Sydney is a significant data center market in Australia, driven by factors including the deployment of 5G, the expansion of digitalization, and connection alternatives. In line with this, the most recent research report from Arizton projects that the Australia data center industry would generate USD 9.6 billion by 2027.
Sydney and Melbourne will receive 70% of all Australian data center investments in 2021. The Sydney data centers have attracted new data center investors like Stockland and Trifalga. On the other hand, Melbourne’s data center industry saw investment from a newcomer, STACK Infrastructure, for the construction of a data center facility. Microsoft also made investments in the construction of MEL5, its Melbourne data center.
There are numerous colocation operators in Australia. Retail colocation generates a sizable amount of money, whereas wholesale colocation continues to expand as a result of growing interest from cloud service providers.
The country’s Finance Ministry began utilizing digital data management services in 2021 as part of its Digital Records Transformation Initiative, in accordance with the three-year government initiative for modernizing the public sector in the country.
The country has excellent potential for renewable energy sources, supported by both operator initiatives and governmental actions. For instance, the Australian government recently unveiled its renewable energy strategy, which aims to produce 100% of the nation’s electricity from renewable sources by 2030. With the use of renewable energy, operators like NEXTDC and Equinix have also sought to achieve carbon neutrality.
Moreover, the report states that between 2022 and 2027, the Australia data center industry, one of the top markets in APAC, is predicted to increase at a rate of 45%. The cloud and IT sectors, followed by the government and BFSI organizations, are driving the market’s demand for colocation, with an average occupancy rate of over 75%.
More hyperscale developments will occur in cities like Sydney and Melbourne, while more edge data center deployment is anticipated in locations like Perth, Brisbane, and Adelaide. With programs like the “Industrial Land Strategy” for the development of industrial land and a goal to increase the proportion of renewable energy in the total power generated by 50% by 2025, the Australian government is promoting the expansion of data centers.
A number of new players have entered the industry as a result of its growth potential, including GreenSquareDC, STACK Infrastructure, Stockland, Supernode, Trifalga, and Vantage Data Centers. With edge operators like Edge Centres and Connected Farms announcing the implementation of edge data centers in the nation, the demand for edge data centers has also been rapidly increasing. In the upcoming years, cloud service providers are anticipated to expand their own facilities on the market.
