Australia's outsourced datacentre market rising on back of cloud computing

The Australian outsourced datacentre market is predicted to grow strongly for the next five years, according to Frost & Sullivan’s Australian datacentre services market 2015 report.

On the consumer side, this is being driven by increased consumption of videos, social networks, mobile data and gaming. On the corporate side, it is a result of the increased use of data-intensive applications.

None of this is surprising, but the rates of past and predicted growth are interesting. The report predicts annual growth of 13.7% from 2015 to 2020, with managed hosting to outpace co-location as more companies migrate to cloud services.

These forecasts are based on a starting point of 2014, in which the revenue from datacentre services in Australia was A$826m. That, in itself, represented growth of 18.3% compared with 2013, and a similar rate of growth is expected in 2015. Frost & Sullivan predicts that the rate of outsourced datacentre adoption will peak in 2015 and ease off in 2016 and 2017.

The report said wholesale datacentre providers, and those that focus on co-location services only, face significant pressure because of the trend towards using cloud services. Companies such as Amazon Web Services (AWS), Microsoft and IBM SoftLayer are driving strong growth in that respect. The government is also a strong driver, pushing out ever more data to third-party hosted centres.

But the big international companies aren’t having it all their own way. There’s space in the market for smaller players, and Frost & Sullivan sees that continuing over the next five years.

Audrey William, head of research, Australia and New Zealand ICT at Frost & Sullivan, said there are benefits for large and small providers, but noted that “specialist datacentre providers generally have the highest level of expertise in the datacentre services industry. Datacentre services are core to their business model, and are the only service they provide, unlike telcos and IT service providers, which offer a broader range of ICT services.”

Stronger data protection and privacy laws in Australia are affecting the Australian datacentre sector, particularly in government and financial services, said William: “The need for data to reside in Australia is important. For some organisations, it is important for the company to store the data within the state itself.”

The report’s general findings tally with the perception of Michael Pratt, director strategy and transformation at Dell ANZ: “The market analysis is suggesting that ANZ cloud adoption is two-and-a-half times that of other mature markets, such as the US, and we are seeing that at ground level as our customers continue to develop their cloud strategies.”