Perth data centre operator plots $40 million float to join NextDC on sharemarket

The Australian Securities Exchange could have its second co-location provider as startup Data Exchange Network raises $16 million for an initial public offer.

The company has been established by the team behind Perth-based modular data centre infrastructure manufacturer DX Platforms – and is not their first strategy to go public.

The public listing, which has an indicative schedule launch date of 30 April, would see the company float at a market capitalisation of $40 million, and join the only data centre company on the ASX, NextDC, which now has a market cap of nearly $2 billion.

The team behind Data Exchange Network are chief executive Peter Christie, chief sales officer Dean Coetzee and chief technology officer Tim Desmond.

Australia already has a competitive co-location sector, with NextDC joined by major global operators like Global Switch, Digital Realty and Equinix, which acquired Australian operator Metronode for $1 billion, and new player AirTrunk, which opened its doors in Sydney and Melbourne last year.

Data Exchange Network, which plans to open sites in Port Melbourne and Homebush, Sydney, claims it can compete in the heavily contested co-location market thanks to what it calls a unique approach among co-location – the company designs, engineers and constructs its own modular data centre technology.

"Self-contained data centre modules are far less capital intensive as they allow for repurposing of existing warehouse facilities to create fully integrated Tier-III and Tier-IV compliant colocation sites," according to the company.

The 4600sqm Homebush facility will require initial capex of $4.3 million and will provide 15MW of capacity up to Tier IV. The Melbourne site will be 4000sqm, and will also require initial capex of $4.3 million and offer 15MW of capacity up to Tier IV.

According to Data Exchange Network's IPO presentation, the $16 million capital required to establish its first data centre footprint is a fraction of the $120 million that NextDC spent in its initial capital investment to set up in Melbourne and Sydney in 2012-13.

"Modular designs means we expect our initial two co-location facilities will commence operations by first quarter of 2019," according to the slide deck.

Selling its own modules

The company also has a business line in constructing and selling these data centre modules and associated infrastructure to third-party operators, and claims to offer better prices by eliminating layers of the channel.

"Our fully integrated model allows for reduced customer cost through eliminating OEM agreements, vendors, distributors, subcontractors, consultants and engineers," according to its IPO presentation.

The company's data centre modules require a "substantially smaller" upfront capital investment than typical data centres, according to Data Exchange Network, and are suited to remote locations, such as telecommunications sites, and are self-contained for remote installation.

Its intellectual property includes an autofloor technology that allows for complete lengthways installation of racks, "resulting in more racks per container than any other known system". It also has patent pending high-density rack IP.

Another innovation is a new type of ISO container design allowing a cooling plenum to be built into the structure of the container.