BRW showcases planned $30m cloud data centre

Scott Hicks- YourDCAdelaide entrepreneurs Scott Hicks and Greg Siegele will build a cloud data centre, secure enough to meet Department of Defence standards, at a former car exhaust factory in the north of the city.

Hicks and Siegele are the major shareholders in start-up YourDC, which has just purchased the abandoned Tenneco Walker exhaust factory at Edinburgh Parks, a 6000 square metre facility sitting on a 25,000 sqm site about 25 kilometres north of Adelaide’s CBD.

YourDC’s investors – which in addition to Hicks and Siegele also include private investors from Adelaide, Switzerland, Darwin and Perth – expect to have spent $14 million by the time the data centre is ready for its first tenants in December.

“We hope the data centre will be a big enabler for Northern Adelaide, which has had a hard run over the last 12 months with General Motors Holden and a lot of manufacturing going,” Hicks says.

“There’s some amazing sites out there, and anybody wanting to move a business into Adelaide will want to have access to infrastructure like ours.”

Work has already begun to repurpose the factory as a cloud data centre meeting the Uptime Institute’s coveted ‘Tier 3’ rating.

“It means you’ve got a replication of every potential point of failure,” says Hicks.

“So we’ll be drawing power from two substations, multiple UPSs [uninterrupted power supplies] that maintain power in the event of an outage, and multiple generators that start 15 seconds after an outage with five days’ worth of diesel on site to keep them running. We’re looking at a 1.5 megawatt solar array on the roof too.”

Razor wire and guards will complement biometric hand scanners, pin codes and keys as security around the 1000 server racks YourDC eventually intends to house at the site, which by that stage will have cost $30 million to build. The founders also stress it is 50 kilometres away from South Australia’s earthquake faultlines and above the one-in-100 year flood line.

Hicks has calculated that YourDC becomes cashflow-positive upon renting space for 100 server racks, yet his due diligence has revealed demand for 300-400 racks’ worth in the next 12 months from local companies alone.

“There’s nowhere else to go in SA because the only other Tier 3 centre – Adam Internet’s, which I helped build – is at 90 per cent capacity and we’re not picking up any plans from the major players to increase capacity here.”

Data centre clients prefer to be able to reach their equipment within a short drive, Hicks says, while SA-based clients using the centre for network storage or low latency requirements could never consider racks in Sydney or Melbourne.

“From Adelaide they’re a 32 millisecond return trip, where a lot of that equipment requires a 3-4 millisecond response time.”

The data centre will be built in four stages over the next two years, assuming steady demand, with the first spaces available from December.

“We’re adding the mechanicals in a compact way that means we can grow with demand and not spend a ridiculous amount upfront,” Hicks says.

The SA Government is a likely client for some of the space, says Hicks, who also points out the centre is being built to Department of Defence specifications. A Royal Australian Airforce base will be a neighbour of YourDC.

“We’re also talking to the big managed services providers, who are finally rolling out cloud platforms and wanting them replicated at two facilities within SA,” Hicks says.

YourDC’s current headcount of 10 is planned to double over the next year, with another 70-80 jobs created during the build phase, Hicks estimates.

Some non-mechanical components of the build will be handled by Astelec, the telco construction company building a majority of the National Broadband Network in South Australia. Hicks is a passive 50 per cent shareholder in Astelec.

Hicks ran Adam Internet, the Adelaide-based ISP founded and owned by his father Greg, from 2004 to 2012. He reportedly disagreed with his father about selling the business, and left it in 2012, not benefiting financially from its $60 million sale to iiNet the following year.

Greg Siegele, who sold his video gaming company Ratbag to Midway Games in 2015, says he initially looked at YourDC as an investment, but loved the business plan so much he decided he wanted to become more involved at the operational level.

“Not only is there huge demand, I have enormous confidence in Scott, who has spent his working life building and managing one of the State’s most successful Internet Service Providers,” Siegel says.

Hicks is CEO and Siegele an executive director of YourDC.

*This story has been corrected to clarify Scott Hicks’ title at Adam Internet and the fact he did not benefit financially from its sale.

Original article can be found on the BRW site by clicking here.