Australian data centre services market peaking

The Australian data centre services market is on track to grow at a strong CAGR of 13.2% through to 2020 as a result of growing adoption of cloud computing, Frost & Sullivan has estimated.

The research firm has estimated that the Australian data centre outsourcing market was worth $826 million in 2014, up 18.3% from last year.

Revenue is expected to grow at a similar rate this year (18.2%), with co-location services accounting for 69% of the total market.

But Frost & Sullivan expects the high growth phase of outsourced data centre adoption to peak this year and begin easing off in 2016 and 2017 as the rate of new data centre capacity being launched in the market slows down.

Co-location revenue growth is already starting to ease as a growing proportion of data centre clients migrate to cloud services. This is placing increasing pressure on wholesale data centre providers and those focusing only on co-location, Frost & Sullivan said.

But at the same time, this is providing ample opportunities for cloud services providers, the company added. Large providers including AWS, Microsoft and IBM SoftLayer are helping to drive growth in the market and are rapidly expanding their cloud capacity.

“As the Australian data centre services market expands, diversifies and matures, there are growing opportunities for niche providers specialising in specific verticals to enter the market,” Frost & Sullivan Senior Research Manager for Australia and New Zealand Phil Harpur said.

“For example, Canberra Data Centres and Australian Data Centres focus on the government sector in Canberra. The Australian Liquidity Centre (ALC), which is owned by the Australian Stock Exchange, services organisations in the financial services segment.”

He said growing market trends include the adoption of modular data centres that cater to segments requiring their own built facilities, as well as the trend of commercial property owners buying or building data centres then leasing the assets to specialist providers or individual companies.

Image courtesy of Roy Niswanger under CC