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Why has there been so much growth in data centres?

 

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.

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Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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