New SA data centres expected to be job creation machines

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 06 Jun 2019
Digital transformation through the cloud is expected to enable job creation.
Digital transformation through the cloud is expected to enable job creation.

The combined impact of the Microsoft Azure data centres, the newly introduced Huawei Cloud service and the imminent launch of Amazon Web Services (AWS) data centres will create much opportunity in the local cloud ecosystem, potentially generating thousands of jobs.

This is according to ICT industry experts commenting on the local multi-tenant data centre market, which is believed to be in the midst of a remarkable growth spurt, projected to significantly drive economic growth and in turn contribute to the creation of over 100 000 jobs in the next few years.

In March, Microsoft unveiled two Azure data centres; one in Johannesburg and another in Cape Town. The data centres will ensure world-class cloud infrastructure that will power emerging cloud, artificial intelligence (AI) and edge computing innovations across the continent, according to Microsoft.

Since then, a number of local organisations have been migrating their applications to Azure, to help them save costs, and gain improved efficiencies, data security and quicker response times.

In the same month, Huawei rolled out Huawei Cloud, “its first availability zone” for cloud services in SA. While the Chinese firm does not yet own any data centres locally, it is offering localised public cloud services from a leased data centre through a Johannesburg-based partner.

In October, AWS announced it will bring its data centres to SA, opening an infrastructure region in Cape Town, in the first half of 2020. The new AWS Africa region will consist of three availability zones.

While the African continent has always been a last frontier for global hyper-scale Internet and cloud companies, experts believe the local data centre and cloud market is in a growth phase that will not only jolt SA into a new digital era, but will also contribute significantly to SA’s economic growth.

“It is likely the combined impact of Microsoft and AWS data centres could be one of the big job generators of the next few years,” comments Arthur Goldstuck, MD of World Wide Worx.

“AWS is already a large employer in the ICT sector in the Western Cape, and has stressed that the new data centres will accelerate job openings there. Further, AWS is playing an integral role in training and qualifying South Africans for roles in the hyper-scale and AI environment. Microsoft has the advantage of deep penetration of Office 365, which in turn activates a strong footprint for OneDrive, which then has potential knock-on for Azure.”

Over the next few years, almost anyone qualifying as a Microsoft Azure or AWS engineer will be able to get employment, he adds.

“Huawei's data centres will be on a small scale compared to the two main players, but will grow rapidly as Huawei builds out its own cloud ecosystem,” Goldstuck points out.

Ray Rui, president of Huawei Cloud Africa Business Unit, says Huawei’s public cloud will be a long-term investment in SA that will include data centres, networks, local operations and sales representatives.

“This investment will drive job creation, cultivate local partners and train more ICT talent in SA. Huawei Cloud also reduces the need for organisations to invest in and maintain their own on-premises IT resources and enable industry upgrade rapidly. As a result, it will accelerate economic development in SA,” notes Rui.

Last year, Microsoft commissioned an IDC study, titled: “Economic Impact of IT and Microsoft in SA”, which found the cloud ecosystem will create around 112 000 new jobs in the country by 2020.

“Spending on public cloud services in SA would nearly triple from R4.29 billion in 2017 to R11.53 billion in 2022 and the adoption of cloud services would generate nearly 112 000 net new jobs in SA by the end of 2022. Around 50 000 of those jobs will come directly from the Microsoft ecosystem,” notes the study.

Today, 60% of software used in SA runs on the Microsoft operating system platform, with 80% of computers running Microsoft software, according to the study.

Saurabh Verma, head of ICT and digital transformation at Frost & Sullivan Middle East and North Africa, says local data centre revenue contributes 8% toward the overall ICT industry and is estimated to reach R8 billion in 2019. However, he cautions that job creation will not take place overnight.

“Setting up data centres alone won't create that many job opportunities, but it’s the services and offerings that are going to be built on the cloud platform that will create more opportunities. The job creation won’t happen in the immediate future, and it is more of a long-term progression.

“The data centres will ultimately support the development of the overall ecosystem; ie, with cloud, there would be new partners coming on-board, there would be developers who would develop new and industry-specific applications; and that is how the new data centres will create more opportunities. But again, this is more from long-term opportunities,” notes Verma.

Lillian Barnard, MD of Microsoft SA.
Lillian Barnard, MD of Microsoft SA.

How jobs will be created

The IDC research further found the IT sector in SA is expected to grow at a five-year CAGR of 4.25%, to reach R175 billion by 2022.

Mark Walker, regional VP for IDC Middle East and Africa, explains that the report shows the IT workforce enjoying growth well in excess of the general workforce, as IT spend outstrips general spend.

“IT spend had a growth rate of about 4.25% in 2017. Total workforce growth was 1.6%, while the IT workforce grew at 4.19%; so the IT workforce is growing about three times faster than the overall workforce.”

Geoff Brown, Sub-Saharan Africa regional manager at AWS, believes the new AWS infrastructure region in Cape Town will bring with it a number of highly-skilled, well-paid jobs and drive growth in cloud technology jobs.

“The adoption of AWS has produced an entirely new industry of ICT professionals where new roles are continuously created. A good example of this can be seen through our collaboration with the Explore Data Science Academy. AWS supports the Explore Data Science Academy to educate students on data analytics skills in order to produce the next generation of data scientists in Africa.

“These new roles also require a specific skill-set, which is why we are partnering with companies like Standard Bank and Vodacom to develop AWS cloud skills. The partnership aims to building an education and digital skills programme to be launched across Southern Africa, to train the next generation of African cloud experts,” Brown explains.

Deputy communications minister Pinky Kekana.
Deputy communications minister Pinky Kekana.

Types of jobs

Lillian Barnard, MD of Microsoft SA, says the launch of Microsoft cloud data centres in SA and the subsequent delivery of intelligent cloud services is expected to increase economic opportunities for organisations both locally and across the continent, leading to new kind of jobs, some of which are not even known yet.

“Digital transformation through the cloud will enable job creation. Of the 112 000 net new jobs mentioned in the IDC report, Microsoft expects in excess of 50 000 of these to sit in the Microsoft ecosystem. These will be, for example, cloud engineers, data specialists and cloud security analysts. Some of these jobs will also be driven by the requirements coming out of the innovations that are being built by businesses now and in the future.”

Microsoft has also made a "multimillion-dollar" investment to create economic opportunities for SA, through an Equity Equivalent Investment Programme, which allows the tech giant to invest in meeting SA’s shifting socio-economic needs, including funding in technology solutions in the agriculture and manufacturing sectors, explains Barnard.

Verma explains that while establishing new data centres in a country such as SA will have its fair share of operational challenges, it will spur new job types across the ecosystem.

“The challenges would be quite similar to any other developing economy; ie, consistent access to power and cooling, local administrative, finding, recruiting and retaining the right set of skilled workforce. The data centres will create opportunities across the entire ecosystem, including facilities management, civil and electrical engineers, network engineers, cyber security experts, administrators, physical security executives.”

Speaking at a recent Microsoft Annual Digital Summit in Sun City, deputy communications minister Pinky Kekana commented that Microsoft’s decision to invest in Africa, through the two data centres, is arguably one of the biggest fourth industrial revolution investments on the continent to date.

“It is important to note that these data centres contribute to our economy in job terms; approximately 100 000 new jobs will accrue as a result of this investment. They are an invention and an investment that will enrich the lived experience of many South Africans. It is an affirmation to South Africans, that the impossible is achievable if we all come together, as the government, the private sector and civil society,” noted Kekana.