May 31, 2016

African data centre market gains momentum

Rate of development presents operators with multiple investment opportunities says consulting firm

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A new report from international consultancy BroadGroup suggests that although Africa was originally cast as a mobile story, there are signs the transition to digitising economies is encouraging the development of carrier-neutral data centre facilities.

The report warns the journey will be challenging given the relatively low base from which demand in most countries is starting. “Data Centre Africa”, covers 16 country markets and research has identified 74 players with 91 data centres. It reviews these country markets to see trends, key players, where they are now, and how they are doing in the move to resolve supply issues such as reliable power infrastructure, alternative telecoms infrastructure, a national market for IP peering, international bandwidth connectivity and an evolving carrier-neutral data centre infrastructure.

Africa’s demand for data centres is largely being driven by the surge in the use of data services, businesses looking to host their fast-growing digital information locally, governments moving towards e-governance, and the roll out of fibre infrastructure across the continent.

The study says some African countries have a power surplus and are exporting power, adding there is growing investment in submarine cables to help with bringing in and distributing power. Even poor supply situations have their upside as enterprise users are forced to choose between investing in their own backup power-generating capacity or migration to a more cost-effective third-party data centre provider, says BroadGroup.

“Change has been slow but there are signs that growth is quickening,” says Philip Low, MD of BroadGroup. “A host of factors ranging from connectivity to physical environment to policy can act as barriers to growth, but this new report looks beyond these issues and reveals new data centre operators are discovering innovative solutions to provide services for their customers.”

The report suggests that potential in the markets which all operate at different speeds of development is significant. Egypt, Kenya, Nigeria and SA all lead in development of data centre ecosystems and are achieving faster growth.

IT outsourcing, content hosting locally and cloud are all at very early stages of evolution that can be accelerated with more distinct investment in fibre, low latency satellite broadband and sustained cable upgrades, and will eventually deliver an exciting and significantly-sized market opportunity, says BroadGroup.

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