Why has there been so much growth in data centres?
Data centres have quickly become essential infrastructure in Australia and around the world. To explain data centres and their business model, I’m joined by David Tudehope, Chief Executive Officer from Macquarie Telecom.
How does a data centre work?
Data centres are purpose-built buildings where the cloud lives. It is like a hotel. For corporate customers it makes sense to have computers, storage, and IT systems in a highly reliable location and data centres act as that location.
There’s been a mega-trend of corporates moving IT out of their offices and moving into purpose-built data centres for not only the reliability, but it is more cost effective. The second driver is the wholesale shift towards the cloud, and which has accelerated the last few months with COVID-19, where people are using the cloud more and more.
David discusses the type of customers and the competitive landscape for data centres in Australia.
“The data industry has evolved. We opened the first data centre in Sydney a bit over 20 years ago. The business of running a data centre involves first of all, an excellent engineering operations team to make sure the data centre is always up. Secondly, ensuring you are really tuned into what the customers need because customers are becoming more and more prescriptive of their data, cloud, and cyber security needs.” David Tudehope
If you are interested in hearing more about Macquarie Telecom, Gary Rollo discussed the business with David Tudehope in this video: Macquarie Telecom: the data centre business is a real growth engine
The Montgomery Small Companies Fund own shares in Macquarie Telecom. This video was prepared 15 July with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade Macquarie Telecom you should seek financial advice.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
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