NextDC eyes Asian expansion

Australia’s largest data centre operator NextDC is eyeing expansion into Asia as its vision of a neutral national data centre network nears reality.

This month NextDC will open its P1 Perth data centre — its fifth since its first B1 Brisbane data centre went live in October 2011.

The company, which was launched by one of Australia’s most successful IT entrepreneurs, Bevan Slattery, now operates data centers in Canberra, Sydney, Melbourne and Brisbane and has more than 100 channel partners.

Slattery left the company in July last year to found Megaport, which is investing $62 million in the Singaporean market over the next three years.

NextDC chief executive Craig Scroggie told ARN the opening of the the P1 data centre marked a crucial point in the development of the company, which now has a market capitalization of almost $450 million.

“It’s a pretty important milestone for the company because it’s the first time we have really had a national network of data centers,” he said.

“We knew a single price and single SLA to industry, as well as carrier and vendor neutrality in the Cloud were pretty important.”

But when Perth opens in late February, the data centre-as-a-service model, for the first time will be a national model.”

In a boost to its channel credentials, the company also signed a national agreement with Dimension Data in July last year, which allowed the system integrator’s customers access to data center space around Australia.

Scroggie said the second priority for this year was to build continued strength in the channel.

“Predominantly we are a channel led organization where big telcos can sell data centre-as-a-product with their networks or their Cloud computing solutions.

“And we have the system integrators who have some data centre footprint, who are looking for one company to work closely with.

He said the channel was a really important priority.

“We have more than 100 channel partners who use our data centers and combine it with something they sell.

“We are focused on aligning the data center industry with the Cloud industry, that’s why our channel relationships are so important.”

Scroggie said he was building an ecosystem, which is what customers are buying today.

“They are looking at the data as a service model and we are seeing an emergence of networking-as-a-service,” he said.

“The era of hybrid Cloud is well and truly upon us and the days of customers buying hardware, network switches and storage… those days are over.

“Organizations will still buy the same infrastructure but they are going to leverage Cloud providers like we have never seen it before. “The number one outcome is that customers will pay only for what they use.”

Gartner analyst Geoff Johnson said NextDC occupied a sweet spot in the market.

“The recent numbers have been pretty spectacular off a pretty low base and they are looking at double digit growth in the next couple of years,” he said.

“Everybody has a Cloud story and the reason they will prosper is because they perform a valuable role acting as an independent data centre provider.”

He said it was their approach to data diversity had made them attractive to channel players, but indicated they would be cautious in face of expansion.

“That’s why they are attractive to a Telstra or a Di Data or any of the channel partners,” he said. “I would imagine they would be planning an Asia Pacific expansion, but I also think they would be wanting to bed down their Australian operations.

“With data centers you have to be spot on.”

The company is also riding high on the back of national deals with NEC and Telstra, which has led to murmerings of possible expansion in the Northern Territory and South Australia where NEC is known to be particularly active.

But despite demand for regional facilities, Scroggie said there were no announcements to make at this stage.

“We have still got some growth capacity in our big five mega facilities and we are looking at opportunities domestically.”

However, he said the company would continue to look very closely at expansion in the Asia Pacific.

“There is no question Asia is a very attractive market and many companies are looking to the Asian region for growth,” he said.

“We have a lot of customers that would like us to be operating in Asia and providing the data-centre-as-a-service model.

“We are looking internationally, but there are big costs and each market in Asia has new legislative hurdles.

“Each market is a $100 million plus investment.

“We will continue to review the opportunities to expand in the international market, but at this stage we haven’t made any announcements.”