Why Google built its first Canadian cloud computing facility in Montreal

Quebec’s competitive electricity rates and proximity to Montreal’s burgeoning tech scene have made the city a cloud-computing destination

James Lambe

James Lambe, country manager for Google Cloud in Canada. (Peter Nowak)

Don’t look now, but Montreal is quickly becoming a cloud computing hotspot. Google has pegged the city to host a new data centre, making it the company’s first “Cloud Region” in Canada.

The move follows a similar announcement by Amazon, which recently opened a cluster of data centres around Montreal. IBM and French cloud computing company OVH have also set up centres in Quebec, as have several Canadian companies including Bell and Cogeco.

Amazon cited Quebec’s lower electricity prices, compared to Ontario, as a major reason for its decision to location in the province.

Google says its decision stems from Montreal’s large and growing pool of science and engineering talent.

“There’s a groundswell in artificial intelligence and machine learning happening,”  says James Lambe, country manager for Google Cloud in Canada.

The company did not specify how much it is investing or when the Cloud Region will be up and running, citing contract terms. Google has nearly 100 employees in Montreal already, as well as offices in Toronto and Ottawa and an engineering hub in Kitchener, Ont.

The company has six other Cloud Regions currently operating around the world – Oregon, Iowa, South Carolina, Belgium, Taiwan and Tokyo – and plans to open at least another eight this year in addition to Montreal.

Quebec Premier Philippe Couillard says the new data centre will help businesses in the province become more globally competitive.

“With an ever-changing business environment, our economic plan aims to help our businesses adapt to the new technological reality and foster the competitiveness of Quebec to attract investment for leading players,” he said in a statement.

“We are happy to welcome the addition of the Google Cloud Region in Montreal with which Quebec-based business and Canada will take another step into a 21st century economy.”

Lambe says the new Montreal Cloud Region, which will provide traditional data centre information hosting and also offer Google’s various services and customer support, will deliver both technical and regulatory benefits to Canadian businesses.

Customers who store their data in Google’s cloud will get faster access to it simply by virtue of being closer to it.

Perhaps more importantly, a growing list of countries – including Canada – are considering enacting regulations that would prevent businesses and organizations from storing their data abroad for security and privacy reasons.

By locating within Canada, Google says it can obviate such potential data sovereignty issues, especially for companies or organizations that are already prevented from hosting abroad because they deal with sensitive information.

“It allows organizations that have traditionally not been able to play in this particular space to take advantage of the real value and innovation this can bring,” Lambe says.

Some Canadian customers are fans of the move. Oakville, Ont.-based Geotab, which makes vehicle fleet-tracking systems, says that being able to house data in Cloud Regions outside the United States will help it expand to other countries, particularly in Europe.

“Having options about where the data is resident is great for us,” says chief executive Neil Cawse. “It’s so simple for us to deploy the data in these other countries.”

Google is facing an uphill battle in cloud services. The company only properly reorganized its various offerings, which include mapping, document collaboration, machine learning and artificial intelligence, into a proper cloud business last year after hiring VMWare co-founder Diane Greene in 2015.

Amazon has so far been running away with the business, accounting for about 40 per cent of the market, according to Synergy Research Group. The next three competitors – Microsoft, IBM and Google – only account for a combined market share of about 25 per cent or so.

The search giant is pushing hard, however, and announced a number of high-profile customer wins at its Next developer conference in San Francisco on Wednesday. Companies that have converted their IT systems to Google Cloud or are in the process of doing so include Disney, Colgate Palmolive, eBay and HSBC.

U.S. telecommunications giant Verizon has also switched to Google’s productivity apps, a big defection from Microsoft’s Azure cloud services, according to Bloomberg.

Geotab’s Cawse says his company is a similar defector, with Google’s services being considerably cheaper and easier to use than rivals’ offerings.

“They feel a little hungrier to me and they’re innovating pretty fast,” he says. “We’ve never looked back.”

Google chairman Eric Schmidt told conference attendees that he expects the company to be aggressive in trying to win new customers.

“We’re here for real,” he said. “And now we have the references.”