Alibaba's silver lining

It’s taken a while, but Alibaba and BCX have teamed up to bring hyperscale services to South Africa.
Matthew Burbidge
By Matthew Burbidge
Johannesburg, 09 Nov 2023
Reshal Seetahal, BCX
Reshal Seetahal, BCX

And then there were five. With the entrance of Alibaba into the South African market, all five of the world’s leading hyperscalers now have a presence in the country. It joins Microsoft, which got an early start in March 2019, which was also the year of Huawei’s entrance, and was followed by Amazon in April 2020. Google announced in October 2022 that it would be opening a local region.

The label hyperscale is reserved for the very largest of the cloud service providers. All these companies use distributed infrastructure to process data, and scale as more demands are exacted from the system. In the past, only large enterprises with a global footprint needed this kind of model, but now, it’s used by companies of all sizes.

Alibaba is in a partnership with BCX, and the pair threw a launch party for their Africa Local Public (ALP) Cloud at BCX’s offices in Centurion in early October.

There will be two zones, or Alibaba datacentres, in the South Africa region. One will be in BCX’s Midrand datacentre, and the other will be in Teraco’s colo building in Isando. It’s also envisaged that a Cape Town zone will come on stream sometime next year.

BCX already has a cloud service, called One Cloud, and customers are mainly using it for Infrastructure-as-a-Service.

Last in, first out

Reshal Seetahal, executive, Alibaba business unit, BCX, says it can now offer customers hyperscale services.

“If we look at some of our customers who are migrating, they’ll be migrating to hyperscalers because there are more products and features compared to what we have on One Cloud.”

He adds that it’s preparing to launch ALP Cloud in Mozambique, all the better to serve its customers in that country.

“We’re the last hyperscaler coming to South Africa, but we want to be the first into Africa.”

The Mozambique datacentre can also be used for disaster recovery by South African customers, and he mentions that Mozambique is not constrained by loadshedding.

We’re the last hyperscaler coming to South Africa, but we want to be the first into Africa.

Reshal Seetahal, BCX

BCX has been doing research into the African market to gauge what requirements businesses have in the region, one of which was the demand from central banks that financial institutions hold their core data inside the country.

Does it still matter where data is being kept?

“For the central banks in Africa, it makes a big difference,” he says. “If the core data isn’t in the country, there are penalties. Some financial institutions in Mozambique are currently hosting in South Africa, and they’re being penalised.”

Seetahal says it already has one customer, an educational institution, which is live on Alibaba, and there are a number of others eagerly awaiting the launch.

But why, I wonder, have customers been waiting specifically for ALP when there are so many other players on the market?

Local billing

Seetahal allows that there is no shortage of cloud providers, but customers don’t like being billed in dollars, because “they can’t predict their bill at the end of the month.”

ALP will thus be billed in rands, and, one presumes, in meticais in Mozambique.

As to how it’s been able to offer local currency billing, he says: “It’s a partnership. We’ve both invested in the infrastructure we’ve deployed, and based on that investment, one of the things we agreed on was local billing.”

As for how the partnership has been drawn up, Seetahal says BCX invested in the datacentre kit, while the software and support come from Alibaba, or, as he puts it:

“It’s a two-way road that we’ve invested in.” Is BCX still having the on-prem versus cloud conversation with its customers?

“We are,” says Seetahal. “Maybe in the short term, buying your own kit and deploying the virtualisation will be cheaper. But if you look at it long term, how long will the kit last? How much will the renewal of those licences cost? Managing that environment… datacentres, security, resources… these are the factors you need to take into account.”

Juan Venter, head of cloud advisory and architecture at Restack, a BCX partner, was also at the launch, and says there are a couple of different models a business can examine when deciding on cloud, such as the well-known capex versus opex.

“I’ve done quite a few scenarios where you do a full ROI, looking at the full TCO analysis, and that’s not just your consumption costs, but the project costs as well. You get to a net-positive [with cloud] in three to five years,” he says.

He adds that companies will have different requirements.

You can innovate because you’ve swapped a static architecture for a dynamic one.

Juan Venter, Restack

“What is cloud other than a buzzword? It means you have an infrastructure, and you’ve got a management layer on top of that, which offloads human cost and risk. And then you have a security plane, and that also offloads risk and people costs. Then, you’ll be deploying your SaaS services, and offloading even more cost. You can innovate because you’ve swapped a static architecture for a dynamic one. You can now experiment, and as soon as the experiment is done, you can shut it down. You can also right-size your resources. It goes beyond a cost discussion. If it was just a cost discussion, then the business needs to ask itself if it is going in the right direction. This [cloud] is linked to innovation.”

How does a business get the full value out of cloud?

Venter says if a firm is just throwing technology at business problems, “that’s not a good idea. Swapping an opex for a capex model is a complex financial model. It needs to be architected properly, and that goes back to knowledge management and understanding your posture. It’s not a free-for-all. If you think back, developers would spin things up and they didn’t know what they were deploying. With cloud, you need good governance, good policy management and tagging. If you plan it upfront, it’s not that much work afterwards. For example, a good tagging policy will compare your cost tags against your business units and you can optimise your business flows. If you have business units and deployments, you can actually start tagging resources and track an application to a business service.

“The more automation there is in place, the more complex it gets, and if you don’t have mechanisms in place to track that, it can get off the rails pretty quickly.

“My experience is that not planning for that complexity upfront is one of the biggest reasons why people fail. If you have the old model – IT as a cost centre – compared to a strategic partner, that’s where things fail.”


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