Can New Zealand be a global data centre?

Fairfax Media

AN IDEA: New Zealand Trade and Enterprise is floating an idea for New Zealand to become a world datacentre.

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New Zealand Trade and Enterprise is floating an idea for New Zealand to become a world datacentre.

The demand aggregation that would arise from processing data for multiple large overseas organisations might in turn improve the business case for a second transTasman broadband cable, backers of the idea suggest.

With today's communications technology, they say, where data is processed is irrelevant and New Zealand, with all the often-touted advantages of a stable democratic government geographically isolated from world trouble-spots, could be an attractive site for such a datacentre.

Asked whether New Zealand's notorious limitations on international bandwidth would present an obstacle, Graham Matthews, director of NZTE's investment arm Investment New Zealand, suggests a datacentre with some promising potential contracts from overseas might be a factor in justifying a second transTasman cable, though he admits this is a "chicken-and-egg" argument.

An NZTE spokesperson, after consulting Matthews, says the datacentre idea is a "very early-stage proposal" on which some speculative conversations have been conducted. These have involved "various parties" with an international perspective, including Microsoft.

The proposal is similar to one a few years ago, to make New Zealand a data repository for the world. That never got off the ground.

Datacom director Steve Matheson says there are "geopolitical" points in favour of the world datacentre idea, "but I've not seen [NZTE's] proposal, so I couldn't really comment." Clearly the cost and capacity of communication would be against it, he says.

"But who knows, that may be solved soon," referring to the possibility of "a second or multiple" transTasman cable.

The chicken-and-egg, supply-and-demand problem is familiar to "anyone in the datacentre business", he says.

"People look for capacity in the short term and you have to plan in the long term. You inevitably end up taking a punt."

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