What is a data centre?

Data centres shape an extraordinary range of activities across government, business and social life. They are critical assets, connected through a regional low-latency network, that organisations rely on to safely store, communicate and transport their data.

Microsoft’s data centre in Redmond, home to Microsoft headquarters

What will a Microsoft data centre mean for New Zealand?

The announcement of Microsoft’s first data centre in New Zealand means access to a hyperscale cloud system which will allow New Zealand business to respond to increasingly hyper-connected device and consumer demand. New Zealand’s largely small and medium business ecosystem will be equipped with more options of flexibility, boosted access to innovation, and reliable fast-tracked support from trusted cloud service providers.

Partnering with technology companies brings clear benefits to economies, as tech enables other businesses who bring various fresh thinking and approaches. Microsoft CEO Satya Nadella has variously explained that an inclusive growth model is the only one that makes sense for a productive and innovative global economy.

Vanessa Sorenson, Managing Director of Microsoft NZ, noted that the  “The Fletcher School’s Digital Evolution Index characterises New Zealand as a ‘standout nation’ demonstrating to the world what the future might look like.

“I’m confident this investment will help accelerate our digital evolution,” she said.

Within New Zealand’s business ecosystem, Microsoft’s leading cloud service provider, Umbrellar will continue to collaborate widely on providing comprehensive, best in breed managed cloud services.

“Microsoft’s decision is a game changer for New Zealand,” former Umbrellar CEO Michael Foley said. “In the new world we’re heading into local access to the amazing array of digital capability that is being democratised in Azure will unleash a new era of innovation in kiwi businesses and society in general.”

A main drawcard of the Microsoft data centre is that it reduces the high costs of businesses operating their own data centres, which consume massive amounts of energy. Another is that it enables businesses to align with rapid growth in data and cloud adoption, as well as new technologies like 5G.

As data demand spikes and data becomes more valuable to owners in the coming years, data centres will become ever-more central to a thriving digital economy. Research firm International Data Corp. estimates the global number of data centres will see a steady rise, having already increased from nearly 9,100 in 2019 from 7,500 in 2018, and an expected jump to over 10,000 by 2022. The tech sector is growing rapidly, and, with it, skilled jobs and economic benefits are being created that in turn drives competitiveness and more varied growth.

Currently, Microsoft Azure has more than 200 physical data centres in 160 locations around the world, more than any other cloud provider, enabling its customers with the flexibility to deploy applications at wide range and scale.

The presence of a Microsoft data centre in New Zealand was at the press briefing welcomed by the New Zealand government. Prime Minister Jacinda Adern commented the development signals to the world that New Zealand is a “safe haven and “open for business and quality investment.” She has “full confidence” in New Zealand’s economy, she said.

Former Digital Services Minister, Kris Faafoi, said the government’s swift action in response to the global Covid-19 pandemic was being recognised worldwide.

“This means job opportunities in the near term for our construction industry and, in the longer term, for our ICT industry and local innovators. This also serves as a signal to the world that New Zealand is open for business and quality investment,” he said.

“Today’s decision by Microsoft means that the government, and New Zealand businesses and people, will be able to access the scale and security of Cloud services offered by a major global provider in ways we haven’t been able to before.”

Microsoft President Brad Smith has also commented on his alignment with New Zealand’s national goals. In a Twitter post yesterday, he said, “Last year, I spent some time in New Zealand and met with Prime Minister Jacinda Ardern. I was so impressed by that country’s digital ambitions. Our new data centre there will only accelerate its digital transformation and help propel all New Zealanders forward.”

The planned build is underway, and while an exact timeframe is yet to be determined, it’s looking likely to be operating by mid to late 2023.

With AWS announcing in September 2021 their plans to open an infrastructure region in New Zealand by 2024, Aotearoa looks set to participate more closely in the most connected worldwide technology network, one that will see it with a secure place in the hyperconnected world of the future.

Discover more:

Boost innovation, connect globally: What Microsoft has planned for NZ’s Azure cloud data region, from its local lead

Microsoft launching its first New Zealand datacentre – what’s to come.