A roadmap for Africa’s data centre market: Part 2
In my last post (Part 1) I ranked each of the African regional data centre hubs according to its stages of development.
In this post, I get into more detail about where each of the four hubs, South Africa, Egypt, Kenya and Nigeria, are currently and are headed in terms of development.
South Africa (south region)
Southern Africa – and Africa – is currently dominated by the South African market. By any measure, it is by far the most developed data centre market with the deepest history and broadest reach:
- The telecom market is open and enjoys the presence of both local and global operators.
- The colocation market is vibrant. Teraco has been the dominant player in the space for more than five years and has been growing at a great rate; being acquired by Digital Realty sent a huge signal that the global players see South Africa as a key market. Additionally, Vantage Data Centre have opened the first phase of a 120MW campus in Johannesburg and Yondr are soon to start on theirs.
- Hyperscalers are present in both Johannesburg and Cape Town and continue to build more space as demand for their services grow.
While the South African market has seen massive growth over the last few years, there is still more room to grow as demand for cloud and content grows, and we start moving to the edge.
Egypt (north region)
The North African region is still in its very early days and we are yet to see a ‘hub’ location establish. Egypt is the most likely location as it has the most developed economy and a strong telecom/IT sector. But:
- The telecom market is still closed and regulated by the government. There is talk of de-regulating the market and opening it to competition, but this seems to be some time off. Until this happens it will not give colocation data centre operators much incentive to open in this market.
- Saying that, given the strong demand for IT services, cloud operators have been teaming up with local telecom operators to offer their services in this region.
Kenya (east region)
Kenya has established itself as the hub in the East African region, driven by a government that has been pushing to open the economy to business for some time now. This can be seen in:
- An open telecom market, which has numerous local and global operators servicing the market. This had been enhanced by the arrival of more submarine cables, i.e. 2Africa in Mombasa.
- The colocation market is a vibrant one with local (IXAfrica), pan-African (ADC, PAIX) and global (iColo/Digital Realty) players all present, building and/or expanding.
- The hyperscalers have established some presence but are yet to deploy large scale data centres like South Africa.
Nigeria (west region)
There is still some debate as to whether Nigeria or Ghana will be the West African hub, but based on development to date, Nigeria is currently the clear winner. What we have seen so far is:
- A relatively open carrier-neutral market, but deeply fragmented – this makes it hard to have a network solution that is joined up across the region. This is a huge challenge for connectivity.
- Developing colocation scene with ADC opening recently, Kasi breaking ground, OADC announcing a development and Rackcentre expanding.
- Recent M&A [SA1] action has seen the Nigerian colocation space hot up, with Equinix acquiring Mainone and Digital Realty investing in Medallion. These actions signal a commitment by these global players and shows that they see West Africa as a key market.
- As with East Africa, the hyperscalers are yet to make a large commitment to this region but they have deployed cloud nodes in preparation.
What about the rest of Africa?
That is a good question! While development in these 4 countries hubs has been building, this hasn’t stopped local demand, or anticipation of demand, driving some data centre operators to develop in local market. For instance:
- Ethiopia – with a population of >110m and an telecom market that is opening up to competition, bordering Djibouti with its numerous submarine cable, Ethiopia could be a powerhouse in north east Africa, with various data centre under construction in an ICT park in Addis Ababa
- Morocco – the confluence of Africa, the Middle East and Europe, Morocco has many advantages as a regional hub for north and west Africa
- Ghana – considered a rival for Nigeria as the west region hub, with friendly business environment and submarine cable connections it too could be a contender for the west Africa hub…
To name a few…
The African data centre landscape is hard to grasp as a whole, but there are clear pattens of development when you dig further.
Here I’ve given a brief snapshot of each region as it looks now, how it is on its own path and its stage of development. Hopefully this gives you a big picture view to help you begin to think about how you might deploy into these regions.
For a deep dive on the numbers in any of these locations, or on how your business can leverage this opportunity, reach out for a chat.