Microsoft’s move to set up its first data centre region in New Zealand looks set to give the country’s digital economy a tickle, if new analysis by GlobalData is anything to go by.
The industry data and analytics firm reckons that the recent announcement by Microsoft around its plans to build a regional data centre underpins the country’s emerging digital potential.
Specifically, the addition of the new data centre infrastructure is likely to offer a boost to New Zealand’s digital economy, according to GlobalData technology analyst Saurabh Daga, with the move an important step for businesses and government sectors, which require high performance and data sovereignty.
“Once completed, Microsoft’s datacenter project in New Zealand will be the first major local datacenter operator from an international player, since IBM opened its datacenter in Auckland’s East Tamaki back in 2013,” Daga said.
“While that may be of concern to the incumbents, the benefits of multimillion investments prove to be a major boost to the country’s digital economy,” he added.
According to Daga, Microsoft’s data centre investment in New Zealand comes against the backdrop of fast-paced digital transformation efforts currently being seen, not just in the country, but across the globe as the pandemic compels enterprises to make the rapid transition to cloud with operations now spread out and run from remote locations.
Through this prism, GobalData suggests that Microsoft’s planned data centre presence will work to accelerate digital transformation in the country by enabling its public and private sector entities, large enterprises and even small and medium businesses to access enterprise-grade cloud services.
With the likes of Azure, Microsoft 365, Dynamics 365 and Power Platform on offer from a local Microsoft cloud presence, organisations that have previously not been able to meet their data hosting, security and compliance requirements due to sovereignty issues, among other limiting factors, will now be able to plough ahead with their cloud ambitions.
“By enabling seamless access to enterprise-grade public cloud services the proposed data center investment by Microsoft will empower business enterprises and other organisations in the country to build their digital capabilities and most importantly ensure that their critical and sensitive data is stored locally,” Daga said.
Microsoft’s foray into New Zealand’s data centre landscape — which comes with an investment price tag of $80-100 million, according to GlobalData — is also expected to increase competition in the local market.
Until now, the analytics firm suggests, the local data centre market has been largely led by domestic datacenter operators, such as Datacom, for example, which invested about $52 million in upgrading its four data centres last year.
Microsoft revealed in early May plans to establish its first datacentre region in New Zealand, in what it described as "a major milestone toward delivering enterprise-grade cloud services in the country".
It later emerged that Microsoft's Australian cloud hosting provider, Canberra Data Centres (CDC), which is 48 per cent owned by NZX-listed Infratil, registered a New Zealand subsidiary in February.
CDC hosts Microsoft's Azure Australia Central cloud regions, but until the new company registration has not had a direct presence in New Zealand.