Being one of the few countries to fight off the COVID-19 pandemic successfully, New Zealand remains an attractive market for datacenter investments in Asia-Pacific, and the recent announcement by Microsoft around its plans to build a regional datacenter underpins the country’s emerging digital potential, says GlobalData, a leading data and analytics company.

By establishing its first hyper-scale facility in New Zealand with an investment of US$50-60m (NZ$80-100m), Microsoft plans to bring its cloud services to the local market. This is important for businesses and government sectors, which require high performance and data sovereignty. Microsoft aims to expand its datacenter footprint to 60 regions.

Saurabh Daga, Technology Analyst at GlobalData, says: “Microsoft’s datacenter investment in New Zealand comes against the backdrop of fast paced digital transformation efforts currently being seen, not just in the country but across the globe as the pandemic compels enterprises to make rapid transition to cloud with operations now spread out and run from remote locations.”

Microsoft’s planned datacenter will also accelerate digital transformation in the country by enabling its public and private sector entities, large enterprises and even small and medium businesses to access enterprise-grade cloud services, including Microsoft Azure, Microsoft 365, Dynamics 365, and Power Platform, and meet their data hosting, security and compliance requirements.

Daga adds: “By enabling seamless access to enterprise-grade public cloud services the proposed data center investment by Microsoft will empower business enterprises and other organizations in the country to build their digital capabilities and most importantly ensure that their critical and sensitive data is stored locally.”

Microsoft’s foray into New Zealand’s datacenter landscape is also expected to increase competition in the market, which until now has been largely led by local datacenter operators. Datacom, for example, had even invested about US$30m (NZ$52m) for upgrading its four datacenters last year.

Daga concludes: “Once completed, Microsoft’s datacenter project in New Zealand will be the first major local datacenter operator from an international player, since IBM opened its datacenter in Auckland’s East Tamaki back in 2013. While that may be of concern to the incumbents, the benefits of multi-million investments prove to be a major boost to the country’s digital economy.”