Tesh Durvasula, CEO at Africa Data Centres.

Africans want their data to remain within their country’s borders, and this is driving investment into datacentre infrastructure on the continent says Tesh Durvasula, CEO at Africa Data Centres.

There are massive opportunities within Africa’s datacentre space as companies look to capitalise on an increased focus on data residency and sovereignty.

Durvasula says growth is also being sustained by the rise in new technologies including AI, automation, IoT, and analytics, which are being democratised by the cloud.

There’s no doubt that more digital infrastructure is needed to store, process and use all of the data that is being generated by these technologies.

“By committing to Africa through the continuous deployment of capital-intensive infrastructure projects, companies can have a pivotal knock-on effect for communities and economies across the continent. Firstly, this enables multinational organisations to enter the market with confidence, knowing their future growth is assured. Secondly, without access to always-on, high-speed datacentre facilities, the private sector cannot compete globally and will see slowed growth locally; equally important is the impact IT services have on the public sector – from healthcare to transport infrastructure,” adds Durvasula.

But there are challenges and several hurdles that potential and existing investors have to tackle to leverage growth.

Durvasula says, “Many regions simply don’t have the necessary infrastructure and access in place to support connectivity. Challenges include strengthening co-ordination frameworks, aligning policies as well as sector regulations, and more investment and dedication of resources. The African Union Commission is working with other institutions to pinpoint and address Africa’s digital barriers and ensure that necessary reforms are put in place to guarantee future investment in digital transformation on the continent.”

“Another challenge is that almost 300 million in Africa don’t live in areas with fibre or cable broadband, meaning that the availability of high-speed internet is still a major problem that is preventing the continent from reaping the benefits of digital transformation.”

Africa Data Centre’s roadmap

Africa Data Centre has based its infrastructure development strategy on several factors, but key to its plan is to fill a void that exists on the continent.

Durvasula says Africa currently accounts for less than 1% of the world’s datacentres supply and lacks the capacity to store, process and control its data. But it is still potentially the most attractive continent for datacentre investment “due to its burgeoning middle class, young population, of citizens, entrepreneurs and innovators who are hungry for digital services, and are keen to go online. There is no doubt the continent is massively under serviced, and Africa Data Centres aims to address that.”

The company’s executive leadership reaffirmed plans to build large ten hyperscale datacentres in ten countries in Africa over the next two years at a cost of more than US$500-million.

Says Durvasula: “We have already begun to acquire the land we need in these countries and plan to roll-out very quickly to meet the needs of our existing and new customers. This is only the beginning for us though, and will more than double our already significant footprint on the continent. By scrutinising Africa’s growth trajectory, we have made investment decisions around our new locations and are also committed to expanding selected existing locations. We expect several industries will be given a boost by our expansion plans, particularly the banking and growing Fintech sectors, insurance and medical organisations, the public sector, hyperscale cloud providers and content providers.”

And Africa Data Centres is not alone. The market is ultra-competitive, and more so now with hyperscalers having set up shop.

“Competition in any marketplace is healthy, even essential to competitive services and offerings,” Durvasula adds. “There is a massive demand for digital tools and services across the world, and Africa is no different, and its people, like their US, Asian and EU counterparts, want to harness the same benefits that participating in a digital economy brings to the table. Africa wants these services and I have no doubt that we are underestimating the capacity we need. There is more than enough room for everyone as the continent is becoming a place where digital infrastructure will continue to expand for many years to come. Reports suggest that we need 1000MW and 700 facilities to meet Africa’s growing demands and bring Africa to a level place in terms of capacity and density, but if history has taught us anything in this industry, and I've been in this industry for many years, is that our ability to underestimate the demand side of this equation has been unbelievable. I believe we are underestimating Africa’s demand, much like we underestimated in in Europe and Asia. We are not worried about business in Africa in the slightest.”

Investment flow

Durvasula says that according to Research & Markets’ Africa Data Centre Market Report 2022, the continent is attracting major investments led by South Africa, Kenya, Egypt, Nigeria, and Ethiopia, and Africa Data Centres would add Morocco to that list.

“All countries need more datacentre capacity, but we believe the above-mentioned nations will lead the charge, and act as hubs for the rest of the continent. We also need to look at the countries in which global cloud service providers such as AWS, Microsoft, IBM, and Oracle are expanding their presence, as datacentre development will follow suite. There is a massive opportunity for vendors to grow in these areas and drive the demand for hyperscale datacentres in Africa.”

Another reason for the increased interest in Africa is because of the obvious and increasing need for datacentres to manage storage, app development and deployment, as well as hybrid working and online customer platforms.

“It makes sense that flexible work and hybrid workforces are driving increased investment in technology and data around the world. The ever-evolving landscape of this post-pandemic world is also driving a need for robust virtual connectivity applications and cloud solutions. And as entities in every industry update their workplaces and seek to push their digital transformations forward, they are allocating an increasing amount of budget to cloud services and data storage which means there will be an increased demand for datacentres,” Durvasula continues .

“A hybrid workplace naturally demands greater datacentre capacity, because managing flexible facilities means that smart technologies such as utilisation tracking and occupancy planning are essential for any future planning around office space and suchlike. Moreover, companies that transition to flexible desks need space reservation systems and other tools to support those strategies.”

Durvasula says the demand for videoconferencing tools, which have become a critical part of the workplace thanks to the pandemic, remain high, and all around, shifting IT needs will continue to drive a demand for more datacentres.