New Zealand Data Center Construction Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2019 - 2022 |
| CAGR | 17.43 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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New Zealand Data Center Construction Market Analysis
The New Zealand data center construction market is projected to register a CAGR of 17.43% during the forecast period. The New Zealand government is taking initiatives to increase the infusion of technology into various services. Numerous FinTech startups in the country also increase the demand for data centers.
- The government of New Zealand announced the building of a data center worth USD 188 million in its Auckland air force base in April 2023 and is expected to complete construction by 2025. Such initiatives are expected to provide more opportunities for the vendors studied in the market.
- With the growing familiarity and knowledge of cloud environments, along with opportunities to operate mixed environments, organizations can make decisions about workload locations, which drives their dependence on data centers. Around 74% of New Zealand organizations believe they maintain a very high level of maturity in managing cloud and infrastructure environments. This was a 10-point rise over 2020, indicating organizations have greater experience managing modern, cloud-based infrastructure. There is also a growing understanding of where and why certain applications should be housed and managed.
- Furthermore, New Zealand aims to introduce open banking by 2025, making the sector the first to give consumers full control of their financial data. Proponents of "open banking" say it may allow consumers to share their banking data with other providers to get better and cheaper services than they already have. Australian banks, which dominate New Zealand's banking sector, are increasing their reliance on data to approve loans and better sharing of data to support this. The ability to automate large parts of loan processing is considered a way to cut costs by banks, which are a headwind due to rising interest rates and staff wages.
- Environmental, cost, and workforce-related challenges could restrain the New Zealand data center construction market. The environmental impacts are wide-reaching, impacting climate change, pollution, biodiversity, and natural resources. Though the challenges are broad, they present many opportunities for improvement and long-lasting positive impact. The cost of constructing the data center is also high, which could restrain small and medium enterprises from setting up a new center. The vendor's focus is on the regions that have lower costs for construction.
- Furthermore, the COVID-19 pandemic struck when demand for data center capacity expanded rapidly, and it applied restrictions to constructing new facilities. There was a specific impact on the market, such as data network traffic increased the traffic by increasing usage of applications such as Zoom and Microsoft Office, among others. Moreover, the pandemic caused challenges in constructing a data center due to disruption in the supply chain, which slowed down the market's growth. However, post-pandemic, the demand for data capacity has more than tripled, and companies are shifting toward a hybrid cloud environment. Hence, the market has seen a resurgence in data center construction.
New Zealand Data Center Construction Market Trends
Tier 3 is the Largest Tier Type
- Tier 1 and Tier 2 facilities are losing demand due to their inability to meet the growing uninterrupted business services. A growing number of global companies are creating business continuity services and are gradually shifting priority to Tier 3 and 4 data centers.
- The Tier 3 sector in the New Zealand data center market reached an IT load capacity of 47.03 MW in 2022 and is expected to register a CAGR of 5.63% to reach a capacity of 69.03 MW by 2029. Increased investments in the building affect data center infrastructure and technological advancements. It is expected to create lucrative opportunities for market growth by 2029.
- Tier 4 data centers are expected to be the fastest-growing segment, with a CAGR of 31.53%. The segment amounted to just 2 MW in 2022 and is expected to touch 13.62 MW by 2029.
- Pandemic-led demand for video conferencing, online schooling, entertainment, social networking, and platforms to support remote working led to a 47% Y-o-Y surge in global internet traffic in 2020, eclipsing initial forecasts of 28%. These services need data center facilities with 24/7 support, which Tier 3 and 4 facilities can offer.
- Other major demand drivers include global technology services companies catering to growing corporate requirements for remote working and other virtual arrangements. The wider adoption of 5G and further digitalization of healthcare and other government services will be the primary demand drivers of Tier 3 and Tier 4 data center growth within Asia-Pacific.
Telecom is Expected to Hold the Highest Market Share
- Introducing the 5G network in New Zealand in March 2021 will likely increase data center investments. Vodafone and Spark have already launched a 5G network. According to Opensignal, Vodafone customers with a 5 G-enabled device and subscription had an active 5G connection of 3.9% of the time compared to Spark, which had an active connection of 2.9% of the time.
- Telecommunications methods have changed over the years, and New Zealanders need reliable telecommunications services for many aspects of their daily lives. The proportion of active internet users has increased overall in line with global trends, supporting the country's ongoing digital transition. The Ultra-Fast Broadband Initiative is a New Zealand government program to build a fiber optic network covering 87% of the population by the end of 2023. It is a public-private partnership between the government and four companies, with a total government investment of NZD 1.7 billion.
- The broadband market is experiencing slow growth, driven primarily by new building construction in greenfield developments or urban renewals. The UFB government project reached over 1.7 million facilities and connected 63%, or 1.1 million. Fixed broadband subscribers are expected to increase due to an increase in households and a decrease in the number of underserved facilities that were previously unconnected. This drives the adoption of data centers in the telecom industry in the country.
New Zealand Data Center Construction Industry Overview
New Zealand data center construction market is fairly consolidated, with the top five companies occupying the majority of the market share. Some of the major companies are AECOM, Arup, Aurecon, Cyber Power Systems, and EcoCooling.
