Submarine cable investment and fiber connectivity to attract more data center investments in Africa, report
The data center market in Africa is attracting significant investments in recent years, led by South Africa, Kenya, Egypt, Nigeria, and Ethiopia and an increase in submarine cable investment and fiber connectivity is likely to attract more of these investments in the region. This is according to Africa Data Center Market – Industry Outlook & Forecast 2022-2027 report released this week by Research and Markets.
South Africa has the highest number of submarine cable deployments, followed by Nigeria and Kenya.
In Africa, there are more than 9 data centers that have added the white floor area of around 30,000 square feet area or more each in 2021. Several country governments are taking initiatives by developing special economic zones, and industrial parks, which provide tax exemptions for data center development.
Technologies such as the cloud, big data, and IoT generate more data through high-end applications and need more efficient systems for data processing. These technologies are growing the demand for advanced IT infrastructure in the African data center market.
According to the report, enterprises prefer servers that can reduce space in the data center environment without affecting performance. The competition between branded and ODM server suppliers will continue because multiple enterprises opt for server infrastructure based on open community designs (OCP). The increasing demand for server shipments will continue to grow moderately as enterprises move to the cloud or colocation platforms for their IT infrastructure operations.
UPS systems are being widely adopted to provide backup power for cooling systems installed in the facility. Cooling systems are essential for the smooth operations of data centers since maintaining an optimal temperature will avoid malfunctions caused by overheating. The adoption of lithium-ion batteries is likely to increase during the forecast period as their price will continue to decline.
In South Africa, the report notes that the market will witness the entry of global data center colocation service providers through independent data center developments and partnerships or via acquisitions by major colocation providers in the country. In 2021, Teraco Data Environments, Africa Data Centre, NTT Global Data Centers were the major data center investors
In Nigeria, the shift of industry sectors such as BFSI, education, retail, manufacturing, and others toward new technologies such as cloud and big data is likely to aid the growth of the market during the forecast period. Microsoft has partnered with the Nigerian government to launch projects in the country aimed at promoting connectivity, upskilling citizens, and increasing digitalization.
Global cloud service providers such as AWS, Microsoft, IBM, and Oracle are expanding their presence with new cloud regions. So there is an opportunity for vendors to grow in suburban areas and fuel the demand for hyperscale data centers in Africa.
In December 2021, Equinix announced its plan to acquire MainOne data centers with a sum of around USD 320 million to expand operations in Africa.
The new entrants have a strong opportunity with new innovative technologies of infrastructure in the Africa cloud data center. In addition, the threat of acquisitions is to be also high since global data center operators acquire existing data centers in the region.