Report by Structure Research
Australia’s data centre colocation market continues to push forward and the activity over the last 12 months has been eye-opening. This is a market on the cusp of an aggressive growth wave fueled by hyperscale cloud. The Sydney market is currently home to 51 unique colocation data centres with estimated total inventory in 2021 of 438MW. The market is projected to generate US $1.054b in 2021, with a five-year CAGR of 17%.
Melbourne tracks behind Sydney with 30 unique colocation data centres and is projected to generate $489m in 2021 with a five-year CAGR of 17.6%. Melbourne’s total inventory in 2021 is estimated at 174MW. For both Sydney and Melbourne, the hyperscale part of the market is growing about double the rate of the retail segment on a five-year CAGR basis.
Despite the fact Australia is considered a mature data centre market, hyperscale demand is still in its early stages. The next wave will see builds move into the triple-digit MW range in both Sydney and Melbourne. It is easy to worry about oversupply, but this view is presumptive and does not square with the facts on the ground. This is a market that has seen unprecedented levels of cloud adoption and an extremely proactive and supportive government is driving digital transformation initiatives. Australia, like other hyperscale markets, will go through build and expansion phases, followed by periods of digestion and absorption. That is exactly what is happening here. Australia is set to build out its next wave of capacity and things will slow as all the MWs get consumed. After that, the cycle will repeat itself. But a glut or oversupply situation will simply not emerge.
The DCI report series (DCI: Data Centre, Cloud and Interconnection) provide comprehensive and granular tracking of data centre and interconnection markets around the world. The data at the foundation of these reports is built on asset-level tracking and on-site visits of all the major sites in a given market. The aggregate market is measured on a space, rack and power basis – providing multiple views of a market that is adjusted for context. On top of this, the hyperscale component of supply and absorption is clearly identified, tracked and projected, while build pipelines are clearly laid out. A view of the market is presented for the present day, projected on a five-year basis and also includes a theoretical maximum that provides a picture of full capacity if all data centre assets – land banks, expansion plans – are converted to live inventory. Hyperscale and cloud on-ramp locations are mapped out and provide an additional layer to the analysis of data centre clusters. Finally, the value of the market, equivalent to total colocation spend, is estimated and projected on a five-year basis.
This report is the definitive resource for any data centre operator, investor or end user (service provider, enterprise or hyperscale) that is looking to understand or project the third party data centre colocation market in the two major Australia metros of Sydney and Melbourne.
Total 65 pages.