[Africa Cloud Review] Simon Ngunjiri: Data centres are a growing investment opportunity in Africa
Last week, Global software giant Oracle announced that it has chosen Johannesburg as the site of its first African data centre. Joburg will be among the 14 locations across Europe, the Middle East, Asia Pacific, and Latin America that the company says it plans to open cloud regions to support strong customer demand for Oracle Cloud services.
This announcement came at a time when the demand for data centers in Africa continues to rise. According to Gartner, the Middle East and North Africa (MENA) data centre market, which includes cloud services, will see spending reach US$5.4 billion in 2022, driven by Digital Transformation initiatives across the region as well as growth in Internet penetration. In addition, industry leaders. believe that projected investment growth in data centre projects is influenced by a growing demand for higher-performance networks, increased management efficiency and the impact of the COVID-19 pandemic.
In fact, as we have highlighted in a previous column, Africa is suited to jump to the cloud more than its peers. Cloud adoption—including hybrid and multi-cloud adoption—is expanding fast among both private and public sector organizations of all sizes.
BitTitan, a provider of cloud migrations and managed services automation solutions, has also noted that there is a massive migration to the cloud by organisations in the Middle East and Africa.
“We have seen a growing trend in mergers and divestments as a result of the changing business dynamics brought about by the pandemic. Our data on migration project types in Americas and Europe have shown that this leads to increased activity and the trend is only growing. This will be a regular scenario soon in the Middle East as migrations do not stop after clients have been moved to the cloud,” said Antti Ålander, Channel Manager – EMEA, BitTitan said in an article published by Intelligent CIO.
Last week, US group Vantage Data Centres also announced that it is investing more than 15 billion rand ($1 billion) in its first African campus in Johannesburg. Vantage's carrier‐neutral 80 megawatts-capacity facility will include 60,000 square metres of data space across three facilities in Johannesburg once fully developed, making it the largest in Africa, the company said in a statement.
Teraco Data Environments Proprietary Limited, Africa’s vendor-neutral data centre and interconnection services provider, recently also announced the completion of Phase 1 of CT2, its new hyperscale data centre in Brackenfell, Cape Town – the largest data centre in the Western Cape.
These increased investments in data centers in Africa is a clear indication that cloud adoption in the region has reached new heights. In 2020, IT spending was hit hard by the pandemic and declined by 4.9% in the META region, according to IDC. The crisis caused by the pandemic, though, appears to have accelerated plans for digital transformation and related projects such as migration to cloud technology.
According to Knight Frank, Africa currently boasts just 140,000 sq m of data centre space, the same as Switzerland. However, rapid digitisation and the roll-out of 4G and 5G infrastructure across the continent means this is set to grow by 50% over the next five years.