Microsoft: Australian datacentre not financially viable

No Australian Azure servers

It’s official, Microsoft will not be building an Australian data centre. During a Cloud round table, Microsoft explained that it is not financially viable to build and run datacentres in Australia. A very long internal spread sheet is used to calculate the economics of where and when to build datacentres across the globe.

Temperature, Power Costs, Latency, Stable governments, Geography, Natural disasters are all taken into consideration when selecting the perfect site. Australia is also burdened with the 20 Million problem. Large datacentres only really make sense when used on a large scale. Unfortunately Australia’s volume of use wouldn’t match up to the cost model Microsoft want to charge for cloud services.

Despite being available in 41 countries, Azure deployments can only be published to the US, Europe or Asia. The closest being Southeast Asia, which Microsoft assures use that latency back and forward to, isn’t a problem.

Things are constantly evolving in this space. Take the new datacentre in Dublin, which can now run servers around room temperature meaning the water and cooling requirements are significantly reduced.

Some Enterprise customer needs are serviced in Australia by Microsoft partnering with providers of smaller datacentres like Fujitsu or Telstra for services like Office 365.

Interestingly Amazon have announced they are going to build an Australian datacentre. Clearly their infrastructure scale and cost models are different than that of Microsoft’s, in reality, the end consumer sees Amazon able to make it work, when Microsoft can not.

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Jason Cartwright
Jason Cartwright
Creator of techAU, Jason has spent the dozen+ years covering technology in Australia and around the world. Bringing a background in multimedia and passion for technology to the job, Cartwright delivers detailed product reviews, event coverage and industry news on a daily basis. Disclaimer: Tesla Shareholder from 20/01/2021

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