Australia Data Center Networking Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Australia Data Center Networking Market Trends and Insights

Rapid rollout of hyperscale and cloud facilities

Operators are shifting from capacity-led builds to capability-driven designs that prioritise interconnection density. NEXTDC’s 550 MW Sydney land bank and Equinix’s AUD 240 million twin-city expansion highlight a push toward leaf-spine topologies optimised for 400 GbE fabric. Stack Infrastructure’s AUD 1.3 billion fund-raising signals global capital’s confidence that Australia data center networking market growth will pivot on these hyperscale builds.

Surge in AI/ML-driven east-west traffic

Cisco’s Nexus HyperFabric AI platforms are arriving in Sydney labs to handle RDMA over Converged Ethernet traffic, where microsecond latency swings stall model training.^{[1]Cisco, “Nexus HyperFabric AI Solution Brief,” cisco.com} Financial giants such as Commonwealth Bank run 2,000 models over 157 billion data points, pushing sustained east-west loads that demand non-blocking 400 GbE switching. Facilities certified under NVIDIA’s DGX-Ready program, including NEXTDC’s, show how purpose-built cold-aisle containment and low-jitter fabrics become competitive differentiators.

Migration from 10/25 GbE to 100/400 GbE fabrics

Wholesale carrier Devoli and Juniper Networks built Australia’s first end-to-end 400 G backbone, a ten-fold capacity uplift positioning the firm for 800 GbE scalability^{[2]Juniper Networks, “Devoli Launches 400 G Backbone,” juniper.net}. Dell Technologies’ Enterprise SONiC Distribution lets operators uncouple network operating systems from merchant-silicon hardware, avoiding refresh traps as Australia data center networking market transitions to 400 GbE. 

Government incentives for sovereign data-residency

The Defence Department’s move from Global Switch to locally-owned Canberra Data Centres underscores how policy anchors load in Australian-controlled real estate, demanding micro-segmented 100 GbE fabrics capable of inline inspection. The Digital Transformation Agency’s hosting strategy obliges agencies to split workloads across hybrid clouds while enforcing zero-trust networking.

High capex for 400 GbE/800 GbE optics

A smaller national procurement base keeps per-port prices high because Australian buyers cannot unlock the scale discounts enjoyed in North America or China. Supply-chain lags still affect 80% of global switch makers, with tariffs adding further price pressure for the Australia data center networking market 

Limited pool of specialised network engineers

Infrastructure Australia projects a 93,000-person shortfall across technical trades by 2028, directly constraining deployment velocity for software-defined fabrics. Scarcity is more acute in Tier-2 cities, delaying regional edge-colocation schedules even when capital is available.^{[3]Infrastructure Australia, “Infrastructure Workforce Forecast 2025-2030,” infrastructureaustralia.gov.au}

Segment Analysis

By Component: Services Accelerate Despite Product Dominance

Products accounted for 68.2% of the Australia data center networking market share in 2024, anchored by high-density leaf-spine switches, routers, and optical interconnects demanded by hyperscale halls. The installed hardware base is expanding as national capacity grows from 1,350 MW in 2024 to 3,100 MW by 2030, underpinning predictable refresh cycles. Services, however, post the fastest 8.1% CAGR to 2030. Tight labour supply and the sophistication of open-networking stacks make integration and lifecycle management a recurring spend priority.

Managed network services providers are bridging Australia data center networking industry skills gaps by offering 24×7 telemetry, intent-based configuration, and automated compliance reporting. Demand for design consulting and training likewise accelerates as organisations grapple with SONiC roll-outs and GPU cluster cabling that deviate from legacy topologies. Thus, expenditure shifts from one-off capital equipment to continual operating outlays attached to multi-year service agreements.

By End-User: Healthcare Velocity Contrasts IT Dominance

IT & Telecommunications retained 36.5% of segment revenue in 2024, driven by operators running both wholesale infrastructure and consumer connectivity products. Telcos leverage their national fibre backbones to market low-latency cross-connect fabrics within carrier-neutral sites, reinforcing their role as anchor tenants for wholesale networking gear.

Healthcare & Life Sciences registers a 6.40% CAGR, the fastest among verticals, as genomic testing and digital pathology create sustained 100 GbE east-west loads. QIAGEN’s Melbourne build for clinical next-generation sequencing mirrors rising sovereign-data expectations in the sector. Financial services retain steady outlays, evidenced by the Commonwealth Bank example above, while government workloads gain momentum under cyber-security mandates that elevate segmentation and encryption needs.

By Data-Center Type: Hyperscaler Momentum Challenges Colocation Leadership

Colocation captured 52.3% of the Australia data center networking market size in 2024, benefiting from network-effect economics around interconnection hubs. Providers like NEXTDC and Equinix distribute the cost of 400 GbE fabrics across dozens of tenants, keeping port pricing competitive and allowing rapid turn-up of cross-connects.

Hyperscaler and cloud-service-provider builds post a 9.3% CAGR through 2030, the fastest of all facility types, propelled by AWS’s USD 2 billion top-secret cloud, Google’s Melbourne cloud region, and Microsoft’s Canberra Azure Government zone. Their designs embrace liquid-cooled GPUs connected via 800 GbE, setting new baselines for port-to-rack density that traditional colocation halls now emulate. Edge/micro-data-center roll-outs in mining towns like Newman broaden geographic dispersion but remain niche in revenue contribution.

Note: Segment shares of all individual segments available upon report purchase

By Bandwidth: Migration Patterns Signal Infrastructure Evolution

The 50-100 GbE tier retained 36.4% of 2024 revenue, making it the functional baseline across enterprise and many colocated racks. Operators extend asset life by upgrading optics within the same switch line-cards, delaying wholesale chassis swaps. Yet, the greater than 100 GbE segment is advancing at 9.7% CAGR, reflecting capex front-loading for AI clusters.

Devoli’s 400 G backbone illustrates how wholesale carriers prepare for 800 GbE interfaces by first standardising coherent-optic roadmaps. Meanwhile, ≤10 GbE and 25-40 GbE links shrink rapidly outside of out-of-band management networks and edge appliances. Users therefore plan hybrid fabrics where legacy SAN traffic coexists with 400 GbE east-west flows until full application refactoring completes.

Geography Analysis

Sydney retains primacy as the nation’s digital-traffic core, hosting multiple cable landing stations and the largest contiguous block of hyperscale hall capacity. Equinix extended its SY series sites with 4,175 AI-ready cabinets during 2025, ensuring direct cloud on-ramps and sub-millisecond metro access. Melbourne follows with a projected 45% interconnection bandwidth CAGR to 2026, driven by spill-over demand and state-level incentives for fintech and creative-media workloads.

Tier-2 cities demonstrate sharper percentage growth, albeit off smaller bases. NEXTDC inaugurated Adelaide’s first Tier IV facility in mid-2024 to serve aerospace and defence clients who need five-nines uptime. Perth gains strategic value through Zscaler’s point-of-presence inside Equinix, bolstering cybersecurity posture for mining and LNG operators. Darwin’s AUD 80 million expansion supports northern defence logistics and cross-border traffic into Southeast Asia.

Regional micro-centres arise along supply-chain corridors such as the Pilbara, where edge racks collect IoT telemetry before relaying to Perth 100 GbE aggregation points. However, capital recovery remains challenging because lower rack densities dilute economies of scale. As a result, most high-port-count spine switches still deploy in Sydney and Melbourne, reinforcing their market gravity.