Australia’s Data Centre Market Attracting Significant New Overseas Entrants

Albany, US, 2018-Jun-17 — /EPR Network/ — An innovative research report titled, “Australia – Data Centres and Internet of Things (IoT)” has been added to the research repository of Market Research Hub (MRH). It took over 20 years for the data centre market to reach its current position. The arrival of cloud computing, Big Data, M2M and IoT allowed for a large range of new services and applications, especially aimed at small and medium organisations. The data centre market includes telehousing facilities, co-location facilities, cloud and IT services, content hosting, connectivity and interconnection. They are important for a range of business and government applications including new developments of cloud computing and the Internet of Things (M2M).

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Currently the developments are highly centralised in the capital cities, but a more decentralised trend is expected to develop over time. Sydney datacentres currently offer the primary location for hubbing traffic for content and cloud providers, as well as content delivery networks. On an Asian regional basis, Sydney by 2018 was one of the four core hubs for the four biggest content providers – Netflix, Google, Facebook and Apple, along with Hong Kong, Singapore and Tokyo.

However, Melbourne will gain further importance as the second major content hub for Australia as new submarine cable projects bring to market the necessary connectivity routes. The arrival of five new cables is predicted to change the connectivity landscape for Australia, enabling new paths and routes. While traditional content providers have selected Sydney as key hub for their regional and global infrastructure, Melbourne will increasingly become a second alternative when the new cables deliver up new pathways in and out of Australia.

Data centre customers are migrating from co-location services and managed hosting to cloud services. Cloud providers are the fastest growing segment of most Australian data centre providers. The Government continues to increase in maturity in their understanding of cloud technologies, how to use cloud to the best of their advantage, and how to optimize their existing infrastructure.

Major global cloud service providers have huge growth expectations for Asia Pacific region and these providers are investing their capital to reflect their rapid growth. In response to this growth, a number of existing major Australian data centre providers such as Digital Reality and Metronode and new regional providers such as AirTrunk are ramping up local data centre capacity.

Australia has progressed to now be one of the four major sub-markets for data centres in Asia alongside Singapore, Hong Kong and Japan. Greater diversity however has led to the fact that it is now harder to serve the entire region from one location. The Asia-Pacific region is currently undergoing very strong wholesale colocation growth driven by large-scale global cloud providers including Amazon Web Service (AWS), Google, Microsoft and IBM as they expand aggressively in major hubs.

Market consolidation has already begun in Australia. Equinix recently acquired local data centre provider Metronode. The acquisition adds 10 datacentres and 20,000 square metres of colocation space to Equinix’s assets in Australia and gives it access to the markets of Canberra, Brisbane, Adelaide and Perth beyond its existing presence in Sydney and Melbourne.

At this same time new providers are entering the market. For example AirTrunk opened a hyperscale cloud, content and enterprise focused site data centre in Western Sydney. It will have total capacity in excess of 80 megawatts of IT load when fully completed, which will make it one of the largest carrier neutral data centres in the Asia Pacific region, housing mission critical infrastructure for some of the world’s biggest companies. This report overviews the different forms of data centres and gives an insight into the trends occurring in it, and the major players in the sector.

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With the move towards 5G well and truly underway it is important to look at what will be the value of IoT infrastructure to the development of a network that will be dominated by sensors and devices.

The infrastructure that is now being built offers a range of features such as ubiquitousness, affordability, low latency, high speed and high capacity. It will link millions of devices, such as sensors, that will enable us to manage our environment, traffic, infrastructures, and our society as a whole much more efficiently and effectively.

The ‘Internet of Things’ (referring more to personal devices such as wearables and smartphones) and M2M (referring to a more industrial use based on sensors) are starting to become real game-changers. They will transform every single sector of society and the economy and it will be out of this environment that new businesses – and indeed new industries – will be born. 5G will take a leadership role in the development of M2M but the NBN is also a key infrastructure element as more applications will require high quality video. These developments are closely linked to big data, data analytics, cloud computing and data centres and these elements all play a fundamental role in the success of this new infrastructure.

The number of Internet of Things connections on cellular networks will grow nearly five times over the next decade to 2027, driven by the automotive, utility and the security verticals.

Other high growth sectors to 2025, are likely to include smart home technologies, airport facilities automation, electric vehicle charging and in-store contextual marketing.

The home market will be a new battleground for telecommunications companies, retailers, energy suppliers, insurance companies and category specialists.

Key Developments

  • Emergence of Melbourne as a second key Australian data centre hub.
  • AirTrunk opens a hyperscale data centre in Western Sydney.
  • Global data centre provider Equinix acquires local data centre provider Metronode.
  • Cloud-based collaboration software provider Freshworks opens a datacentre in Sydney.
  • The Australian home Internet of Things market grew by over 50% in 2017 – 2018.
  • Telstra enters into a Smart City partnership with the Tasmanian State Government.
  • The Victorian state government announces a fund for digital agricultural projects.
  • Telstra turns on the first precinct of 5G-enabled Wi-Fi hotspots in the world.

Key companies mentioned in this report:

Canberra Data Centre (CDC), Australia Data Centres, Telstra, Optus, HP, Macquarie Telecom, Datacom Systems, Global Switch, Fujitsu, Hewlett Packard, Equinix, NextDC, Polaris, Digital Realty, IXnet, Metronode, Nextgen Networks, Vocus, AirTrunk, Freshworks, Optus, Telstra, IBM, Vodafone, CSIRO, Jasper, Bechtel, UniSA, Cobra, ARTC, Sydney Water, Sense-T.

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