While industry growth is projected to remain strong, data security remains of paramount concern.
Melbourne, Australia (PRWEB) November 11, 2013
The Data Centres industry has incredible growth potential. Still in its infancy, cloud computing is driven by the internet and all things internet-enabled. The adoption of a cloud computing model is used to achieve economies of scale, enhance information sharing speed and develop new services. These new services have assisted data centre growth significantly over the past five years, during which revenue is expected to have increased at an annualised 6.2%. Industry revenue is forecast to total $475.4 million in 2013-14, up 5.0% on the previous year.
Over the next five years, security concerns for the Data Centres industry are expected to remain an important issue. Trust of the third party managing an entity's private data is at the forefront of security concerns. IBISWorld industry analyst Craig Shulman states “not only do data centre users need to be convinced that their data cannot be accessed by the outside world, but also that the cloud operator does not use the information for undesirable purposes.” Depending on the holding location of the data, which could be anywhere around the globe, the regulations governing privacy may be different to what the client understands or expects. One advantage of any online business is that the product or service on offer has a global reach. A data centre operator is simply taking all their server rooms, cooling facilities, physical software goods and their updates, and making them available to anyone over an internet connection. Growth in the industry will therefore influence other companies, like those in computer equipment sales, or internet service providers needing to supply adequate bandwidth for data centre users. According to Shulman, “cost concerns for the industry will also remain relevant, as electricity transmission, distribution costs and the cost of water continue to rise, placing a greater utility burden on the industry.” However, the opportunity to develop data centres in regional areas when the National Broadband Network (NBN) arrives may provide respite for some firms as lower property costs negate the rise in utility costs.
As far as the breakdown of revenue generated from industry operations by the major players, established hybrid technology hardware service providers are still making the largest contributions. Major industry players, IBM and Fujitsu, are the long-standing major market shareholders. However, the potential market size is too big to assume that these markets shares will remain static. Nonetheless, concentration currently remains at a moderate level, at least until the companies have an established market. Industry competition remains strong and as more work is taken offshore and larger players continue to buy smaller players struggling to compete, and international players invest in establishing operations in Australia, market share concentration will oscillate over the coming five years. For more information, visit IBISWorld’s Data Centres report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry is mainly engaged in providing electronic information storage and retrieval services (except library services). While web hosting provides access to information stored on the internet, electronic information storage is the act of storing this information.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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