Australia’s data centre colocation market continues to be centered around the Sydney and Melbourne markets as the US-based hyperscale clouds have expanded aggressively and consistently over the last two years on the heels of accelerating adoption. While Australia is fairly considered a mature data centre market, hyperscale demand is expected to remain steady. There are some fears of an oversupply situation emerging, given the sheer pace of development and expansion, but the capacity plans are justified. Public cloud adoption has shown no signs of slowing down, supported by proactive government digital transformation and outsourcing initiatives on both a national and local level.
The competitive landscape dynamics in the Sydney and Melbourne markets are not as intense compared to other tier 1 markets in APAC such as Singapore, Hong Kong, Tokyo, Seoul and Mumbai. Part of the reason is due to Australia’s geographically isolated location from the rest of the APAC region. In other respects, many have underestimated Australia’s ability to be a magnet for prolonged cloud infrastructure growth given the mature IT outsourcing culture. The fact that China-based clouds are not expanding in Australia due to geopolitical tensions has also moderated entry into the market, along with the emerging self-build activity from the hyperscalers.
Despite the various moving parts, the market continues to grow and develop, and colocation demand is not expected to tail off. The Sydney data centre colocation market, now standing at 647MW of built out capacity, is projected to be worth US$1.5b in 2023 with a five-year CAGR of 16% through 2028. The Melbourne data centre colocation market, now standing at 218MW of built out capacity, is about half the size of Sydney and is projected to be worth $747m in 2023 with a five-year CAGR of 17% through 2028. As with most markets in the APAC region, hyperscale colocation growth is projected to outpace enterprise colocation growth.
The DCI report series (DCI: Data Centre, Cloud and Interconnection) provides comprehensive and granular tracking of data centre, hyperscale cloud and interconnection markets around the world. The data at the foundation of these reports is built on asset-level tracking and on-site visits of all the major sites in a given market. The aggregate market is measured on a rack and critical power basis — providing multiple views of a market that is adjusted for context. On top of this, the hyperscale component of supply and absorption is clearly identified, tracked, and projected, while build pipelines are clearly laid out. Hyperscale availability zones, self-builds, and cloud on-ramp locations are mapped out and provide an additional layer to the analysis of data centre clusters.
This report is the definitive resource for any datacentre operator, investor or end user (service provider, enterprise or hyperscale) that is looking to understand or project the third party data centre colocation market in the two major Australian metros of Sydney and Melbourne.