US tech giant Amazon pitched a number of ideas in correspondence with then-Prime Minister Jacinda Ardern in the lead-up to Overseas Investment Office approval for its hyperscale data centre investment in New Zealand, granted in March 2022.
In a September 2021 letter to Ardern, a correspondent from Amazon’s cloud computing division Amazon Web Services (AWS) says it will spend up to $7.5 billion on an Auckland “AWS Region” data centre build that will create up to 1000 jobs and provide a $10 billion indirect gain to New Zealand’s GDP by boosting the digital economy. It also promised digital skills training for up to 20,000 Kiwis.
The letter - among correspondence released following an Official Information Act request - says, “We would very much like to discuss opportunities we see for fine-tuning New Zealand’s policy settings that can support public sector cloud”.
Those opportunities included “enhanced mechanisms to support public sector cloud adoption” and “refreshing and replacing the AWS-New Zealand Government Cloud Framework Agreement” - that is, the all-of-government deal that Crown departments and agencies use for buying Amazon services.
AWS also pitched Amazon’s ability to help the Government with big digital transformation projects such as IT elements of Three Waters. And it said, “we would like to discuss the potential of working with the New Zealand Government and the Auckland City Council on possible investments in water management projects and smart technology collaborations in the water sector as further collaboration on sustainability issues.” (The Three Waters technology lineup has yet to be finalised, but the multinationals SAP and Oracle are heavily in the frame, due to their incumbency with major councils. The pair work with AWS at times, and rivals Microsoft Azure and Google Cloud at others. In transport, Auckland Council-controlled AT has thrown in its lot with Microsoft).
AWS also asked Ardern to appoint an “empowered” minister or senior officials to collaborate on getting Overseas Investment Office consent without delays and to discuss bringing in skilled IT workers from overseas for specialised roles.
And it asked for help cutting red tape. “We would be grateful for the support of the New Zealand Government in facilitating, where appropriate, the timely consideration of consent applications to support the earliest possible Infrastructure launch.” It was a forward request, but it did come at a time when the Government was working to accelerate projects across the board as a pandemic recovery strategy.
A response from Ardern was broadly positive, but non-committal. Her later correspondence with Amazon focused heavily on its support for the Christchurch Call effort to reduce online extremism. She thanked Amazon for being responsive after a mass shooting in Buffalo (which was livestreamed on Amazon-owned Twitch) but added that the incident showed “our work is not complete”. Ardern also wanted to discuss how “the technologies that underpin the internet” could be kept “free, open, global, interoperable, reliable and secure” while “we are working to prevent terrorists and violent extremists from exploiting it for their own ends”.
A refreshed cloud deal, but others got one too
In July 2022, AWS announced it had struck a new cloud deal with the Government. But it’s difficult to portray that as the Government lining up to buy more Amazon cloud services because the tech giant had pledged to invest $7.5 billion here.
All-of-government deals were also refreshed with AWS’ arch-rival Microsoft, plus multinationals Oracle and SAP. The all-of-government deals involve panels of suppliers who agree to keen pricing and various other terms; government departments can then choose from the suppliers.
Amazon did not need an “in”. It has had an all-of-government cloud deal since 2017 and, with partners, has landed a string of contracts, including hosting the NZ Covid Tracer app and this country’s new online vaccination registry. The key difference with the new agreement is that government agencies can now deal directly with AWS if they don’t want to buy via a partner.
The 2022 round of government cloud deals also involved local cloud contender Catalyst gaining a chair at the table.
“Ours was a brand new agreement. We’ve been trying to get this for years so it was a big deal,” Catalyst director Don Christie told the Herald.
‘We don’t own superyachts’
But while it was good to get inside the tent, Catalyst didn’t get the same public displays of affection as enjoyed by its multinational rivals. Ardern met Amazon and Microsoft executives during her May 2022 trade tour of the US.
In a June 2022 letter, Catalyst invited Ardern to visit the firm’s Wellington offices “to discuss the importance of data sovereignty and our specific alignment with NZ Government goals”.
“On your trip [to the US], you visited two of the three cloud computing providers who are authorised to provide cloud services to the New Zealand Government - AWS and Microsoft - both companies owned by the richest men in the world, based in Seattle. We applaud you for supporting these relationships which will create opportunities for NZ companies to better do business with the world, and bring our countries closer together,” wrote Catalyst Cloud director Dave Moskovitz.
“But did you know that there is a third cloud provider based right here in Wellington? Catalyst Cloud is NZ’s only cloud provider that is owned by New Zealanders, answers only to the New Zealand legal system, whose purpose is specifically for the benefit of New Zealand, and has a Cloud Framework Agreement with DIA. We don’t own superyachts, private jets or spacecraft - I drive around in a 2007 Prius, because it’s the right thing to do.”
Ardern did not visit the Kiwi firm.