Australia’s Backbone for the Cloud Future
I began building my position in NextDC in 2013, right as I was pivoting away from a deep 15-year career in mining technology. At that point, my investment philosophy was shifting toward industry diversification—and my radar was sharply tuned to what I believed would be infrastructure-critical technologies for the coming decades.
One stood out: data centres.
The Macro Insight: Cloud Was Just Beginning
By 2013, it was clear that cloud computing was gaining serious momentum, but it was still early in the enterprise adoption cycle. Large corporations were beginning to shift away from:
- On-premise server rooms
- Microsoft-managed data centres
- Single-vendor lock-ins
At the same time, latency-sensitive applications, security requirements, and regulatory constraints made public cloud adoption more nuanced than people expected. Enterprises wanted flexibility: some workloads on cloud, some on colocation, and some on bare-metal infrastructure.
This hybrid demand created a clear opening. And NextDC was perfectly positioned to meet it.
Why NextDC?
At the time, I saw two real ASX-listed options to gain exposure to the data centre boom:
- Macquarie Telecom
- NextDC
After thorough analysis, NextDC’s model stood out as superior—especially for long-term asymmetric returns.
Here’s why:
- Tier IV certified infrastructure: Best-in-class reliability and uptime.
- Diverse offerings: From top-tier fully managed colocation to basic floorplate leasing—NextDC could serve hyperscalers and SMEs.
- Carrier neutrality: Unlike telco-owned facilities, NextDC provided clients full choice of bandwidth providers—massively attractive to multicloud and hybrid IT customers.
- National footprint: Expanding into every major metro market across Australia, with a clear strategy to scale capacity ahead of demand.
NextDC was not just leasing racks—it was becoming Australia’s digital backbone.
The Flywheel: Power, Proximity, Platform
What impressed me most was how NextDC created a flywheel of value:
- Location: Building premium data centres in prime urban edge locations—ideal for latency-sensitive applications.
- Design: Highly modular, high-efficiency builds tailored to both wholesale and retail customers.
- Interconnection: Creating a cross-connect marketplace within each facility, allowing customers to directly peer with one another or with major cloud providers.
The result? A sticky ecosystem where switching costs were high, customer churn was low, and power density (a key margin driver) could be continuously optimized.
Holding Through Cycles
Over the last decade, NextDC has been a consistent performer—expanding data centre footprint, maintaining strong EBITDA margins, and earning trust as the home base for enterprise Australia’s cloud journey.
Even through broader tech cycles, its real estate-backed, utility-like earnings stream offers resilience and cash flow predictability—exactly the kind of foundational compounder I look for in the G1 portfolio.
Final Thoughts
Today, the world is even more data-hungry:
- AI workloads require ultra-high-density racks and cooling
- Video, voice, and gaming traffic is booming
- Regulatory sovereignty is driving demand for in-country data hosting
NextDC remains at the centre of all of these tailwinds.
In a world where cloud gets all the attention, NextDC is the ground-level real estate, power, and plumbing that makes the digital economy possible.
I backed the company over a decade ago—and I’m still holding today.
