Growth in hyperscale data centres to increase shortage of IT workers

New Zealand's tech worker capacity is set to come under increasing pressure as the number of hyperscale data centres grows, according to Michael Snowden, co-founder of IT firm OneNet.

According to Immigration New Zealand, ICT roles make up over a third (35%) of all professions on the Government's long term skills shortage list. Data from technology industry bodies suggests over 10,000 positions are unfilled in the sector.

Snowden says pandemic-led demand has put the cloud computing market on a rapid, upward trajectory - with a corresponding increase in the need for skilled IT staff.

He says the introduction of hyperscale data centre infrastructure in New Zealand will accelerate a move to the cloud for many large corporates and government agencies, placing further pressure on the constrained labour pool in this sector.

"New Zealand's uptake of cloud computing has been lagging behind many other countries for some time, however industry data shows a significant increase this year, with local spending on public cloud services set to grow by 26% to $2.5 billion," he says.

"The lag in adoption of a cloud-first strategy can be partially attributed to a reticence amongst many organisations around having their data in the hands of a third party, particularly if that provider is governed under a foreign country's legislation."

Snowden says one of the other barriers to more widespread uptake of cloud services has been the significant investment in customised legacy applications made by Kiwi companies - that cant easily be hosted in a cloud environment.

"The arrival of hyperscale data centres is set to change that, helping to send a reassurance message to the market and addressing many of the security and customisation concerns that have previously held back this migration," he says.

Snowden says New Zealand businesses are adapting to the shortage of IT staff by moving to an Infrastructure as a Service model.

"What we know about the retention of skilled IT workers is that they need to be continually challenged on a professional level," he says.

"Often working in-house on a single system does not provide exposure to the latest technologies or a variety of organisations at different stages in their development.

"When businesses struggle to compete for high quality staff they will often look to outsource their infrastructure needs to providers that can attract and retain this resource by offering a more diverse work environment. 

"This marks a fundamental shift in a traditional business model where organisations are moving from hosting their own on-premises hardware to providers which can run it in the cloud on their behalf."

Snowden says his cloud computing firm manages the technology needs of some of the countrys' largest industrial manufacturers and service providers and has seen strong growth across their Australasian customer base since the start of the pandemic.

He says their staff salaries have also increased significantly over the same time period as competition for skilled labour intensifies.

"What we have seen since the pandemic is an accelerated move towards digitisation and also a trend towards the flexibility and scalability of private cloud, which now makes up 80% of our revenue.

"As more organisations move into the cloud it increases demand for technical and support staff - which right now the sector is struggling to accommodate."

Snowden says the country's new green data centres will help to provide a further incentive for organisations to move to the cloud.

Green data centres utilise energy-efficient technologies to reduce their impact on the environment.

CDC Data Centres has established the country's first two hyperscale data centres, each a 14 MW, Tier 3 facility and several times larger than existing data centres in New Zealand. It uses one hundred percent renewable and carboNZero Certified electricity and an innovative closed-loop cooling system which requires almost no water to operate.

Snowden says demand from New Zealand's major corporates, central government and offshore companies for more sustainable data storage facilities is growing rapidly.

He says local investment in the development of hyperscale data facilities has been well timed with post-pandemic demand for cloud computing forecast continuing to rise and the international green data centre market expected to increase by 23% annually, reaching $292bn within four years.

"Globally, there is concern over the growing energy consumption of data centres which are a major driver of carbon emissions for tech companies, and this has seen some countries move to regulate the industry - with the aim of encouraging greater efficiency," says Snowden.

"What we know about the trans-Tasman market is that there is a significant appetite for more sustainable data management services.

"A large proportion of our client base is working towards developing more sustainable business operations, and this is being driven in part by a post-pandemic trend towards environmental consciousness amongst their consumers," he says.

"While Australia is planning significant investment in the development of solar and wind powered data storage facilities, including a $2.5bn supernode centre in Brisbane, New Zealand's access to renewable energy and cooler climate is already helping to create a competitive advantage for us in that market."

Snowden says OneNet will provide their private cloud computing management services, under a co-location model from CDCs Silverdale data centre.

He says they have invested substantially in low-energy server hardware and migrating their customer base to the new facilities.