Business Hilights
Tracking Nigeria's Headline Business News Online

Why Nigeria’ll lead sub-Saharan subscribers’ in Teraco, Microsoft data centres in S’Africa

Barring last minute hitch, South Africa by year end, will join the likes of China, US, India and Israel to drag for control of world leading hosts of data centres.

Two facts attest to this; one, the largest data centre in Africa, and one of the largest in the Southern Hemisphere, developed by Teraco, is almost complete and will be open for business within three months.

Second fact is that Microsoft who had earlier planned to invest about $30bn in building its ultra modern data centre in Nigeria diverted the deal to South Africa, citing weak infrastructure and poor manpower in Nigeria.

But the irony of the massive foreign direct investment drifting to South Africa is that Nigeria will lead in capital flight to South Africa in search of the services of the growing number of data centres at the expense of local content development.

Already, Teraco says the continent has seen top operators, content creators and cloud providers committing to significant infrastructure investment.

The company noted in a statement that “In just under two years, African companies have started to fast-track the adoption of cloud and as a result are aggressively pursuing opportunities to migrate”.

Business Hilights gathered that Teraco had completed its Johannesburg West build in Isando earlier this year and is opening its Riverfields hyperscale data centre in response to growing demand for these facilities in Sub-Saharan Africa.

Demand according to the company is surging from Nigeria and few other countries in the continent.

Lex van Wyk, Teraco chief executive said “The demand is driven by big data and cloud computing, as well as enterprise organisations that consume these services locally, many of which have not been available locally or are only in limited functionality due to restrictions presented by high latencies due to distance”.

The data centre is situated in the east of Johannesburg in the municipality of Ekurhuleni. Teraco says this part of town was chosen because it has access to stable power, and is built on a reliable grid. It is 20km north of the current Isando campus. The company says it did not want it too far from Isando as it has 160 telco providers there that are servicing the rest of Africa.

Jan Hnizdo, CFO of Teraco, said the centre will be complete by 1 November. He says it is already 25% full, with customers pre-booking their space. In the next few days, generators will start going into the building and the site will be very busy, which is why tours have been offered so early.

Riverfields is the fourth facility built by Teraco, with the other locations in Cape Town, Durban and Johannesburg.

According to van Wyk, “The Riverfields facility in Bredell brings our power provision to 50MW, with over 18 000m2 of white space, all of which is required to meet the increasing demand for hyperscale computing”.

The facility covers 6 000m² of technical deployment space.

Teraco says internationally, researchers predict the global co-location market will grow to more than $50 billion by 2020, a CAGR of over 12% from 2015 to 2020. A significant portion of this demand is being driven by the enterprise, IT and telecommunications sectors.

“The hyperscale data centre market was estimated at over $1 billion in mid-2015, with significant growth forecast based on storage resource demands in distributed or grid computing environments,” the company says.