In April 2023, DCI Data Center (DCI Group) announced the completion of its cloud data center in Auckland, New Zealand. The data center is powered by 100% renewable energy to manage the multi-national cloud, classified government, and defense workloads. In addition, the company has plans to combine its Albany facility to offer 50 MW of capacity. This initiative by the company is expected to provide opportunities for new vendors in the market.
New Zealand Data Center Construction Market Leaders
AECOM
Arup
Aurecon
Cyber Power Systems
EcoCooling
*Disclaimer: Major Players sorted in no particular order
New Zealand Data Center Construction Market News
- April 2023: The government of New Zealand announced the building of a data center worth USD 188 million in its Auckland air force base and is expecting to complete construction by 2025. Such initiatives are expected to provide more opportunities for the vendors studied in the market.
- March 2022: T4 Group announced the construction of a tier 4 data center in New Zealand's south island. The project is expected to be built at a cost of USD 34.6 million and would have an IT load capacity of over 11 MW. The construction is expected to be completed by 2024.
Table of Contents
1. INTRODUCTION
1.1 Study Assumption & Market Definition
1.2 Scope of the Study
2. Research Methodology
3. Executive Summary
4. MARKET INSIGHTS
5. Market Overview
6. Industry Attractiveness - Porter's Five Forces Analysis
6.1 Bargaining Power of Suppliers
6.2 Bargaining Power of Buyers
6.3 Threat of New Entrants
6.4 Threat of Substitutes
6.5 Degree of Competition
7. Key Industry Statistics
7.1 IT Load Capacity
7.2 Raised Floor Space
7.3 Colocation Revenue
7.4 Installed Racks
7.5 Rack Space Utilization
8. MARKET DYNAMICS
9. Market Drivers
9.1 Increasing Rate of Data Traffic
9.2 Adoption of Colocation Services For Cost Effective Solution
9.3 Thriving Digital Transformations Fueling Data Center Demand
10. Market Restraints
10.1 Limitations on Data Security Features
11. MARKET SEGMENTATION
11.1 By Infrastructure
11.1.1 Electrical Infrastructure
11.1.1.1 UPS Systems
11.1.1.2 Other Electrical Infrastructure
11.1.2 Mechanical Infrastructure
11.1.2.1 Cooling Systems
11.1.2.2 Racks
11.1.2.3 Other Mechanical Infrastructure
11.1.3 Other Infrastructure
11.2 By DC Size
11.2.1 Small
11.2.2 Medium
11.2.3 Large
11.2.4 Massive
11.2.5 Mega
11.3 By Tier Type
11.3.1 Tier 1 & 2
11.3.2 Tier 3
11.3.3 Tier 4
11.4 By End User
11.4.1 IT & Telecommunication
11.4.2 BFSI
11.4.3 Government
11.4.4 Healthcare
11.4.5 Other End User
12. COMPETITIVE LANDSCAPE
13. Company Profiles
13.1 AECOM
13.2 Arup
13.3 Fortis Construction
13.4 Aurecon
13.5 Cyber Power System
13.6 Schneider Electric SE
13.7 EcoCooling
13.8 Colocity Pty Ltd
13.9 Airedale International Air Conditioning
13.10 Arista Networks
13.11 Iris Global
13.12 Icon Co
13.13 Eaton Corporation plc
13.14 Dell Technologies
13.15 Cisco Systems
- *List Not Exhaustive
14. INVESTMENT ANALYSIS
15. MARKET OPPORTUNITIES AND FUTURE TRENDS
New Zealand Data Center Construction Industry Segmentation
Data center construction combines physical processes used to construct a data center facility. It chains construction standards with data center operational environment requirements.
The New Zealand data center construction market is segmented by infrastructure (electrical infrastructure, (ups systems, and other electrical infrastructure), mechanical infrastructure (cooling systems, racks, and other mechanical infrastructure), and other infrastructure), data center size (small, medium, large, massive, and mega,), by tier type (tier 1 and 2, tier 3, and tier 4), and end-user ( it & telecommunication, BFSI, government, healthcare, and other end users). The market sizes and forecasts are provided in terms of USD for all the above segments.
| By Infrastructure | |||||
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| Other Infrastructure |
| By DC Size | |
| Small | |
| Medium | |
| Large | |
| Massive | |
| Mega |
| By Tier Type | |
| Tier 1 & 2 | |
| Tier 3 | |
| Tier 4 |
| By End User | |
| IT & Telecommunication | |
| BFSI | |
| Government | |
| Healthcare | |
| Other End User |
Frequently Asked Questions
What is the current New Zealand Data Center Construction Market size?
The New Zealand Data Center Construction Market is projected to register a CAGR of 17.43% during the forecast period (2024-2029)
Who are the key players in New Zealand Data Center Construction Market?
AECOM, Arup, Aurecon, Cyber Power Systems and EcoCooling are the major companies operating in the New Zealand Data Center Construction Market.
What years does this New Zealand Data Center Construction Market cover?
The report covers the New Zealand Data Center Construction Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the New Zealand Data Center Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
New Zealand Data Center Construction Industry Report
Statistics for the 2024 New Zealand Data Center Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. New Zealand Data Center Construction analysis includes a market forecast outlook to for 2024 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.
