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According to Arizton’s latest research report, the Australia data center market will reach USD 9.6 billion by 2027. In 2021 Sydney and Melbourne received 70% of the total Australian data center investment. New data central investors such as Stockland and Trifalga have invested in the Sydney data centers. Sydney is an important data center market in Australia, driven by factors such as growth in digitizationconnectivity options and 5G deployment.

The Melbourne data center market witnessed investment from new entrant STACK Infrastructure for the development of a data center facility. Microsoft also invested in the development of its data center, MEL5, in Melbourne.

Australia has the presence of several colocation operators. Significant revenue comes from retail colocation, while wholesale colocation is steadily growing due to increasing interest from cloud service providers.

In 2021, the Ministry of Finance in the country started using it digital data management services under its Digital Records Transformation Initiative as per the government’s three-year initiative for modernization of the public sector in the country. The country has great potential in terms of renewable energy sources, supported by government measures and operator initiatives. For example, the government of Australia has launched its renewable energy strategy, aiming to generate approximately 100% electricity from renewable energy sources by 2030. Operators such as NEXTDC and Equinix have also strived to become carbon neutral by using renewable energy.

According to the report, the Australian data center market is among the top markets in APAC and is expected to grow by ~45% between 2022 and 2027. The average colocation capacity utilization rate is over 75%, with market colocation demand driven by the cloud and IT sectors, followed by government and BFSI companies.

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Cities like Sydney and Melbourne will witness more hyperscale developments, while other cities like Perth, Brisbane and Adelaide are expected to see more edge data center deployments. The Government of Australia is supporting data center growth with initiatives such as the “Industrial Land Strategy” for industrial land development and aims to increase the share of renewable energy in total power generated by 50% by 2025.

The growth potential of the market has attracted several new entrants such as GreenSquareDC, STACK Infrastructure, Stockland, Supernode, Trifalga and Vantage Data Centers. Demand for edge data centers has also grown significantly, with edge operators such as Edge Centers and Connected Farms announcing the deployment of edge data centers in the country. The market is also expected to see growth in self-built facilities by cloud service providers in the coming years.

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