“A truly national data centre builder and operator”
After institutional investors piled in more than AUD $935m into the first round of NEXTDC’s recent massive raise in – even before the offer opens up to retail shareholders – most eyes were focused on which of its data centres in Sydney and Melbourne will receive the build capacity boost.
However, NEXTDC is a truly national data centre builder and operator and has initiatives underway in Darwin, Adelaide and the WA market, where it is first of the big players to build edge data centres to service the booming mining and resources sector. The focus upon emerging mining and operational applications to deliver improvements for automation, robotics and supply chain efficiencies is driving the sector to deploy digital infrastructure in closer proximity to mining operations.
NEXTDC chief customer officer David Dzienciol told W.Media that, while smaller, Perth and Western Australia have unique characteristics and, as a result, need to have their own standalone digital infrastructure – complete with multi-site redundancy planning options – to help advance the domestic digital economy.
“M&R companies have a huge opportunity to leverage infrastructure, systems, applications and data to enable business advantage,” he said, adding that this manifests right across safety, sustainability, productivity, cost reduction, business continuity and automation.”
With mining and resources representing a significant percentage of the WA economy, Dzienciol points out that these industries in addition to government represent the largest investors on digital transformation with the most to gain from accelerated and matured technology adoption. Importantly, given the size and regional importance of WA, many government and defence industries are now expanding operational centres in the remote and regional areas of the state.
This approach requires digital infrastructure which is connected, secure, resilient and in close proximity to mission critical government operations. Accordingly, secure access to edge-based facilities in WA is now increasingly important for this sector.
International connections
While the East Coast has an advantage connecting the the US, Perth’s proximity to South-East Asia and its already existing subsea cable connectivity give it an edge when it comes to regional connectivity. Vocus’s North-West Cable System (NWCS), which will connect to its Australia-Singapore cable plus Subco’s Oman-Australia Cable (OAC) launch in 2022 – not to mention its upcoming Sydney-Melbourne-Adelaide-Perth (SMAP) cable planned for deployment in 2026 – will create opportunities for new sovereign DC services serving SE Asia and WA.
Dzienciol said WA has the potential to become a gateway to the Asian digital economy. “The shortest route to Singapore from Australia (large) cities is from Perth,” he said. “This means that Perth is a great opportunity for international companies to deploy resilient infrastructure in secure and sovereign Australian to support Australian customers or as backup/redundancy/disaster recovery strategies.
He added: “Our D1 Darwin [facility] is emerging as an alternative to this value proposition for Perth but Perth has a much larger ecosystem and skills base to support digital transformation.”
NEXTDC’s P2 Perth is the landing station for subsea cables connecting Perth to Asia, the Pilbara, NW Shelf, Darwin and East Coast (Sydney). “This means the fastest most direct and secure routes for data to these markets is from P2 Perth,” he said. “It also means that customers that use these routes will have preference to deploy critical hardware right next to the access points for these international networks (i.e. colocated within the P2 Perth facility).”
What is the right size facility for Perth?
NEXTDC has the capacity to deliver more than 30MW across the Perth facilities and Dzienciol believes that is currently sufficient for the market. “We still have inventory that is selling well,” he said, adding that AI and accelerating digital transformation is going to create a significant increase in the need for secure, resilient and energy efficient data centres.
“Research firm 650 Group, LLC expects AI server shipments will rise from one million units last year to six million units in 2028,” he said. “This trend is applicable to the Australian (and Perth) market. All that power-hungry hardware needs to be housed in premium data centres.” NEXTDC has land banked adjacent to P1 (Malaga) as well as additional capacity at P2 (City) for future growth as customer demand requires expansion.
“P1 Perth (at Malaga) is nearing capacity,” said Dzienciol. “New deployments largely at P2 Perth (CBD). Future development of the P1 Perth site will be determined by customer growth and requirements driven by net new demand.”
