Drivers of the African Data Centre market 2015
As far as data centres are concerned Africa is a blank slate.
London alone has more than 2 times the number of DC’s than the whole of Africa.
The majority of DC’s in Africa are enterprise/Telco/Banking/Govt in-house. Very few are carrier neutral. There are also no Cloud DC’s to speak of.
With the advent of massive capacity brought about by the deployment of multiple submarine cables Africa can now connect seamlessly to the rest of the World at seemingly unlimited bandwidths. This increase in capacity of connectivity brings with it the benefit of lower costs which underpins a virtuous cycle of increased usage, higher demand, lower prices and so on.
As the international investment community starts to wake up to the opportunities brought about by fast growing (albeit off a low base) economies, rapid urbanisation, a young growing population, there will be a steady increase in FDI in infrastructure, agriculture as well as investment into services and retail. I consider telecoms infrastructure in general and data centres in particular to be critical infrastructure, a pre-requisite for economic growth.
Africa is on the cusp of a golden period where the upside opportunities far outweigh the negatives. To be sure Africa continues to face the challenges of war, famine and drought the most common narrative of the last 50 years. But a new Africa is emerging, as the intended and unintended consequences of the mobile revolution begin to take hold. These include transparency and access to information (World ‘out there’) and a democratic dividend. There are fewer conflicts (civil and otherwise), much greater intra-African trade, travel and tourism and a much reduced reliance on minerals/mining for growth.
Nevertheless there remain many challenges; the lack of institutional capacity; the volatility of the rule of law (SA and Al Bashir); the lack of infrastructure (especially power) and the low levels of industrialisation. However on balance Africa is much better off than it was at the turn of the new Millennium, since when African GDP has quadrupled.
The drivers of the data centre market will be:
1. Smartphone uptake (As users trade up from feature phones and consume and create more data.)
2. Regulation (Governments are starting to require that companies which operate in sensitive customer information such as Banks, Hospitals and Govt itself, must locate their data within the borders. )
3. Connectivity – (The availability of connections to the submarine cables)
4. Terrestrial fiber networks ( MANs/WAN’s etc)
5. The availability of finance (Especially for the lower end of the market)
6. The Internet of Things (The applications of myriad from agriculture to Health care)
7. Urbanisation ( which leads to smaller families, greater economic growth and higher consumption)
8. Power (The availability of renewable power – whether via the grid or via bespoke installations driving the DC) The lead time on the big power projects in Africa – whether they be coal or gas fired power stations, coal to liquid fuel, nuclear power stations, hydro-electric installations or even large scale renewable projects such as wind and PV – will only come on stream in about 5 years time missing the critical window of DC growth in Africa.
a. HQMC Nigeria 10 000Mw PV (2024) $30bn
b. Al Bader Coal to Fuel, Moz, (2020) $13bn
c. DOE/Rosatom Nuclear, SA , (2023) $$29bn
The further reason for co-locating PV / renewable generation with the DC is to obviate the need for transmission infrastructure.
In summary the opportunities are many and I foresee a massive spike in investment in the DC market over the next five years.
London alone has more than 2 times the number of DC’s than the whole of Africa.
The majority of DC’s in Africa are enterprise/Telco/Banking/Govt in-house. Very few are carrier neutral. There are also no Cloud DC’s to speak of.
With the advent of massive capacity brought about by the deployment of multiple submarine cables Africa can now connect seamlessly to the rest of the World at seemingly unlimited bandwidths. This increase in capacity of connectivity brings with it the benefit of lower costs which underpins a virtuous cycle of increased usage, higher demand, lower prices and so on.
As the international investment community starts to wake up to the opportunities brought about by fast growing (albeit off a low base) economies, rapid urbanisation, a young growing population, there will be a steady increase in FDI in infrastructure, agriculture as well as investment into services and retail. I consider telecoms infrastructure in general and data centres in particular to be critical infrastructure, a pre-requisite for economic growth.
Africa is on the cusp of a golden period where the upside opportunities far outweigh the negatives. To be sure Africa continues to face the challenges of war, famine and drought the most common narrative of the last 50 years. But a new Africa is emerging, as the intended and unintended consequences of the mobile revolution begin to take hold. These include transparency and access to information (World ‘out there’) and a democratic dividend. There are fewer conflicts (civil and otherwise), much greater intra-African trade, travel and tourism and a much reduced reliance on minerals/mining for growth.
Nevertheless there remain many challenges; the lack of institutional capacity; the volatility of the rule of law (SA and Al Bashir); the lack of infrastructure (especially power) and the low levels of industrialisation. However on balance Africa is much better off than it was at the turn of the new Millennium, since when African GDP has quadrupled.
The drivers of the data centre market will be:
1. Smartphone uptake (As users trade up from feature phones and consume and create more data.)
2. Regulation (Governments are starting to require that companies which operate in sensitive customer information such as Banks, Hospitals and Govt itself, must locate their data within the borders. )
3. Connectivity – (The availability of connections to the submarine cables)
4. Terrestrial fiber networks ( MANs/WAN’s etc)
5. The availability of finance (Especially for the lower end of the market)
6. The Internet of Things (The applications of myriad from agriculture to Health care)
7. Urbanisation ( which leads to smaller families, greater economic growth and higher consumption)
8. Power (The availability of renewable power – whether via the grid or via bespoke installations driving the DC) The lead time on the big power projects in Africa – whether they be coal or gas fired power stations, coal to liquid fuel, nuclear power stations, hydro-electric installations or even large scale renewable projects such as wind and PV – will only come on stream in about 5 years time missing the critical window of DC growth in Africa.
a. HQMC Nigeria 10 000Mw PV (2024) $30bn
b. Al Bader Coal to Fuel, Moz, (2020) $13bn
c. DOE/Rosatom Nuclear, SA , (2023) $$29bn
The further reason for co-locating PV / renewable generation with the DC is to obviate the need for transmission infrastructure.
In summary the opportunities are many and I foresee a massive spike in investment in the DC market over the next five years.
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