz, Matrix CloudZone, Comm-IT, Continuity Software, CloudRide, DoIT International, Guardicore, MidLink, Namogoo, Orca Security, Perimeter81, Quali, Radware, Sapiens, TeraSky and Trax Retail.

AWS’ data center/cloud infrastructure includes 25 geographic regions with 81 availability zones, including a Middle East region in Bahrain. In addition to the Israeli cloud region, AWS has announced six additional regions with 18 more availability zones in Australia, India, Indonesia, Spain, Switzerland and the United Arab Emirates.