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There is a considerable amount of  investment going into carrier-neutral data centres across sub-Saharan Africa, which will lead to the adoption of cloud services also gathering pace. This is according to Balancing Act CEO Russel Southwood.

Southwood was speaking at the AfricaTech Festival where PCCW Global, in collaboration with Balancing Act, launched the Africa Interconnection Report 2021, which provides an analysis of sub-Saharan Africa's cloud and data centre ecosystem. The AfricaTech Festival, a virtual event, began on the 9 November and ends today.

According to Southwood, while Covid-19 has pushed many businesses to accelerate their consideration of cloud services to help them operate in difficult times, they are also want a more strategic view of how cloud can drive their efficiencies and reduce their costs in the future.

Research methodology

The research was conducted during country lockdowns due to the coronavirus pandemic, Southwood said.

There were a total of 43 respondents in 10 countries across sub-Saharan Africa, who are CEOs, MDs and Heads responsible for data centres and their companies' cloud service activities in the following industry categories: data centres, cloud service providers, carriers and ISPs, enterprise users and other (investor, platform, vendor).

Market drivers

Southwood provided a simplified snapshot of the key drivers of data centre and cloud services markets in sub-Saharan Africa. “One of the things to look at is what encourages data centres and cloud services in the ecosystem? “he said.

The first factor is the size of the economy, he said. Using that criterion, the Africa Interconnection Report 2021 identified 9 countries as first division economies in sub-Saharan Africa due to the size of their economies: Nigeria, South Africa, Ethiopia, Angola, Sudan, Kenya, Tanzania, Ghana, Djibouti and the Democratic Republic of Congo.

This was followed by 6 smaller but nonetheless relatively larger economies that make up a ‘second division’ of the following six countries in descending scale: Cote d’Ivoire, Cameroon, Uganda, Zambia, Senegal and Mali.

The second factor that encouraged data centres and cloud services in the ecosystem, was population size, which provides an indicator of potential growth, Southwood said.

The third indicator is the number of mobile operators and ISPs, he said. The more operators, the greater the need for interconnection at data centres, he said. “Before data centres, we had Internet exchange points, and now its membership is a good indicator of the potential of carrier-neutral data centres,” Southwood said.

Something else that has to be in place is the regulatory climate, he said. Countries that protect the outgoing incumbent operators are not fertile ground for carrier-neutral data centres, he noted. “So countries like Cameroon probably will not be among the first wave of  data centre and cloud service adoption, he said.

However, there are some exception, Southwood said. Djibouti, by accident of geography, is a regional hub for a number of international cables that pass to other parts of Africa. “You've also got Cape Verde, whose higher wealth levels may mean it becomes a cloud service and data centre ecosystem, not necessarily because of the number of who are there, but because of their wealth levels.”

Southwood notes that there are already carrier-neutral data centres in Nigeria, South Africa, Kenya, Ghana, Cote d'Ivoire, Mozambique, Mauritius and Djibouti, and more are planned in Nigeria, Ghana, the DRC,  Cote d'Ivoire, Uganda, Botswana, South Africa, Rwanda and Ethiopia.  There are also another possible six countries which will have carrier-neutral data centres or have one planned. “So, something like a quarter of sub-Saharan African countries will have carrier-neutral data centres or have one planned,” Southwood said.

Trends to watch

One of the interesting things to look at is international presence at Internet exchange points and carrier-neutral data centres, Southwood said.

The greatest international presence is currently found at Internet exchange points, of which there are 28 across sub-Sahara Africa, he said. “Obviously this position will change. There is no IXP in Ethiopia, for example, but Raxio, a carrier-neutral data centre is coming there soon,” he said.

“It should come as no surprise that the greatest concentration of these international companies is in South Africa, followed by Kenya and Nigeria. So the future presence of  international companies will expand with carrier-neutral data centres,” Southwood said.

The cloud services landscape also includes a distribution of hyperscalers across major countries, he noted. There are 5 hyperscalers with an active interest in Africa, he said. Microsoft, which probably the largest footprint, AWS, which is actively promoting very attractive offers for first time users, Google Cloud Services, and Whale Cloud Services. Alibaba, who are the owners of Whale Cloud Services are planning to recruit 5000 people globally this year, Southwood  noted, though he did not explain whether these new employees would be placed within Whale Cloud Services.

Future patterns

Southwood added that while Microsoft currently has the largest footprint in Africa, that position will change in the next two years. There are local data centre cloud products – for example, Multipla and Angola Cables in Angola have different offers.

Seacom also has a local offer. There are also neutral local suppliers in South Africa, which has the greatest number, Nigeria with 3-5, Kenya with 2-4 and Uganda, Ethiopia and Cote d'Ivoire also in play, he said. There is also a neutral cloud platform called Connected that is hosted by Teraco in South Africa.

Southwood added that it seemed unlikely that each African country would have their own carrier-neutral data centre.

“The more likely scenario is that there will be regional carrier-neutral data centre locations with Teraco in South Africa emerging as the most likely candidate, the Rack Centre and NDXI candidates in West Africa. There is no clear candidate emerging in East Africa yet,” he said.

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