An industry survey has shown the top drivers for increased data centre investment are extra capacity and technological upgrades to keep pace with AI led demand, with 80 per cent report delays to manufacturing or delivery of critical equipment as industry capacity struggles to keep up with demand.
The annual Data Centre Cost Index [link] from global professional services company, Turner & Townsend, analyses the current average cost per watt to build data centres in 50 global markets, and uses survey responses from 250 sector leaders to pinpoint trends across the data centre industry.
The top of the cost index shows how costs are being impacted by constraints in high-performing markets, where demand is exceeding available power, the supply of skills and materials. Tokyo, at US$14.3 per watt, is the most expensive market for the second year in a row – with labour shortages and new limits to working overtime continuing to put strain on delivery. Meanwhile, Singapore is now the world’s most power-constrained data centre market and has risen into 2nd place in the rankings, at $US13.8 per watt, from 5th position last year.
These are followed by longstanding hotspots including Zurich (US$13.3 per watt), Silicon Valley (US$12.8 per watt), and New Jersey (US$12.4 per watt) – which appear consistently in the top five of the index. These mature markets known for industrial innovation and technology can be expected to see further growth as the AI and machine learning revolution continues.
Simon Kearney, Director, Data Centre Cost Index Lead, Australia and New Zealand, at Turner & Townsend, said the data centre industry in Australia and New Zealand “continues to enjoy exceptional growth, despite the economic headwinds and resource challenges the industry is facing globally”.
“Sydney is traditionally seen as the powerhouse of Australia’s data centre market in terms of investment. Melbourne, however, has seen remarkable growth due to the persistent expansion of hyperscale tenants and significant investments by key players in the industry. Forecasts suggest the built-out capacity will increase by over 70 percent in the next two to three years.
“New Zealand continues to see steady growth. Demand is consistently outstripping the capability of supply chains and the region’s ability to deliver. Skilled labour shortages and immigration to Australia are causing notable increases in cost inflation on data centre projects above 20 percent.
“Technological advancements through AI and machine learning have seen rapid advances in power and cooling technologies. As data centre operators seek practical solutions to improve efficiency, reduce their impact on the environment, and minimise energy consumption, priorities will shift to renewable power sources and the advancement of liquid cooling to support high IT density.
“Governments globally are realising the importance data centres play in today’s society. Microsoft is partnering with Australia’s Technical and Further Education New South Wales (TAFE NSW) to establish a data centre academy that will also extend its global skills programmes to help more than 300,000 Australians gain the capabilities they need to thrive in a cloud and AI-enabled economy.”