~ CAGR of 13.2% forecasted to 2020 - managed
hosting services to outpace co-location ~
SYDNEY, Sept. 2, 2015 /PRNewswire/ -- As a result of
increased adoption of cloud computing, driven by the consumer
segments increased consumption of videos, social networks, mobile
data and gaming, and the corporate sectors use of data intensive
applications, the Australian outsourced data centre market
continues to grow strongly.
Photo: http://photos.prnewswire.com/prnh/20150902/263069
In 2014, data centre services revenue in Australia totalled A$826 million; a growth of 18.3% over 2013.
Co-location service accounted for approximately 69% of the total
data centre services market. According to Frost & Sullivan's
new report, Australian Data Centre Services Market 2015,
Australia's high growth phase of
outsourced data centre adoption will peak in 2015 and ease off in
2016 and 2017 as the rate of new data centre capacity entering the
market slows down.
Data centre services revenue for 2015 is predicted to grow by
18.2%, but whilst managed hosting continues to see strong revenue
growth, co-location revenue growth is beginning to ease as an
increasing proportion of data centre clients migrate their
co-location and managed hosting services to cloud services.
Phil Harpur, Senior Research
Manager, Australia & New Zealand ICT Practice, Frost &
Sullivan said that wholesale data centre providers and those that
focus on co-location services only, face significant pressure
because of this trend. However, the growth of cloud services has
been a key factor in developing new business opportunities for data
centre specialist providers.
Frost & Sullivan predicts the Australian data centre
services market to grow at a CAGR of 13.7% from 2015 to 2020.
Managed hosting will experience stronger growth than co-location
over this period, as demand decreases due to companies migrating
from co-location to cloud services.
Cloud providers, especially larger global providers such as AWS,
Microsoft and IBM SoftLayer are driving strong growth in the market
and rapidly expanding their cloud capacity, whilst the government
sector continues to increase its use of third-party hosted data
centres. Demand is also growing for disaster recovery and business
continuity services. Connected, multi-tenanted data centres are
best placed to provide these services. Most third-party data centre
providers in Australia have
multiple data centres in multiple locations.
The average power density requirement of data centres is now up
to 40KW to 50KW per rack and continues to increase in line with the
increasing demand for high-performance computing applications. As
rack densities decrease, physical data centre space needed
declines. This trend impacts data centre providers offering
co-location services on both a retail and wholesale level.
Harpur said, "As the Australian data centre services market
expands, diversifies and matures, there are growing opportunities
for niche providers specialising in specific verticals to enter the
market. For example, Canberra Data Centres and Australian Data
Centres focus on the government sector in Canberra. The Australian Liquidity Centre
(ALC), which is owned by the Australian Stock Exchange, services
organisations in the financial services segment."
"To cater to the growing demand for data centre services,
specialist providers, including local providers such as NEXTDC,
Metronode and Canberra Data Centres, and global providers such as
Equinix, Global Switch and Digital Realty, have added data centre
capacity, either by expanding their existing data centre facilities
or building new ones. A growing trend for large IT service
providers and telcos that own their own data centres is to
consolidate their data centre footprint by shutting down older,
less efficient data centres and leasing data centre space within
the larger and newer facilities of these data centre specialists,
as it is more cost effective, "added Harpur.
Specialist data centre service providers are carrier neutral,
which encourages the development of business ecosystems within
their data centres. This is attracting both local and global cloud
providers to their data centres. Cloud providers are driving
greater diversity as they attract a range of other companies, such
as IT service providers. Thus a virtuous cycle has been created
with these data centres.
The adoption of modular data centres is still in an early growth
phase, however, momentum is beginning to build in the market and
stronger adoption will occur as prices fall further. Modular data
centres cater to niche segments of the market where companies or
government departments require their own built facilities. They
have higher relative cost, and most are deployed in outdoor and
often remote locations, in industries such as healthcare,
education, construction, mining, defence, manufacturing, oil and
gas and renewable energies.
"Another growing trend over the last two years is for commercial
property owners to acquire existing data centres or build new data
centres and then lease them to data centre specialist providers, IT
service providers or individual companies. Examples include Asia
Pacific Data Centres (APDC) and Keppel DC Real Estate Investment
Trust, both of which have purchased facilities from major local
data centre providers," said Harpur.
Data centre providers have several challenges. Significant new
data centre capacity has entered the market over the last few years
causing lower than average occupancy rates, and placing downward
pressure on data centre pricing. However, additional capacity is
generally being absorbed quickly. Securing sites in CBD locations
and gaining access to sufficient power is increasingly challenging
and it is becoming increasingly difficult for data centre owners to
plan for additional capacity.
Frost & Sullivan's Australian Data Centre Services Market
2015 forms part of the Frost & Sullivan Australia and New
Zealand Cloud, Data Centre and Infrastructure 2015 research
program. All research services included in this subscription
provide detailed market opportunities and industry trends evaluated
following extensive interviews with market participants. If you are
interested in more information on these studies, please send an
e-mail with your contact details to Donna
Jeremiah, Corporate Communications, at
djeremiah@frost.com.
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