Here’s why Perth is the best place to build a data centre in Australia right now
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DC Alliance CEO Albert Wong tells Private-i why Perth — commonly known as a mining centre — is also well-positioned to be a key region for global data communications.
When we were deciding where our next data centre would be, Perth’s proximity to Asia and its growing reputation as a regional innovation hub meant it was a no-brainer.
We have gone to market and our project is underway for what will be the only Tier IV data centre in Perth, with 400 racks and the potential to expand this to 600 racks.
It’s a major investment, and we wouldn’t be undertaking this new venture if we didn’t think the market demand wasn’t there.
But the reason we’re doing so is that Perth is the only major city in Australia on the GMT+8 time zone, which will be the most important time zone if Australia is to truly embrace the Asian opportunity.
When people talk about Australia’s relationship with Asia, it’s often through the lens of iron ore and gas exports — but new infrastructure has meant that a whole new commodity will flow out of Perth: data.
New infrastructure, new opportunities
Two cables being run from Perth to Asia have the potential to fundamentally alter the data flow between the two locations — much like new shipping routes add more physical export opportunities.
The INDIGO subsea cable connects Perth with Jakarta and Singapore, and the cable’s two pairs will be able to offer up to 36 terabits per second.
That’s roughly the equivalent of streaming millions of movies a second.
Meanwhile, last year Vocus Communications brought the Australia Singapore cable online — adding another 40 terabits per second into the mix (although it now boasts 60Tbps).
All of a sudden, the opportunities for more data flow between Perth and Asia is now evident, as are the opportunities for companies with Asian ambitions.
It’s part of the reason why Perth has been talked about in some quarters as an emerging FinTech hub, for example.
Companies who wish to serve customers in Asia, in the new economy, would be well-served to host their data in Perth where it can travel on the new subsea cables to end customers.
That’s not even to talk about the potentially transformative effect of 5G technology will have on companies in Australia.
As 5G rolls out over the next couple of years (not to mention the NBN), companies will need to start storing and generating a lot more data, so the market proposition for data centres is even more robust.
Simply put, 5G will create a demand for data and data storage not yet seen in Australia, and the number of data-heavy applications such as IoT that will be unleashed will be mind-boggling — and all that data needs a home.
According to a working paper released in 2018 by the Australian Department of Communications, 5G will offer a 10-fold download capability and a 50 times reduction in latency.
Private companies, or government departments for that matter, simply aren’t in a position to host the data centres needed for the next generation of data applications.
That’s where providers like DC Alliance come in.
But in selecting Perth as the base of our next data centre, we not only looked at market demand for data storage — we also looked at cost.
Why Perth is a great place to build
Our new data centre will cost some $25 million, and if we chose to build the centre in Sydney or Melbourne, it would cost a lot more.
According to industry publication Data Economy, market participants are increasingly looking at so-called ‘second-tier’ cities such as Perth as they find themselves priced out of the Sydney and Melbourne markets.
It wrote earlier this year that these cities were becoming increasingly popular for companies looking at data storage in Australia.
“As the two cities grow, and especially Sydney, CAPEX and OPEX costs are seemingly also driving investors to look at other options,” it wrote.
“Perth, in Western Australia has benefited from this shift and is now seen as an emerging market for data centre services.”
It also cited IBISWorld estimates saying that the cost of building a new data centre in Australia is between $50 million and $200 million.
We’re proud to be part of that movement by opening a new data centre in Perth.
At DC Alliance, our mission is to democratise access to data by paving the way forward for a new era of connectivity, doing so at a speed and scale not seen before in Australia.
What’s more, our new centre will cost nowhere near that much, as we’ve already secured a property in Canning Vale for the task, and have locked in an in-principle agreement with telecom TPG to house a Point of Presence (PoP) at the centre. Vocus has also participated in linking up our data centre to their network.
The market opportunity and the unique set of factors hitting at the same time all point to one simple truth. There has never been a better time to provide a more affordable, reliable and better alternative for data centres in Australia.
And in Perth, we have found the solution.