Fonterra Cooperative Group has signed up to the new data centres Microsoft is establishing in New Zealand.

The dairy giant is the first customer of the new centres being built in Auckland by Canberra Data Centres.

The five-year deal is part of a broader partnership which will see Fonterra shift many of its mission-critical functions onto Microsoft's Azure cloud platform.

Piers Shore, Fonterra's chief information officer, said the new arrangements build on the other strategic partnerships the company has with other providers, including EY and SAP, which help it drive productivity and efficiency across the business. Combined, they will "fundamentally reshape" how Fonterra delivers information technology services, he said.


"The cost savings and investment in Fonterra from our strategic partners are a major benefit to Fonterra, but the deep relationships between our organisations are the real win here," Shore said in a statement.

Canberra Data Centres - half owned by Infratil - is a provider to Microsoft and plans to have two data centres operating in Auckland by the end of 2022.

Microsoft said transferring data from Fonterra's on-site data centres to the virtually unlimited Azure platform will vastly increase the amount of data the dairy processor can gather and analyse in real time, using everything from sensors on farm milk vats to smart machines in its factories.

Fonterra is already trialling machine learning to detect improperly sealed or faulty bags of powdered milk in its factories, so all products arrive at stores in perfect condition without wastage.

Chief operating officer Fraser Whineray said Fonterra's strong sustainability focus was an important part of the move to Microsoft's cloud platform.

"By shifting to a technology platform that will enable Fonterra to maximise its efficiency while using renewable resources, we're also building on our sustainability commitments. Microsoft's pledge to use only renewable energy in its data centres aligns with our own long-term goals and provided another benefit to the partnership."

Microsoft NZ managing director Vanessa Sorenson said the faster pace of innovation, greater sustainability and cost savings enabled by cloud technologies are a fraction of the "significant benefits" the country's agrifood sector can gain from digital investment.

"Watch this space. This is the first customer signing of many."