With indications that the ANZ data center market is set for consolidation, data center providers are actively looking to expand their services range.

That's the view of analyst firm IDC, who claims such expansion is leading to data center providers looking for opportunities to engage with one another and form strategic partnerships.

"The Australian and New Zealand data center market is a mosaic of provider types and service offerings," says Glen Duncan, Research Manager - Infrastructure ANZ, IDC

"In a rapidly evolving industry, there are many ways that data center providers can maintain competitive differentiation.

"Key strategies include investments in technology, mergers and acquisitions, traversing the data center stack, and partnering with other businesses that have complementary capabilities."

Citing recent examples of such activities, Duncan mentions hosting provider Rackspace, itself housed in Digital Realty's Erskine Park data center, extending into cloud-related services as well as iseek in Sydney partnering with Equinix for those clients who require the redundancy of dual sites.

In the IDC report, Demystifying the ANZ Data Center Provider Market, Duncan adds that the overall ANZ data center market is a complex one, with over 70 providers across a range of provider types (Facilities Operator, Hosting Provider, ICT Vendor, Service Provider, Telco Provider) now offering a range of services.

Increasingly the provider types are offering a suite of services, resulting in significant cross-over and direct competition between different provider types.

"Coupled with the increasing scale and reach of multinational corporations and ICT Vendor data centers, smaller and specialist data center providers will need to find alternative avenues for differentiation," he adds. "One opportunity is in energy efficiency.

"IDC sees an increase in demand on the customer side for data centers with a 1.2-1.3 PUE rating, but with many data centers in operation for over 10 years, there is opportunity there to leverage newer technology to drive down the PUE rating. "

Duncan adds that telecommunications providers especially are finding many opportunities for a go-to-market strategy with other providers.

"Collaborations and partnerships between businesses in adjacent areas (and even between competitors) can be a strategy that quickly enables an organisation to develop its capabilities, broaden its portfolio of integrated services and innovate in order to continually develop competitive advantage," he says.