Microsoft's new data centre, being built by Hawkins at Westgate in northwest Auckland, just up the hill from the new Costco, pictured in May. Photo / Michael Craig
Microsoft's new data centre, being built by Hawkins at Westgate in northwest Auckland, just up the hill from the new Costco, pictured in May. Photo / Michael Craig
Microsoft has revealed another anchor customer for its giant data centre, currently under construction in northwest Auckland: Auckland Transport.
The Auckland Council-controlled organisation is the latest in a slate of signups that includes Fonterra, ASB, BNZ and ACC
While AT is already all-in with Microsoft's Azure cloud platform, general managerbusiness technology Roger Jones says Microsoft's new "region" in Auckland (which will consist of twin data centres) will offer faster performance than apps served from its Singapore and Sydney server farms.
He says that'll mean AT can do more online, and move more apps from on-premise servers and into the cloud.
That will save AT some $2.5 million per year - in the context of his division's annual budget of around $50m.
Jones says some of the savings will come from mothballing AT's own computers and some from efficiencies as Microsoft throws in free training as a sweetener - "Which is a good value for us, and staff, given we're not the highest-paying employer in the world."
The AT GM is also expecting to see more reliability as more apps are moved to the cloud, after what he concedes has been an at-time ropey situation with on-prem software.
The $2.5m saved will not be banked. It's a pittance next to AT's total spending (which came in at just on $2 billion last year and the council as a whole just under $7b) but a meaningful sum for app development.
Jones says the money will go toward new tech projects, including adding more functionality to AT's mobile app as it expands to include retime data for carshare operators, e-scooter rental companies and the like. There's already real-time location data and arrival times AT rides. We should see more in terms of real-time data in AT's app for third-party services, and more third-party services making more use of AT's data. We could see some AI action.
Geography is destiny
Auckland will go from famine to feast over the next 18 months as New Zealand's first-ever wave of so-called "hyperscale" data centres that house more than 5000 servers and use tens of megawatts each.
The pandemic has fuelled a boom in cloud-based services for entertainment (online video streaming and gaming) and work (from Zoom to Slack to almost any app you use these days). In real life, the "cloud" or online services you use have to sit on a server computer in a data centre somewhere - and on the internet, geography is destiny. The less distance data has to travel the less the latency (or lag). And it's no coincidence that northwest Auckland is the location for most of the new hyperscale data centres - for it's close to the two highest capacity internet cables coming into NZ, and on the doorstep of NZ's largest internet peering exchange, in Albany.
Microsoft's new data centre under construction at Westgate in northwest Auckland on August 1, 2022 - pictured from the Costco side. Photo / Cole Slawson
"One of the things we're getting lots of enquiries about is latency – the ability to upload and download data in almost real time, which AT's CCTV networks at stations and intersections rely on," Microsoft's Sorenson says.
"Having a local datacentre region here in Aotearoa means much lower latency than ever, so transport systems can run more smoothly and AT is able to respond faster to security or safety incidents, in partnership with Waka Kotahi and the police."
Microsoft's new data centre under construction at Westgate in northwest Auckland on August 1, 2022 - pictured from the Fred Taylor Drive side. Photo / Cole Slawson
Local hosting also smooths the path for government and corporate customers facing data sovereignty issues.
In May 2020, as she revealed the project, Prime Minister Jacinda Ardern called it a sign of confidence in NZ's economy.
The same month, Microsoft set up a subsidiary called Microsoft 6399 NZ Ltd, 100 per cent owned by Dublin-based Microsoft Ireland Operations Limited. The Auckland data centre is being built on behalf of Microsoft 6399, according to a company filing.
Microsoft has not put a price tag on its twin data centres in northwest Auckland.
But Australian rival DCI, which is due to break ground on its first Auckland data centre this Friday, says its two server farms in the city will cost $600m. (The first will be a 10 megawatt facility, the second a 40MW effort. Hyperscale data centres are described by their peak electricity consumption).
And in May 2020, half Infratil-owned Canberra Data Centres (CDC) announced plans for two hyperscale data centres: a 7000sq m facility in Hobsonville and an 11,000sq m server farm in Silverdale in a $300m-plus project due to complete by the end of this year (according to Infratil's 2022 annual report, released in May).
Across the Tasman, Microsoft and CDC partner closely, with CDC hosting some Azure services. Sorenson wouldn't comment on if there was any overlap on their respective data centre projects in northwest Auckland, citing commercial sensitivity.
Meanwhile, Amazon says it will spend at least $7.5b over 15 years on a "Local Zone" of three giant Amazon Web Service (AWS) data centres that will be built in northwest Auckland. The first is due to open in 2024, with Netflix and possibly Spark and TVNZ as anchor customers.
$7.5b sounds like the sort of sum that tech companies generate by throwing in anticipated benefits for the wider economy, but Amazon says its figure excludes that; it consists of the cost of building at least three data centres and stocking them with hardware, plus operating costs including utilities, and salaries. The tech giant says the project will create 1000 jobs.
AWS is already making hay from its expansion. Last week, it announced an expanded All-of-Government deal with the Crown (which has similar "cloud framework agreements in place with Microsoft and, since February this year, local contender Catalyst).
Rounding things off, Datagrid - backed by rich lister Malcolm Dick and BW Group (the Singapore firm that bought the Dick-backed Hawaiki) has plans for a 60 megawatt, 25,000sq m data centre in Southland - which would take up some of the Manapouri Power Station slack if Rio Tinto does shutter its Bluff smelter.
Dick has taken an option on a site at Makarewa, and says he has plans to scale up to a 100MW facility. For now, though, Datagrid is still on the drawing board.
