Data centres (DCs) are the lifeblood of the global digital economy. Consisting of large groups of networked computer systems and servers, they remotely store, process and distribute vast troves of data, and have been widely referred to as “the new gold”. Companies need DCs to monitor and improve performance, while governments require them to deliver essential public services.
Increasingly, DCs also host the cloud-based applications consumers rely on for day-to-day services such as banking and work collaboration, entertainment and navigation. Indeed, DCs helped to facilitate remote work during the Covid-19 pandemic, even amid strict lockdowns.
Market research firm Gartner estimates that the global market for DC provision will reach $200bn in 2021, up 6% on the previous year. As of mid-2021 Africa accounted for less than 1% of global co-location DC supply,but that is forecast to grow by 25% by 2023, according to advisory and research firm Xalam Analytics.
Revenue from the African DC market, meanwhile, is expected to expand at a compound annual growth rate of 12% from 2019 to 2025, to reach $3bn. Increasing demand for cloud based services and modular DC solutions from organisations, particularly small and medium-sized enterprises, and government agencies, will underpin the market, with more than 70% of African organisations estimated to shift to the cloud by 2025.
In mature markets the world’s largest technology companies maintain hyperscale DCs that house upwards of 5000 servers, in which one tenant leases several megawatts of space. Microsoft hosts the largest, in Chicago, with almost 200 MW available. In Africa demand has only recently justified the rollout of multi-tenant facilities in major markets. Late adoption has left a massive supply gap – Africa as a whole needs up to 1000 MW and 700 facilities to meet demand and bring capacity density up to par with that in South Africa, the continental leader.
Launching a DC can be challenging in Africa, where access to the resources necessary to run reliable services, such as power, land, water and connectivity, are often scarce. Even so, a combination of multinational and African tech and telecoms companies, often with significant venture capital backing, are quickly rolling out new facilities, each one reducing latency times, and enriching the digital economy in which they operate.
Governments and pan-African organisations are also playing an important role in nurturing the industry through supportive policy-making, while protecting the environment and critical infrastructure.
For its part, the Africa Data Centres Association, the industry trade organisation for the continent, connects equipment suppliers with DC operators, and ensures the industry’s voice is heard among the region’s top decision-makers.
MainOne established a presence in West Africa in 2010 with its 7000-km submarine cable from Portugal to Nigeria and commissioned its first data centre (DC) in the African country in 2015. The company has developed an interconnected ecosystem of telecoms operators and internet service providers, internet exchanges, content providers and other major institutions across the region, co-located in its DCs.
MainOne has increased the capacity of its DCs, which reached 5 MW in the key markets of Nigeria, Ghana and Côte d’Ivoire, with services delivered to a total of 10 countries across West Africa. The most recent addition to its portfolio is the Tier-3 Appolonia DC facility (see photo) in Accra, Ghana, which was launched in June 2021.
The company also began an expansion project in Lagos, Nigeria, with the goal of increasing its 600-rack facility to over 1200 racks by 2023, and further investment has also been directed towards the expansion for its DC in Côte d’Ivoire.
Through these investments, MainOne continues to deliver services via the company’s interconnection ecosystem, access to submarine cable system landings, the West African Internet Exchange in Nigeria and support for the entry of hyperscale players to the region.
Internet infrastructure housed inside DCs include internet exchanges, cloud exchanges, cloud providers, web-hosting providers, internet backbone carriers, content delivery networks, internet access providers and fibre operators.
DCs are non-descript buildings that contain vast banks of server racks, connectivity and storage systems, as well as redundant or backup power, redundant data communications connections, cooling installations, fire safety systems and security devices.
Maintaining such facilities independently is very costly, but co-location DCs operate lean business models by renting to multiple clients at the same time. Tenants are charged for space and provide their own hardware, allowing them to scale seamlessly, rather than having to estimate the cost of their business’ future IT requirements. Conversely, single tenant, or enterprise,
DCs only facilitate the needs of their own companies, such as a telecoms firm, bank or government that has its own in-house IT infrastructure. Carrier-neutral facilities, meanwhile, allow for interconnection between many carriers and are therefore wholly independent of any network provider, ensuring diversity and flexibility, and a level playing field for domestic and international clients alike.
Edge DCs are smaller facilities located near the populations they serve, while hyperscale DCs are large facilities that can scale up efficiently.
Hosting IT systems in co-location DCs offers several advantages. Chief among these is reliability: DCs are classified across four tiers that increase according to their level of redundancy and expected annual uptime.
Tier-1 DCs, for example, have a single path for power and cooling, and few, if any, redundant and backup components. They also have an expected uptime of 99.67%, equivalent to 29 hours of downtime annually. Tier-2 DCs have a single path for power and cooling, and some redundant and backup components.
