~ Australia an advanced data centre service market in APAC; revenues in excess of A$1.5 billion by 2019~

SYDNEY, May 20, 2013 /PRNewswire/ -- Australia is one of the most advanced data centre services market in the Asia Pacific region in terms of market size. Frost & Sullivan estimates that 40% or 200,000 square metres of approximately 500,000 square metres of data centre space in Australia is outsourced.

In 2012, the average revenue was around A$3,000 per square metre. Over the past decade, this market opportunity has attracted many leading global data centre service providers to establish a local presence in Australia.

Significant data centre build outs are occurring across Australia in response to the strong growth in data usage, the demand for local data centres and the increasing propensity of Australian organisations to outsource data centre operations.

Frost & Sullivan new analysis, Australian Data Centre Services Market 2013 finds that the market will reach revenues of over A$1.5 billion by 2019. The growth rate of data centre outsourcing and the need for greater data centre space will continue to stimulate demand, providing significant growth opportunities for most service providers.

Mayank Kapoor, Industry Manager, Data Centre Services and Cloud Computing, Frost & Sullivan Asia Pacific says that key factors driving demand for outsourced data centre services include the tightening of IT budgets, the need to establish business redundancies and refresh current facilities and the enhancements in enabling infrastructure through initiatives such as the National Broadband Network (NBN).

"Challenging factors for data centre service providers include increasing operating costs, competition, data sovereignty concerns and the need to retain talent," Kapoor elaborates.

Kapoor explains that high-end co-location and interconnect providers will see healthy growth, as demand increases for secure, latency-sensitive applications. "New data centres with the latest power and cooling technologies will attract more demand than those with dated power and cooling technologies," he added.

The Government is the largest vertical for data centre services accounting for over one-quarter of the market, with the Banking, Financial Services & Insurance (BFSI) sector and the Telecommunications/IT sector the other key demand verticals.

The amount of computing power housed in data centres will grow at a very strong rate as a result of multiple factors such as the increasingly ubiquitous usage of rich media (voice and video), growing broadband speeds and the rapid adoption of cloud computing. Data centres that make a push towards offering managed services at the higher end of the value chain will benefit more from this trend than data centres focused on co-location, due to their ability to charge a higher price per square foot of space.

As cloud computing increasingly gains adoption in Australia, several global software-as-a-service (SaaS), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS) market participants will offer their services in the Australian market.

Given stringent customer expectations surrounding data sovereignty and latency, many of these service providers will look to offer their cloud services from data centres within Australia.

While some providers such as Amazon and Rackspace will lease space from pure co-location providers, others will establish their own local data centres to gain control and flexibility in their service offerings. As a time frame of 18-24 months is required to construct a tier-3 or tier-4 data centre, acquisition of an established data centre may be the quickest route to serve the local market.

Frost & Sullivan's report, Frost & Sullivan Australian Data Centre Service Market 2013, forms a part of the Frost & Sullivan Cloud Computing Research program. All research services included in this subscription provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. For media queries and more information please send an e-mail with your contact details to Donna Jeremiah, Corporate Communications, at djeremiah@frost.com.

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SOURCE Frost & Sullivan