Australia Data Center Construction Market Size

Australia Data Center Construction Market Analysis

Australia data center construction market is projected to register a CAGR of 6.73% during the forecast period. The increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers in the country.

• Government initiatives like the Australia Government Information Management Office (AGIMO) are leading the way in optimizing data center resources with the introduction of the Australia Government Data Centre Strategy 2010-2025. The strategy represents a transition from using government-run data centers to third-party, multi-tenant data centers.
• The data center providers are also increasingly investing or adopting an acquisition strategy to expand their capacity. For instance, Metronode's data center assets acquisition by Equinix provided the company with additional capacity to capture the benefits of scale and added approximately 20,000 square meters of gross colocation space to Equinix's footprint in Australia.
• There has been robust development of new data centers which use renewable energies. For instance, during the second wave of the pandemic, 3 data centers as part of Project Koete were proposed for Western Australia and Northern Territory by the Australian company Fibre Expressway. The tier IV standard data centers with an initial capacity of 20 MW each were constructed in partnerships with wind, solar, and long-term ocean and clean hydrogen providers to satisfy 100% renewable energy access over time. Such projects propel the market's growth in Australia.
• There is a lot of concern about cybersecurity, especially when it comes to digital access and who can connect with a server and its data. Nevertheless, maintaining physical security might be quite difficult. Even in a secure environment, anyone with the necessary access can damage or utilize servers. Data centers need to be safeguarded against potential catastrophes like water leaks, fires, and cooling system failures, which are very expensive and restrict the growth of the data center market in the country.
• The COVID-19 outbreak increased the demand for cloud computing in the country; and it also expanded the scope of the data center market. The data center construction projects mostly continued as construction is classified as essential under the current Australian regime and is the vital sector to keep the country's economy running. However, the market also witnessed supply chain disruptions with the labor shortage, expecting a delay in the completion of several projects.