They have an expected uptime of 99.74%, or 22 hours of downtime annually. Tier-3 facilities have multiple power and cooling paths in place to limit downtime to 1.6 hours annually. Tier-4 DCs, of which there are now a handful in Africa, are built to be entirely fault tolerant, with redundancy for every component, and an expected downtime of just 26 minutes each year.
Tenants can thus be assured that they will not lose business due to connectivity outages, which would have significant consequences for always on-demand services such as health care, for example.
Moreover, energy costs are lower, as DCs tend to use more efficient equipment – including chilled water systems – than on-premise operations. Lastly, as facilities are purpose-built to protect clients’ data and infrastructure, DCs offer a higher level security than in-house operations.
Africa has 140,000 sq metres of DC space shared among a little more than 100 DCs – figures similar to that of Switzerland alone. However, rapid digitisation and the rollout of 4G and 5G infrastructure across the continent mean that supply is poised to increase by 50% between 2021 and 2026.
More than 30 Tier-3 and above multitenant facilities have already come on line since 2016, approximately doubling the continent’s data hosting capacity to roughly 200 MW as of the end of 2019. However, capacity is unevenly distributed, with more than two-thirds based in South Africa. This is due to several factors, including the size of its economy ($351.4bn in 2019), links to subsea fibre-optic cables and a long-standing liberalised telecoms market.
It is also the locus of Africa’s largest internet exchange, NAPAfrica, which retains the largest number of peering connections on the continent, and provides international and regional telecoms carriers, content delivery networks, cloud providers and other stakeholders a gateway to over 20 southern African countries.
Johannesburg, the centre of DC provision in South Africa, hosts 55 MW of capacity, compared to 796 MW and 728 MW in Dublin and London, respectively. That said, South Africa’s largest city is already ahead of other up-and-coming DC markets, such as Madrid, Warsaw and Marseille. Another leading market in Africa is Nairobi, which hosts 19 MW of capacity.
Though the figure is about one-third of Johannesburg’s volume, Kenya sits on four major subsea cables, and boasts strong cross-border fibre connections and a vibrant stock exchange, making it well placed to become a regional centre. Elsewhere on the continent, Nigeria and Côte d’Ivoire boast similar advantages, as do Ghana and Senegal.
According to Xalam Analytics, 10% of the existing DC capacity serves nearly half of sub-Saharan Africa’s economic output and broadband connections. Moreover, one-third of Africa’s 80 or so cities with a population of more than 1m people have a DC rated Tier-3 or above, demonstrating the scale of the distribution gap.
Analyst estimates for the growth of the DC market in Africa are based on a confluence of driving factors, not least a rapidly growing population. The UN forecasts that more than half of the global population growth between 2020 and 2050 will occur in Africa.
The sub-Saharan population is estimated to double over the next 30 years to 2.5bn, led by Nigeria, which will overtake the US as the world’s third-most populous country. The organisation also predicts that more than half of Africa’s population will live in cities by 2040, eight of which will be mega-cities of 10m-plus inhabitants.
Presently, 15 African countries have economies and populations large enough to develop DC and cloud service ecosystems. Some 40% of the African population had access to the internet in 2019. This figure is set to increase by 11% over the next decade, when Africa is estimated to account for around 16% of the global internet user base.
The rise in internet uptake is expected to foster an increasingly digitised African economy. The internet economy is projected to be worth $180bn by 2025, growing to $712bn by 2050.
Meanwhile, data sovereignty regulations demanding that data is stored in-country, or at least within the five sub-regions that partition the continent, will help drive demand for localised data storage services. Research company International Data Corporation estimates that annual cloud computing subscriptions in South Africa alone will grow from $370m in 2019 to $1.7bn in 2024.
Indeed, governments themselves are increasingly driving demand for DC capacity. Senegal, for example, will transfer all government data and digital platforms from foreign servers to a new national DC, maintained by Huawei, in an effort to strengthen its digital sovereignty.
China is supporting Senegal’s shift to e-governance by establishing a national broadband network in the West African country and funding a “Smart Senegal” e-infrastructure project.
This enticing mix of growth drivers has attracted major international cloud service providers such as Amazon Web Services (AWS), Google, Microsoft and Huawei. As cloud providers proliferate, they will create a virtuous circle of DC demand by enabling an increasing proportion of businesses to move their operations to the cloud. Both AWS and Microsoft were early entrants into the African market, and are now seeking additional DC capacity, indicating that their ventures have been rewarded with successful business cases.
Multiple international hyperscale providers, including Alibaba’s Whale Cloud Services and Huawei Cloud, already maintain a presence in South Africa, while Nigeria and Kenya host several US providers, including Microsoft, which is also present in Angola.