Reawakening the data centre giant in Telkom

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While Telkom is facing a rapid decline in its traditional fixed voice business, the company believes its massive data centre footprint will propel it into the next wave of innovation.

So said Sipho Maseko, Telkom group CEO, in an interview with ITWeb yesterday after the JSE-listed company announced its annual results for the year ended 31 March, showing group revenue grew 3% to R43 billion despite a 22.2% decline in fixed voice revenue.

However, Maseko pointed out the telecommunications company’s cloud data centre business did well, and is one of the core strategic investments Telkom is banking on to unlock new revenue streams.

According to Maseko, for the year ended 31 March, cloud services in data centres grew by 10%.

The announcement comes as SA is a hive of activity on the cloud front, with international players such as Amazon Web Services (AWS) and Microsoft having established data centres on South African shores.

Telkom group CEO Sipho Maseko.
Telkom group CEO Sipho Maseko.

Stiff competition

Local market research firm BMIT expects SA’s cloud computing market to hit R23.6 billion by 2023.

In March last year, Chinese telecommunications giant Huawei also started offering its cloud services in SA. The company is leasing a data centre in Johannesburg from a partner, from where it is deploying localised public cloud services based on local industry policies, customer requirements and partner conditions.

US-based enterprise software company Oracle in September last year also announced plans to launch data centres in SA.

As competition in SA’s telecoms space heats up, Telkom believes its data centre infrastructure will give the company an edge.

Maseko noted the driver of growth in data centre services is that “as companies are looking to digitise their services, they then put a lot of their applications on our data centres so that they can have both redundancy and flexibility.

“We have 10 geographically-dispersed data centres across the country and we also have three tier four data centres.”

He explained that tier four is almost the top end of the data centre world because “it has the right level of connectivity, security, automation; they are modern, scalable and enable Telkom to do analytics-driven operations, and they are also hybrid.

“This means that in that area, we can also host Microsoft Azure, Amazon Web Services as well as other cloud platforms. So if your company uses Microsoft, they are able to host it on our platform − and not only to be consumed by that company but by other clients as well − and that’s the scalability dimension of it.”

Telkom is a partner to both AWS and Microsoft on the cloud front, Maseko said.

“We are one of the largest, if not the largest, Microsoft partner in this country. We have Microsoft engineers. Remember the client belongs to us but we are able to service the client and maintain their applications and that’s what BCX does.”

In as far as Telkom’s infrastructure investments are concerned, the company continues to focus on building a “data-led network”, said Maseko.

“The COVID-19 pandemic has shown us that you need appropriate data centre infrastructure that integrates and works very well with the connectivity infrastructure. So our 10 geographically-dispersed data centres are interconnected with our high-speed broadband.

“That enables us to give appropriate value proposition to all those that have applications they want to run, or content they want to store on our data centres.”

He added the data centres are fully managed with state-of-the-art security controls that proactively protect the integrity of all the digital assets.

“That’s one of the core strategic assets that we have, and as an asset class, it makes us very distinctive.”

According to Maseko, the BCX cloud strategy is built on an architecture of hybrid cloud principles, which means it can run multiple cloud platforms.

“This enables us to take a ‘workload-first’ approach and to determine the best hybrid cloud solution for our customers.

“Our customers are beginning to move to utility-based models where applications and services are consumed on digital platforms. One of the unintended consequences of COVID-19 has been to accelerate the migration to digital platforms virtually by all sectors in the economy and our data centres come in extremely handy to be able to provide that capability.

“The capability to manage and host these platforms exists in the current data centre footprint and is a very critical enabler or the next wave of innovation that we are looking to accelerate,” he said.

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