NextDC's Australian strategy to keep Sydney last

Keeping Sydney as one of the last major Australian cities for datacentre provider NextDC to launch in was deliberate, according to founder Bevan Slattery.

NextDC founder and outgoing non-executive director and deputy chairman Bevan Slattery has said that his strategy to beat global datacentre provider Equinix in Australia was to leave building a Sydney datacentre to last.

Speaking at the Communications Day Wholesale and Datacentre Summit in Sydney on Wednesday morning, Slattery said that when the company began in May 2010, he realised that launching outside of Sydney first was a better strategy to "out-Equinix Equinix" in Australia by offering datacentre services in places where they weren't as common, such as Brisbane and Melbourne.

"With NextDC, the decision we made was I was going to do Brisbane and Melbourne. I was going to do Sydney for a while, but the thing I realised was if I was going to do national footprint, I could get crowded out," he said.

"You need to have a footprint advantage where you can take one customer from one location and service them in another. The focus of NextDC was to out-Equinix Equinix."

He said that once customers were signed up in other locations across Melbourne, Canberra, Perth, and Brisbane, he could then bring them into the Sydney S1 datacentre, located in Macquarie Park, which is due to open in September.

"The strategy really was: They're not in Brisbane, they're not in Melbourne, they're not in Perth, so really what I wanted to do was to sign up [customers] in Brisbane or Melbourne and then take them to Sydney," he said.

"That's why Sydney was done last, because we needed to build up the customer base and ecosystem."

He said that over the next five years, datacentre players will struggle if they are only located in one place.

"Having one datacentre in one location in one city, it might be good for a niche player, but if you're going to be a serious player with a national footprint, you're going to struggle," he said.

He said that datacentre providers will need to go well beyond just providing floorspace.

"You need to create value beyond the floor, you need network advantage, you need a footprint advantage, and you need a service advantage," he said.

As global datacentre providers begin to expand into the Asia-Pacific region, he said that Australia needs to assess what its role in this market will be, saying that Australia has slipped down the list of preferred hosting countries in the last few years. He highlighted the government's proposed internet filtering proposal as a reason why datacentre providers were turned off building in Australia.

Slattery is due to step down from his role in NextDC at the company's annual general meeting later this year, and will turn his focus onto his subsea cable business SubPartners , as well as Megaport, and Asia Pacific Data Centre Group.