Australian Data Centres Embody Sydney-Melbourne Rivalry

Not only do Australian organisations demand onshore data centres, they frequently demand dual locations — Sydney and Melbourne. IBM is the latest provider to go down that path, but why is it necessary?

Sydney picture from Shutterstock/Melbourne picture from Shutterstock

IBM today announced plans to open two SoftLayer data centres in Australia at a customer and media launch in Victoria. Its Melbourne location will begin operating in three weeks, while a Sydney site will be open by the end of the year. The two centres will each have an initial capacity for 15,000 physical servers, spread across three 5000-server "pods", and can be expanded to as many as 100,000 servers. Both sites will have direct connections to existing SoftLayer centres in Singapore, Hong Kong, Los Angeles and Tokyo.

IBM executives acknowledge that the plan to have two locations down under amongst the 15 that it is opening this year across the globe gives Australia an unusual focus. The only other country where IBM is operating multiple SoftLayer centres is the United States. (IBM acquired SoftLayer last year.)

It's not such an unusual approach in the Australia data centre and cloud market, however. Microsoft is also planning to open dual Azure centres in Melbourne and Sydney later this year. Amazon Web Services has been operating in Sydney since 2012, but launched an edge location for Route 53 and CloudFront in Melbourne in July this year.

One key factor drives that decision: Australia's geography and the need to provide a recovery location that's a reasonable distance away. It's acceptable for Hong Kong to fail over to Singapore and vice versa, but for Australia to fail to one of those locations (or the US) could introduce major latency issues. "When we designed the network, we're trying to be within 20 milliseconds of the vast majority of the population of the world," said SoftLayer CEO Lance Crosby (pictured). "The reason for two independent sites in Australia is to have both active/active and active/passive recovery zones."

A relatively speedy adoption of cloud in Australia is also a contributor. "We're seeing so much growth in this part of the world," said IBM Australia general manager Jeff Rhoda. "We view Australia and New Zealand as a huge, progressive front-leading marketplace for cloud."

"From SoftLayer's perspective, about 5% of our revenues were from Australia prior to us opening a facility, so it's always been a key part of the world for us," Crosby said.

Having a local presence will help attract clients who insist on keeping their data on shore. "Our key differentiator is all our services are available single tenant or multi-tenant. About 60 per cent of our client base is single tenant because of data sovereignty concerns," Crosby said. "It's all about data residency at this point. Our competitors build giant facilities and try to service regions or zones — we knew we'd have to be in every major country in the world. A lot of the business our competitors have is not the mission-critical stuff where regulation matters."

Even on-shore cloud has its limits, however. "Obviously our core technology is going to be difficult to move directly to a true cloud environment," said Peter Bourke, director of information technology for Scentre Group, which operates Westfield shopping centres in Australia. "Services to retailers and shoppers are the areas we see getting true benefit from the cloud."

IBM is also hoping that its partnership with Apple will drive usage of the platform. "IBM is bringing that back end, and Apple will be bringing their normally brilliant front-end interfaces," Rhoda said. "Cloud really is the delivery platform in this case."

And as for that inter-capital rivalry? Everyone remains at pains to stress that neither Melbourne nor Sydney is a "favoured" location. Asked why Melbourne is opening first, Crosby replied: "This one just happened to finish 60 days prior to the Sydney facility. There's no rhyme or reason to which one came first. We knew that we were going to have two locations for disaster recovery, so we knew we were going to be in the two largest cities. It wasn't a fight — it was just a question of which one went live first."

Disclosure: Angus Kidman travelled to Melbourne as a guest of IBM.


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