Australian data centre sector to hit $663m in FY16

The data centre sector is one of five Australian industries on pace to ‘fly’ in the new financial year, according to business information analyst firm IBISWorld.

The Australian data centre industry will grow 9.9% in FY16 to $663.1 million, joining oil and gas extraction, childcare services, beef cattle farming and funds management services as one of the economy’s top-performing sectors.

Growth in the data centre industry is being driven by increasing adoption of cloud computing and soaring data usage, IBISWorld said.

Businesses facing limited floor space and weight loading are expected to continue outsourcing servers to external data centre operators to accommodate demand while reducing costs.

“High data usage is taxing the capacity of in-house servers and driving businesses towards data centres, which can provide cost advantages through their high economies of scale,” IBISWorld senior analyst Ryan Lin said.

While data centre security is a concern, with businesses wary of passing on proprietary electronic information to a third party, the local industry is expected to benefit somewhat from these concerns as large customers are less likely to offshore their data centre arrangements as a result.

The overall Australian economy will be characterised in the new financial year by the transforming resource boom, technological advancement and changing levels of government support for some sectors, IBISWorld said.

Image courtesy of Stan Wiechers under CC