(WEB HOST INDUSTRY REVIEW) — IT services consultancy firm BroadGroup (www.broad-group.com) announced on Friday it has issued a new and updated report on the Australia and New Zealand Data Center markets which shows significant market growth over the past 24 months, but suggests that new build plans are slowing down when compared to other markets.
The report predicted that the next 12 to 24 months will bring a slower rate of expansion. The two countries currently have a total data center market value of $685 million.
From 2006 to 2008, data centers across the two countries have grown by more than 21 percent in number and by 33 percent in total capacity of raised floor space, with 19 new players entering the market with facilities during the same period.
The new report offers detail and reviews player and market segmentation, companies engaged in selling services into the data center sector, assesses occupancy rates, price movements and market value, a comparative analysis of metro markets in each country, and company profiles of all players who operate data centers.
The high cost of construction is increasingly becoming a major issue in some key metro markets, and yield requirements have caused pressure on new build developments leading to higher pre-commitments to reduce any risks.
In the meantime, the report reveals that data center builds will be focused mainly on Canberra and Sydney. And while developments in other cities are still planned, it is unsure as to whether they will go ahead.
The report projects that several projects over the next 12 to 24 months will result in postponement or cancellation.
There is also an increasing focus on the efficiency of current capacity.
In the next 12 to 24 months, pressure to upgrade data centers to compete with customer requirements, as well as compliance with new legislation in Australia.
However, data center managers will resist investing in high capex “Green” projects for at least the next year or so as the recession continues.
The report suggests that Australia and New Zealand data centers could still see an upswing if conditions predicted include a combination of increased demand for managed services, less available new build, the impact of consolidation in the hosting sector, and a level of sustained IT outsourcing to third parties.
These factors should collectively maintain current price levels, which have increased over the past two years, enabling the two country markets to continue to experience reasonable returns during the recession.
As the two country markets become more deeply integrated into the Asia economy, and Cloud services evolve, they stand to compete against Hong Kong and Singapore as an international location for data center business sites given the space, connectivity and regulatory infrastructure.
In November, BroadGroup reported that enterprise spending on data centers and data center outsourcing in Asia continues to increase, with data center floor area in Southeast Asia projected to increase 68 percent over the next five years on average.
