Report

The New Zealand data center rack market reached a volume of over 20,000 in the previous year, and it is further projected to register a CAGR of 10.6% during the forecast period. The increasing demand for cloud computing among SMEs, government regulations for local data security, and growing investment by domestic players are some of the major factors driving the demand for data centers in the country/region.

Key Highlights
-Under Construction IT Load Capacity: The upcoming IT load capacity of the New Zealand data center market is expected to reach 350 MW by 2029.
-Under Construction Raised Floor Space: The country's construction of raised floor area is expected to increase to 800K sq. ft by 2029.
-Planned Racks: The country's total number of racks to be installed is expected to reach 35K units by 2029. Auckland is expected to house the maximum number of racks by 2029.
-Planned Submarine Cables: There are close to 8 submarine cable systems connecting New Zealand, and many are under construction. One such submarine cable that is estimated to start service in 2025 is Hawaiki Nui, which stretches over 25,000 Kilometers with landing points from Christchurch, New Zealand; Dunedin, New Zealand land; and Invercargill, New Zealand.


New Zealand Data Center Rack Market Trends

IT & Telecommunication holds the major share.


- The cloud sector is expected to exhibit the fastest growth rate of 20%. The IT load capacity of the cloud sector is expected to reach nearly 30 MW by 2029 owing to the increasing initiatives on digital transformation and other initiatives, which is one of the major backbones of the country's economy.
- The market witnessed increasing investments from large corporations. The hyperscale operator Microsoft, announced the opening of cloud regions in 2022. AWS announced the AWS Asia-Pacific (Auckland) Cloud Region, which is expected to go live in 2024.
- The move to the public cloud is shaking the historical IT shackles and ensuring some difficult conversations are being had about how and when to make this move. The growing familiarity with and knowledge of cloud environments, along with a greater awareness of the opportunity to operate mixed environments, is giving organizations more options when making decisions about workload locations. Around 74% of New Zealand organizations believe that they maintain a very high level of maturity in managing cloud and infrastructure environments. This was a 10-point rise over 2020, indicating organizations have greater experience with managing modern, cloud-based infrastructure. There is also a growing understanding of where and why certain applications should be housed and managed.
- Telecommunications methods have changed over the years, and New Zealanders need reliable telecommunications services for many aspects of their daily lives. The proportion of active internet users has increased overall in line with global trends, supporting the country's ongoing digital transition. The Ultra-Fast Broadband Initiative was a New Zealand government program to build a fiber optic network that was to cover 87% of the population by the end of 2022. It is a public-private partnership between the government and four companies, with a total government investment of NZD 1.7 billion USD 1019149813.
- The broadband market is currently experiencing slow growth, driven primarily by new building construction in greenfield developments or urban renewals. The UFB government project reached over 1.7 million facilities and connected 63% of them or 1.1 million facilities. Fixed broadband subscribers are expected to increase due to an increase in households and a decrease in the number of underserved facilities that were previously unconnected. This drives the adoption of data centers in the telecom industry in the country.


Full Rack is Expected to Grow Significantly


- In New Zealand, due to growing space scarcity between various companies, the full rack has a majority of the market share. In order to cope with increasing rack capacity due to the rapid growth of mobile broadband, e-commerce, and the increase in Big Data Analytics combined with cloud computing, it is necessary to build a fully rack-equipped data center.
- For instance, E-commerce activities have continued to increase in popularity in New Zealand. As of January 2021, about 88% of people in New Zealand aged between 16 and 64 years searched for a product or service to buy online. The share of online shoppers in the country is forecast to surge to 83% by 2026.
- At first, there was a limited focus on rack space in data centers; only size and cost were taken into account during deployment. Nevertheless, there is an opportunity for increased use of rack space in the data center as more and more users from different sectors, such as online banking, telecommunications, media and entertainment, and others, are adopting applications with higher density.
- Companies increasingly rely on data centers for efficient management of their databases and storage, as they generate significant amounts of data every day. The main driving factor for data center rack usage is, therefore, the increased deployment of fully configured data centers. Also, the growth of the market is being influenced by the growing demand for IT services and investments made by large companies.
- The development of hyperscale data centers (mostly preferred full rack units) is increasing in New Zealand. For instance, in August 2022, the CDC Data Centre (CDC) opened two data centers in Auckland, which were considered to be the country's largest and most secure, as well as New Zealand's first hyperscale data center facilities.


New Zealand Data Center Rack Industry Overview

The upcoming DC construction projects in the country will increase the demand for Data Center Racks in the coming years. The New Zealand Data Center Rack Market is moderately consolidated with a few major players, such as Eaton Corporation, Black Box Corporation, Schneider Electric SE, and Vertiv Group Corp., in the market. These major players, with a prominent market share, focus on expanding their regional customer base.

In May 2023, NextDC planned for new data center developments in New Zealand, Malaysia, and Japan. The company has named its planned New Zealand data center as AK1, situated in central Auckland.

In October 2022, Eaton announced the release of its new Open Compute Project (OCP) open rack v3 (ORV3) compatible solutions. It was purpose-built and preconfigured, focusing on the efficient, scalable delivery of critical power for their data center facilities seeking to deploy ORV3 racks. The rack featured extra-wide and extra-deep cabinets; the open rack enclosure supports hybrid mounting equipment and two locking-colocation compartments.

Additional Benefits:

- The market estimate (ME) sheet in Excel format
- 3 months of analyst support