The Australian data centre (DC) market is rapidly expanding, forecast to reach over A$3bn by 2026 with nearly 1,200 MW of capacity. Current revenues are A$1.5bn with 530 MW capacity

Currently, a majority of data stored in outsourced DCs are from enterprise and government clients. However, the market is moving towards the hyperscale segment, due to ongoing shift to cloud-based computing. We predict hyperscale to generate 35% of total DC revenue in 2026, occupying 50% of total supply

The major providers of DC capacity in Australia are a mix of international players and Australian based DC specialists. We predict that relative market shares of these players will converge over time due to relatively small areas of product and service differentiation

Driving the DC market is the submarine cable industry with four new cables planned. Perth and Brisbane are key growth areas, while Sydney will continue to remain the market leader by a large margin. A cable landing station was completed in Sunshine Coast in September 2019.

This report provides a comprehensive view of the Australian data centre market and the key data centre operators, including NextDC, Global Switch, Equinix, AirTrunk, and others. This report also provides a 5 year forecast of the Australian data centre market. 

Contents

Executive summary

• Australian Data Centres Revenue
• Australian Data Centres Supply
• Builds and Trends
• Australian Submarine Cables

Revenue by players

• Major data centre providers will gain an increasing share of total market revenue as brand recognition and access to international sites attract larger clients

Revenue by segment

• Hyperscale (cloud) is by far the fastest growing data centre segment. Enterprise will remain the largest in absolute terms as companies transition towards cloud storage

Supply volume by player

• Providers will look to boost their capacities to accommodate for hyperscale demand, but relative market shares will remain stable

Supply volume by geography

• Sydney and Melbourne will remain the two largest data centre hubs due to their international standing, but Perth and Brisbane will grow quickly due to future submarine cable landings

Pricing and supply volume by segment

• There will be a rapid growth of supply due to hyperscale demand, reaching 50% of the total supply in 2026, which should drive down pricing

Growth in Data Centre Market

• The DC market has a strong growth outlook, particularly in the hyperscale segment, driven by data growth and customer shifts to outsourced DCs and cloud-based IT services

New builds and government funding

• Both international and domestic data centre companies have made announcements in the past 12 months, with the majority in Sydney and Melbourne

Data Centre Trends – Edge Computing

• Edge computing and 5G will be a major technology driver of data centre growth, bringing complementary benefits to networks who are cloud dependent

Submarine Cables – Australia

• Australia has eleven international submarine cables terminating on the mainland. Four cables are in development

Submarine Cables – Summary

• Most submarine cables terminate at Sydney due to its international standing and geographical proximity to North America. Four additional cables will be operational in near future

Submarine cables – Trends and drivers

• With new submarine cables set to be operational in the next few years, capacities and demand will increase, and price will decline

List of charts/tables

Figure 1: Outsourced data centre revenues by segment (%)

Figure 2: Outsourced data centre revenues by player (%)

Figure 3: Data centre revenue by segment ($m)

Figure 4: Supply volume by player (%)

Figure 5: Supply volume by geography (%)

Figure 6: Supply volume by geography, 2019 estimate (MW)

Figure 7: Supply volume by segment (%)

Figure 8: Pricing by segment ($m/MW)

Figure 9: Conventional cloud vs edge computing comparison

Figure 10: Map of Australian submarine cables