Increasing Internet Usage Drives Construction of Multi-Million Dollar Data Center/Server Farm Buildings

The rise of internet use has fueled the multi-million dollar development of new data centers or server farms on the north-west outskirts of Auckland for giants Microsoft and DCI Data Centers.

The two northwest projects are in Westgate, where
one alone is worth around $100 million and two others are worth more than $600 million.

The first two new buildings are located on Kakano Rd off Gunton Dr, Westgate.

In January, the Herald reported DCI Data Centers planned to spend $600 million on two new facilities, one in Westgate and the other in Albany.

The pandemic has accelerated the rise of cloud computing, or the use of software and services over the Internet, from Zoom and Slack to Netflix and multiplayer games.

In February, the Herald reported how Auckland’s multi-billion dollar data center boom continued to grow with Amazon saying it will launch a new AWS (Amazon Web Services) local zone in Auckland, with Netflix and potentially TVNZ and Spark as anchor customers.

Hawkins won the prime contract to build Microsoft’s first new project worth more than $100 million.

That building is the most advanced of the three, its superstructure is up and a tower crane is on that site that has a precast concrete facility on the street frontage.

Naylor Love won the second contract to build the new DCI Data Centers project nearby, but that building is less advanced.

None of the builders wanted to discuss the projects, citing client confidentiality.

A construction manager revealed that a confidentiality agreement had been signed and that meant there were no media talks about the project.

It has also been reported that DCI Data Centers is building a second center in Auckland for around $600 million, this time in Albany.

Data centers like to keep their centers private for a number of reasons. Data centers are famous for the amount of electricity they consume, mostly through air conditioning to cool servers.

But in the US, Microsoft has focused on solar power and other clean energy solutions and the company has set a goal of becoming carbon neutral by 2030.

The two new Westgate data buildings are on the opposite side of Kakano Rd from the new Costco fuel depot where since last Tuesday 26 navigators started dispensing petrol and diesel for around 20c to 30c below prices elsewhere.

Costco’s temporary membership office is on the same side of the street as their new gas station. Staff from Australia have also been working in that office in recent days after they arrived here last Monday for Tuesday’s fuel station opening event.

The Herald reported last year that Microsoft had bought a piece of land for more than 100 million dollars.

Microsoft’s land purchase was acclaimed in 2020 by Prime Minister Jacinda Ardern.

“It tells the world that New Zealand is open for quality business and investment. Microsoft wouldn’t be investing here if it didn’t have full confidence in New Zealand’s economy and see us as a safe place to operate in both health and business sense,” Ardern said in May 2020 just after the pandemic broke out here.

Microsoft has about 100 data centers around the world, but has never had one here, so the choice of site is significant.

Last year, Microsoft NZ CEO Vanessa Sorenson told the Herald that the company would build three data centers at different locations in Auckland to create what it calls a data center region.

Last June, the Herald reported The DCI Data Centers project is part of a sudden boom in this type of building.

They were clustered around northwest Auckland.

Malcolm Roe, chief executive of DCI, said the Westgate project will be just the beginning of his company’s push into New Zealand.

“This site is the first step for us in New Zealand and we are currently finalizing a selection of additional sites to meet strong demand,” Roe said last June.

“Increasing use of the cloud in New Zealand is driving demand for a number of high-capacity, environmentally friendly data centers and other related infrastructure within the country. We are pleased to play a key role in the development of this vital part of the digital economy. His company targets corporate and government clients.”

He anticipated that two or three more data centers would be built on this side of the Tasman.

Phase 1 of the Westgate construction was budgeted at $70 million. More stages would be added in what would become a 10-megawatt facility (supermassive or “hyperscale” data centers are usually described by the power load on their IT systems), the Herald reported last year.

Roe wouldn’t put a price on the total build at Westgate, but server farms typically cost hundreds of millions.

The CEO said New Zealand appealed because more than 80 per cent of our power comes from hydroelectric sources. His company would look at options to be greener by “closing that 20 percent gap,” but they wouldn’t include solar panels, because it would take 15 hectares of solar panels to power a 10 mw server farm.

In the Microsoft deal, the Overseas Investment Office approved the purchase of land from Southland Station owner and developer, NZ Retail Property Group, Mark Gunton.

Having Costco, Microsoft and DCI means that Gunton has secured three of the world’s top corporations on his site, which also has the largest Bunnings in New Zealand, as well as the largest Pak’nSave.