Early days for AI
Dzienciol said low-latency cloud connectivity is currently a priority for many Perth-based organisations. “As a major driver of the WA economy, the resources sector (mining companies and their supply chains) underpin the demand for digital infrastructure in Perth,” he said. “The mining industry will be early adopters of AI, so demand for AI-ready infrastructure will accelerate in Perth as fast as anywhere else in the country. This includes Hyperscale platform providers, who are seeking to ensure that AI enabled cloud platforms are available in close proximity to their
customers.”
AI brings a unique set of design requirements for digital infrastructure and data centre facilities. This is why NEXTDC is investing in what Dzienciol describes as “world leading design and innovation” to ensure each of its facilities can support the production of AI in what is now termed AI Factories. This includes high-density power options, innovative cooling designs and designated areas for AI within the facilities.
As digital transformation accelerates AI adoption across so many organisations, so too does the footprint and complexity of the hardware that supports it. “Resilience, interconnection, security and sustainability gets harder, more specialised and expensive as AI and transformation matures,” he said. “Also, the skills and experience to manage infrastructure balloons and the need for an ecosystem of clouds, carriers and digital services that is required to extract full value compounds. This is all best facilitated by interconnecting within a resilient infrastructure facility.”
NEXTDC at the edge
NEXTDC made a statement of intent on edge compute when it decided to build Port Hedland PH1 – which is a cable landing station as well – and then follow up with its second edge data centre in the Pilbara region, at Newman, which will have an expected capacity of 1MW and will connect securely to PH1.
Dzienciol emphasised the builds were not speculative. “All of our edge DCs are customer driven,” he said. “The mining industry in WA is increasingly looking to what is known as a core-to-edge strategy where pit-to-port operations, production site automation, safety monitoring and digital transformation projects are managed from centralised Remote Operations Centres (ROCs).”
He added: “Meanwhile at the edge, critical infrastructure is still required to capture all of the data from automated extraction, processing and freight systems as well as IoT networks. It then needs to aggregate and transport this data to connected ROCs back in Perth.”
Dzienciol pointed out that the edge DCs at Newman and Port Hedland are also critical landing stations for the terrestrial and subsea cables that connect Perth to The Pilbara, NW shelf, Darwin and Asia.
PH1 will feature around 30kW per rack but Dzienciol said the only way is up. “Up to 30kW per rack is increasingly common for servers which are supporting high density computing,” he said. “We have experienced a range of these requirements, including the power delivery of 80kW to colocation racks in Sydney and Melbourne.” He added: “This next generation of servers for AI applications are now supporting the escalation of power which is up to 130-150kW for each AI colocation rack. This growth is why NEXTDC are investing to further develop AI-ready facilities on a national scale, including WA. It is critical that NEXTDC in WA are able to support customer demands for this scale of rack power when required.”
Cost versus latency
Perth is one of the most isolated cities in the world geographically, but in communications terms its is pretty much the reverse. However, Dzienciol emphasises that the customer demand for modernized infrastructure to support low-latency applications requires a local market presence for data centre operators.
“For transformative applications that capture and process a lot of data and require ultra-low latency for optimum business value, proximity is important. There are many such applications in the resources and mining industries in addition to government sectors,” he said, adding that where customer experience is a key objective, proximity is also important. “Think retail websites streaming services, citizen services and mission critical government operations, Microsoft Office applications or Google services.”
Dzienciol said some of the growth opportunity for digital infrastructure companies such as NEXTDC is around AI training models. These are very large, high-density deployments that require large campuses and lots of power for processing data which creates the need for effective and innovative cooling technologies. “They don’t necessarily have to be close the source of the data or so there will definitely be opportunities for large, interconnected data centre campuses to target low cost real estate and extremely efficient energy utilisation,” he said. “The future location of large AI campuses will be determined by access to low cost power, in addition to water, a skilled workforce and other features that mitigate risk such as fire, flood and weather,” he added.
[Author: Simon Dux]