What is the state of the cloud in Australia and how does it compare to other regions? Read all about it.

These words have been matched with actions. One article reports that Australia is expected to invest over 14 billion USD in cloud computing by 2025.

Where governments invest, big tech is quick to follow. Microsoft, Google and others are all planting flags Down Under, eager to enjoy a piece of the cloud-based pie. 

What challenges does cloud computing face in Australia?

Despite this general picture of accelerating adoption, Australia faces challenges. Some are unique, while some are shared with other countries.

A key issue is the country's skills shortage. Cloud computing is constantly evolving. To effectively implement and maintain cloud infrastructures, you need skilled professionals to take care of business. Australia, however, is facing a skills shortage that has been described in some quarters as catastrophic.

Then there's the question of climate. As the climate crisis deepens, Australia is becoming more and more prone to extreme weather. One effect of this is that data centres are vulnerable to disruption.  If a data centre is damaged in a storm or bushfire, it's businesses who will feel the brunt of it.

Last but not least, data centres are unevenly spread across Australia, meaning connections can be slow and unstable. The government is responding to this with a concerted effort to expand infrastructure across the country.

Despite these challenges, the overall picture is one of healthy growth. This is reflected partly in the country's expanding data centre provisions.

Data centre expansion in Australia

The cloud is only as good as its data centres. We've come a long way from on-premise monoliths. We're now talking about hyperscale facilities: huge hangars packed with rows of servers.

These don't come from nowhere and are one of the key reasons why some parts of the world are more cloud-native than others.

Investment in both Australia and New Zealand is accelerating. Amazon Web Services (AWS), for instance, has pledged a further 13.2 billion AUD to Australia's East Coast between 2023 and 2027.

On top of this, Australia is already a regional hub for data centres, with Sydney the third-largest data centre market in the APAC (Asia-Pacific) region and Melbourne the eighth.

This is partly because the overheads are lower in Australia than in neighbouring countries like Singapore, Indonesia and Malaysia.

Meanwhile, green data centres are on the up in Australia, to the point that the Australian government has declared that "the green data centre hub of the future is not in Seattle, Silicon Valley or Singapore. It's right here in Perth, Western Australia."

Take WAi1, a 96-megawatt hyperscale facility built in Perth by homegrown company GreenSquareDC. Designed for AI computing, it will be built from sustainable materials, powered by clean energy, and use far less water than other data centres.

Green solutions of this kind are important at a time when governments and organisations are more and more committed to net-zero targets. Data centres are infamously resource-hungry – and generative AI needs about five times as much power and storage as a standard data centre.

As well as WAi1, there are many green data centres in Western Australia and the Northern Territory. These are prime locations thanks to their direct subsea connections, abundance of renewables and closeness to Asian markets.

The cloud in Australia: short-term and long-term trends

It seems likely that the cloud will continue to grow in Australia – both in line with global trends and thanks to region-specific investments in data centre infrastructure.

However, there's one immediate roadblock – Australia's economy as a whole. This has, in the words of Reuters, slowed to a crawl. The news agency reports:

"Australia's economy grew at a snail's pace in the December [2023] quarter as a punishing squeeze on household incomes brought consumer spending to a standstill, reinforcing market bets that the next move in interest rates will be down."

Whether this will directly impact the cloud market is unclear. But it does suggest that a straight upward line is perhaps not to be counted on – at least not in the immediate future.

That said, demand continues to grow and a combination of government policy and external investment puts Australia in a good position to put the cloud to work.

Whatever happens next, we'll let you know.

At Ascend, we've managed over 400 migrations and counting. Looking for a cloud solutions company to help you make the most of your digital transformation? Get in touch today for a no-obligation consultation.