The African market has become one of the world’s fastest-growing markets for commercial data centre deployments, a new report reveals.
The study shows African data centre providers have spent a cumulative $2 billion (R35 billion) on building data centre facilities since 2017, bringing to market more than 200MW of fresh commercial IT load capacity, more than over the entire previous decade.
The study, The African Data Centre Gigawatt, released yesterday at Africa Tech Festival 2022 in Cape Town by Xalam Analytics, a digital infrastructure investment consultancy, notes the African data centre market is in the midst of a remarkable growth surge.
In its report, Xalam covered South Africa, Nigeria, Kenya, Ghana, Egypt, Ethiopia, Morocco and Cote d’Ivoire.
It provides key market dynamics, outlook and economics in Africa’s growing data centre market. It includes forecasts, competitive landscape and key analysis of issues ranging from overbuild risk, to sustainability, hyperscaler deployments and data centre valuations.
Xalam says the African market is now in the midst of a seminal phase of construction activity, with around 70 new facilities built over the past five years, with 2022 the biggest year of construction to date.
It notes Africa’s commercial hosting capacity has surged and is now doubling every three years.
“For much of the past decade, data centres were the weak link of Africa’s digital infrastructure buildout − a market segment too small and too insular to be meaningful. No longer,” says Xalam.
“As broadband penetration continues to increase, African markets have witnessed an unprecedented wave of data centre capacity buildout, driven by the awesome pressure to harness the explosive flows of data traffic sweeping the region, the gravity-like pull of physics and network latency, and the rising but no less powerful demands for national data sovereignty.”
The company says global investors are taking notice. Digital Realty and Equinix, the world’s largest data centre colocation providers, have entered the market with acquisitions, “perhaps the clearest indication yet of the mainstreaming of African networks into global interconnected platforms”.
The magnetism
Today, Xalam says, African data centres are some of the most highly-valued assets in the region’s digital infrastructure fabric.
However, Xalam notes the rise of the data centre market has also unleashed a new set of questions.
“Our new report looks deep into the drivers of African hosting capacity growth, analyses key questions facing the sector, from overbuild risk to true demand potential, likely hyperscaler destinations, edge strategies, sustainability in the face of power and water shortages and overall investor value.”
Guy Zibi, MD of Xalam Analytics, adds: “This research puts some substance into what we have been witnessing. The African data centre market is entering the high-growth phase of its evolution cycle, a phase reflected by massive expansion as hyperscale cloud markets densify, and demand in some larger economies starts to live up to presumptive potential.”
“We are projecting live commercial IT load to nearly triple from 2021 levels,” the report notes. “The size of this market is now doubling every three years, a growth surge that is reflective of Africa’s transition from the age of broadband to the age of cloud, and the scale of local hosting capacity needed to support it.”
For SA, the Xalam analysis supports events on the ground, as the local market has in recent months seen aggressive investments in data centre infrastructure in anticipation of increased demand for cloud services.
Data centre service providers are also expecting an increase in data traffic as a result of more submarine communications cables coming to Africa.
In the past 12 months, international companies have been setting up base in South Africa.
According to a recent report by DLA Piper, South Africa currently has over 50 active data centre locations, with the number growing by the day.
This, as the demand for data centre access on the African continent, and specifically South Africa, has grown exponentially over the past few years.
Share