Microsoft's NZ data centre a wise move, says GlobalData

Microsoft’s recent plan to build a regional data centre in New Zealand is both a wise investment move and a major economic booster for the country, according to data and analytics firm GlobalData.

The firm said that, given New Zealand’s low COVID-19 transmission rate — one of the best globally — the nation was an attractive market for data centre investments in the Asia–Pacific region.

In addition, the US$50–60 million hyperscale facility would bring much-needed cloud services to the local market — an important measure for business and government sectors, which require high performance and data sovereignty.

“Microsoft’s data centre investment in New Zealand comes against the backdrop of fast-paced digital transformation efforts … as the pandemic compels enterprises to make rapid transition to cloud, with operations now spread out and run from remote locations,” said GlobalData Technology Analyst Saurabh Daga.

The initiative will also accelerate digital transformation by enabling users to access enterprise-grade cloud services — including Microsoft Azure, Microsoft 365, Dynamics 365 and Power Platform — and meet their data hosting, security and compliance requirements.

“By enabling seamless access to enterprise-grade public cloud services [it] will empower business enterprises and other organisations in the country to build their digital capabilities and most importantly ensure that their critical and sensitive data is stored locally,” said Daga.

A further benefit of the facility is the added competition to a largely oligopolistic domestic market, says GlobalData. Until now, New Zealand’s data centre market has been largely led by local operators, such as Datacom, which last year invested around US$30 million to upgrade its existing four facilities.

“Once completed, [the project] will be the first major local data centre operator from an international player since IBM opened its data centre in Auckland’s East Tamaki back in 2013. While that may be of concern to the incumbents, the benefits of multimillion investments prove to be a major boost to the country’s digital economy,” Daga concluded.

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