While data centres and Cloud computing are not new kinds of technology, they did generate plenty of stories during 2011 as operators began to turn fresh ground for new data centre sites while been faced with the Gillard Government’s incoming carbon tax.
Cloud has made the headlines as more Australian companies decide to outsource data and cut costs by putting services such as email into the Cloud.
Out of all the local data centre operators, Melbourne-based NextDC (ASX: NXT) seemed to be constantly in the headlines as they announced plans for sites in Sydney (S1), Brisbane (B1), Canberra and Perth.
Equinix was also turning sod on sites in Sydney while mulling a data centre in Melbourne in response to customer demand.
Even vendors who are more known for security offerings were getting in on the action. Russian anti-virus company, Kaspersky, which currently has two co-located data centres in Sydney, was planning to build a purpose-built independent data centre in either Victoria or Western Australia.
However, the carbon tax, which comes into effect on 1 July, 2012, was a slight downer for many data centre operators as they realised they would need to pass on some increases in energy costs associated with the tax to customers.
NextDC chief executive, Bevan Slattery, predicted that it may be incurring costs of "2.7 cents per kilo watt" at its Melbourne facility while representatives from ASG Group and Vocus confirmed they would be forced to raise prices for customers.
However, at least one vendor was seeing a positive side of the carbon tax with Hitachi Data System’s chief technology officer, Adrian De Luca, saying the IT industry should be undertaking initiatives to bring down CO2 emissions.
De Luca cited global research by the vendor's Japanese parent company, which found the technology sector was responsible for 7 per cent of electricity consumed and data centre emissions can generate up to 19 per cent of the world’s atmospheric CO2.
One bright spot on the horizon is that data centre operators could have an even more profitable year in 2012, according to new information from IDC Australia. The analyst firm predicted that $8 billion worth of additional data centre facilities will be needed if Australia is going to have a sustainable IT economy in the future.
Turning to Cloud services, Freshfields Bruckhaus Deringer law firm raised the issue of data sovereignty in January when it issued a report together with Macquarie Telecom that found data stored offshore remained subject to the laws of the country the data is stored in, requiring local customers to submit to a US court in the event of litigation.
That didn’t stop service providers taking advantage of the trend to host data in the Cloud overseas, such as fibre wholesaler Vocus (ASX:VOC). The company moved to position itself as a key capacity provider for US companies this year by selling Cloud services to Australian customers via South East Asia. In November, it established a point of presence (PoP) at the Equinix data centre in Singapore.
Even the Gillard Government got on the Cloud bandwagon with federal innovation minister, Kim Carr, announcing that Australia has the opportunity to develop a strong local capability in Cloud computing, following the launch of a report drafted by the IT industry innovation council.
“We are a safe, secure destination for hosting Cloud data applications, and offer political stability, and a stable and transparent regulatory environment,” Carr said at that time.
His comments were backed up by a Frost & Sullivan report released in December which found that Cloud adoption in Australia was amongst the highest in the world and software-as-a-service (SaaS) was the most popular service model, used by 72 per cent of Cloud computing users.
It’s clear that with vendor and government support, data centres and Cloud services will continue to be popular with Australian companies in 2012. Although, it remains to be seen what affects the carbon tax will have in June. Watch this space.
Do you think the Australian data centre and Cloud expansion ranks as one of the biggest stories of the year? Comment below on how high you’d rank the story and what else should be include in the top 10.