In the early 19th century, when the first settlers had barely penetrated the interior, Australia had already established trade with the Pacific Islands, India, China, South Africa, and the Americas. In many ways, this can be seen in the technology infrastructure space too. Demand for data center space remains high across the APAC region.
Australia’s data centre colocation market continues to push forward and the activity over the last 12 months has been eye opening. The country’s pro-data center sentiment and ability to establish data centers as “state significant development” has improved the permitting and development process, allowing the market to grow rapidly in 2Q 2022, according to an analysis by datacenterHawk.
The Sydney market is currently home to 51 unique colocation data centres with estimated total inventory in 2021 of 438MW, according to a report by Structure Research. The market is projected to generate US $1.054b in 2021, with a five-year CAGR of 17%.
New Data Centers in Play
This is also justified by a spate of new developments in the region. In February, ASX-listed NEXTDC, one of Australia’s leading data center services provider, has announced the availability of AWS Direct Connect in the NEXTDC S2 Sydney data center.
AWS Direct Connect is a cloud service that links an organisation’s network directly to AWS to deliver consistent, secure, low-latency performance. Using AWS Direct Connect, data that would have previously been transported over the internet is delivered through a private network connection between an organisation’s facilities and AWS. NEXTDC Chief Commercial Officer, David Dzienciol said:
“From real-time data analysis, rapid data backup, or broadcast media processing, we’re seeing a demand for high-bandwidth, dedicated connectivity which helps industries such as media and entertainment, Government, financial services, research institutions, and other large organisations experiment at speed and scale.”
In July 2022, Asia-Pacific hyperscale data center specialist, AirTrunk said that it has successfully completed the fifth building at its 130MW SYD1 data center campus located in Western Sydney, Australia.
Similarly, Following the signing of a $575 million joint venture agreement in March 2022, Equinix and PGIM Real Estate have opened the first xScale data center in Sydney, named SY9x.
Ecosystem in Place
A new Sydney data center will more efficiently meet the needs of customers in Australia and New Zealand as well as enable an increase in data performance and speed in these regions. While supporting state and federal agencies with their data collection, this Data Centre will also aid global organisations operating or looking to expand within the Oceanic region.
Sydney has 24 providers running its 34 data centers. There are building footprints for approximately 25 facilities in Sydney, adding up to 1,324,293 square feet, with the largest building covering 167,465 square feet, and containing the Equinix SY3 – Sydney facility.
Additionally, there are 14 carrier neutral data centers in Sydney. Out of a total of 34, 14 data centers offer remote hands support, one can host individual servers with nine, and 15 provide rack cabinet hosting.
A range of companies beyond traditional hyperscalers are now coming into Sydney. In April, Total Experience Management (TXM) software provider Alida announced that it will launch a data centre in Sydney in the winter of 2022.
As Digital permeates into every ambit of business, data centers tend to be energy guzzlers. However, with Paris Agreement and government diktats around mitigating climate change, efforts are underway to make the data center more green.
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 sit 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, noted Structure Research.
Australia, like other hyperscale markets, will go through build and expansion phases, followed by periods of digestion and absorption. All said and done, the industry is in the thick of action.
Join the conversation at W.Media’s Sydney Cloud & Datacenter event, where enterprise users and industry experts will come together to share their insights and opinions on data centre rollouts, sustainability initiatives and hyperscale cooling innovations. If you are interested in nominating or sponsoring, visit our Sydney CDC Convention