Time and Place
Western Australia shares a time zone with more than 60 percent of the world’s population including most of Australia’s key economic partners in China, Japan, South Korea and Singapore. Additionally, Perth is the only Australian capital city that has core business hours overlapping with Europe and the UK.
The government is currently consulting on Western Australia’s Digital Industries Acceleration Strategy and, according to the consultation, it has been been estimated that AUD $11 billion will be invested in technology in the state by 2030, with 95 per cent of Western Australian workers having at least 20 per cent of their work affected by critical technologies.
Data centre operator Equinix has three facilities in Perth and MD of Australia Guy Danskine has been watching the Western Australian Government’s stakeholder consultation process closely. He told W.Media he’s optimistic about the state’s digital future.
“We feel very strongly that Perth and the wider Western Australia will remain an important hub for data centre investment and congratulate the government on its achievements to date, assisting organisations like Equinix to support the state’s digital expansion.”
“Perth is unique in the sense of distance from other major cities; therefore dedicated digital infrastructure is even more important,” he said. “Additionally it’s proximity to South East Asia makes it an important connection point between Australia and the rest of the APAC. Hence why the recent investment in subsea cables to and from Perth in recent years.”
Equinix opened its third IBX DC in Perth (PE3) in late December 2021 and while Danskine believes the operator is currently “right-sized” for the market, technologies like AI are “creating a growing need for cloud adjacency and an increasing desire amongst businesses to maintain control of critical enterprise data in a private environment like Equinix’s facilities.”
“We are constantly evaluating every market we operate in and Perth continues to validate the strategic reasons we further invested in PE3 which has room for further expansion,” he said, adding that while most hyperscale investment is happening in Sydney and Melbourne, similar campus-like developments may potentially happen “down the road” by the industry. “Cloud providers entering a market is positive for the data centre industry in general,” he said.
Connectivity bonus
The state is well connected both nationally and internationally with subsea cables providing direct access to Southeast Asia, the Middle East, Europe and Sydney. These high capacity, low latency cable systems make the state an attractive investment location for providers of digital infrastructure and services.
“The state is uniquely positioned through continued subsea cable investments in and out of Perth, which continues to accelerate West Australia as a digital hub, empowering more businesses to capitalise on the opportunities facilitated by enhanced interconnection and constant development of technology,” he said. “The subsea cables terminating in Equinix facilities benefit the operator as they can distribute their capacity quickly our existing base of network providers. And those providers benefit from having access to multiple subsea cables.”
AI’s role in Perth’s DC development
WA is almost exclusively a cloud services market opportunity for DC operators, but for the time being, this is still growing. “We see Perth as an important network hub for the reasons mentioned above coupled with really strong demand from the mining and resource sectors as well as state government,” he said.
And while Equinix is not unique in prepping for the coming AI boom – witness recent initiatives from both NextDC and Macquarie among others – Danskine points out the Gartner stat that by 2026, over 80% of enterprises will have used GenAI APIs and models or deployed GenAI-enabled applications in production environments, up from just 5% in early 2023. “ We’re leaning into this opportunity and recently announced our expanded partnership with Nvidia for DGX private cloud at Equinix to ensure customers have a proven and rapid time-to-market solution to adopt advanced AI infrastructure.”
Perth has lower cost energy and real estate in comparison to the East Coast. However, it is also a long way away. Danskine believes this doesn’t just make the decision to build and operate a simple cost–versus–latency one – it’s more nuanced. “It’s workload dependent; as we are seeing in GenAI, LLMs aren’t necessarily latency sensitive however the inferencing outputs can be,” he said. “Perth could conceivably play a role in both.”
However, despite a vast landmass of more than 2.6 million sq km Danskine is confident the operator can supply the digital needs of WA companies without needing to build out edge facilities in the state. “There are very few use cases today with latency characteristics that requires infrastructure in such close proximity. The vast majority (90%+) of use cases can be met by infrastructure in capital cities such as our investment in Perth,” he said.
[Author: Simon Dux]