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'Meteoric rise' of local data centres continues unabated

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South Africa currently has over 50 active data centre locations, with the number growing by the day.

So says André Visser, corporate partner at law firm DLA Piper in South Africa, commenting on the company’s study, entitled “The meteoric rise of the data centre: Key drivers behind global demand”.

According to the report, the total investment in global data centre infrastructure more than doubled last year, up from $24.4 billion in 2020 to $59.5 billion in 2021.

It adds the total number of data centre transactions increased by 64% in the same period, up from 69 in 2020 to 117 in 2021.

In the first quarter of 2022, Acuris Studios, on behalf of DLA Piper, surveyed 100 senior executives on the topic of data centre infrastructure.

On the South African front, Visser says the demand for data centre access on the African continent, and specifically South Africa, has grown exponentially over the past few years.

He notes data centre facilities are some of the largest construction projects currently, and the investment in infrastructure, technology and telecommunication that accompanies that has been significant.

“South Africa currently has in excess of 50 active data centre locations, and that number is growing,” says Visser.

“This also creates opportunities in the power generation and supply markets, specifically for renewable energy resources. Although the focus on ESG [environmental, social and governance] in South Africa is not comparable to that in the US and Europe, the awareness of ESG in the market, and specifically around technology projects, is increasing.”

Launch after launch

The report comes as SA is witnessing increased activity in the data centre space. This, as organisations anticipate a surge in data traffic on the African continent, with more organisations taking their workloads to the cloud.

Today, Africa Data Centres, part of the Cassava Technologies Group, a Pan-African technology group, announced it is building a second data centre in Cape Town.

The new 20MW facility will cover 15 000 square metres in eight data halls and is situated on the northern periphery of the Cape Town city centre.

Yesterday, Africa’s edge data centre firm, Open Access Data Centres (OADC) – a WIOCC Group company – announced deployment of a further nine OADC Edge data centres in South Africa.

In a statement, the company said by the end of August, 26 edge data centres will be live, growing to 100 by the end of 2022.

It said the newest OADC Edge data centres are being deployed in Pietermaritzburg, New Germany, Mount Edgecombe, Beaufort West, Paarl, George, Kimberley, East London and Brits.

The 26 OADC Edge data centres offer co-location, rooftop access and high-speed network interconnectivity between facilities at up to 100Gbps and on multiple routes for diversity.

According to OADC, rollout is continuing into key connectivity hubs, with new 2-3MW, Tier III OADC facilities coming online in Johannesburg and Cape Town during Q3 2022.

By consolidating edge computing, edge data centres and hyperscale connectivity within a single ecosystem, OADC says it has rapidly established an environment that enables 5G operators, internet service providers and fibre providers across South Africa to quickly and cost-effectively extend network reach into new markets to take advantage of business growth opportunities.

Hyperscalers such as Microsoft Azure and Amazon Web Services have also set up data centre facilities in SA as the market continues to grow.

In January, US-based enterprise software giant Oracle officially opened its Johannesburg-based data centre − its first cloud region on the African continent.

In October last year, Vantage Data Centres, a US-based provider of hyperscale data centre campuses, announced the beginning of construction on its new R15 billion state‐of‐the‐art data centre campus in SA.

Other players have also opened new data centres locally, including Dimension Data and Teraco Data Environments.

The South Africa data centre market share is witnessing an increased adoption of cloud-based solutions among enterprises and is rapidly emerging as a centre for public and private cloud hosting.

Cape Town and Johannesburg are the significant locations preferred for data centre development.

Globally, DLA Piper says the extraordinary growth of data centres is expected to continue this year, supported by the fact that there have been 41 transactions, worth $21.3 billion, for the current year to 7 June.

It explains this is an increase of over 100% compared to the same period last year, noting that 45% of developers, 56% of debt providers and 67% of equity investors are planning to invest in four or more data centre projects in the next 24 months; up from 10%, 27% and 37%, respectively, that invested in four or more data centres in the past 24 months.

The record-breaking demand for data centres is driven by the growth of hyperscalers, such as Facebook, Google and Microsoft, which have thrived amid the transition to cloud service, which has itself been escalated by the pandemic, says the company.

Anthony Day, global co-chairman of technology and sourcing at DLA Piper, says: “Our report reveals record-breaking investment in data centres. There is no end to this demand, with investment to date in 2022 more than double for the same period in 2021.”

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