South African data centre capacity could almost double in the next five years, given its favourable position on the African continent, as well as a booming digital economy that will require more capacity to store cutting-edge technology.
Although growth estimates vary, the least optimistic is for a value gain of two-thirds, with the top end being at more than double, based on comment provided to ITWeb.
Derrick Chikanga, IDC research manager of IT services, says the value of investment in data centres in South Africa will more than double over the next five years.
Justin Mackenzie, MD of VO Connect, notes that national data centre capacity is forecast to increase 92% by 2030 at a time when “South Africa’s digital economy is accelerating fast”. He based his statement on research from Mordor Intelligence.
Teraco’s estimates, at the bottom of the range, are based on Research and Markets.com's figures, and show growth of two-thirds.
South Africa is set to benefit from being the only country connecting the Indian and Atlantic oceans through subsea cables like 2Africa and Equiano, says Stefano Resi, head of data centre sales for Middle East and Africa at Nokia.
Resi adds that South Africa, the gateway to the entire Sub-Saharan region, is leading a growing concentration of hyperscale and co-location facilities supported by international connectivity and its network infrastructure.
Ilana van Schalkwyk, sector lead of ICT at Nedbank CIB, previously said data centres play a pivotal role in the digital transformation revolution. “As smart city initiatives gain traction, the demand for local edge data centres will increase. These centres will play a crucial role in managing the vast quantities of data generated by internet of things devices.”
South Africa, with a mature legal framework, education system and accessible business environment, has an ecosystem primed for digital innovation, says Resi. “These factors combine to make South Africa a fertile environment for large-scale data centre investment.
“Already, Johannesburg and Cape Town are hosting an expanding constellation of high-capacity facilities.”
Resi also points to shifting trends, such as a move away from enterprise and government-led facilities dominating the market 10 years ago with a focus mostly on storage and basic compute functions. Today, hyperscalers such as AWS, Google Cloud and Microsoft Azure are driving a more complex model of interaction.
Chikanga says growth is being driven by demand for cloud services, co-location space from enterprises, as well as requirements from regulators, such as for financial services, to have data stored in South Africa.
In addition, there has been a shift from traffic being mostly in and outbound along a North-South route, says Resi. Now, he explains, most data flows laterally within the centre itself, which requires a different type of networking – one that’s dynamic, secure, scalable and automated.
As a result, adds Resi, there is a move towards more interconnected digital services that need real-time interactivity and massive bandwidth inside the data centre. He notes this step-change has also prompted a redesign of internal architectures, with an emphasis on intelligent switching, AI-readiness and flexible scaling, while edge data centres are increasingly being used.
Teraco cites factors such as the increasing adoption of digital technologies and cloud computing, robust infrastructure investments, AI-ready infrastructure and a hybrid cloud approach as key elements that will push growth.
“South Africa, with its dispersed urban centres and vast geography, is uniquely positioned to build a tiered architecture of core and edge data centres,” says Resi.
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