As the chief executive of a multi-tenant, multi-location, open access data centre company that focuses on colocation as a core competency, I engage with global and local cloud companies addressing regional growth dynamics. As such, I get great insights into likely business growth related to cloud consumption and likely future scale-up plans for bringing cloud services on board.
There are a wide range of compelling, strategic growth drivers for cloud in Africa, a continent with 17% of the world’s population but generates just 4% of global GDP and only has 1% of the world’s data centre capacity.
The cloud delivers digital services on a pay-as-you-need or pay-as-you-grow basis: a business model that depends upon having the enabling infrastructure in place – high-capacity international fibre-optic subsea cable systems and digital terrestrial infrastructure - to provide affordable broadband access.
Broadband penetration
Broadband penetration is key to delivering content to the point of consumption. The International Telecommunications Union estimates that a 10% increase in broadband penetration can realise up to 2.5% growth in GDP, which itself triggers a virtuous circle of growth. However, a critical issue restricting development has been the limited availability of broadband away from the undersea cable landing stations at inland points of use.
Pan-African wholesale carriers, such as West Indian Ocean Cable Company (WIOCC), are expanding open-access fibre connectivity across the continent to enable broadband penetration, together with edge data centres, to efficiently serve content at the point of use.
Broadband penetration has been rising, primarily through expanded deployment and uptake of new mobile technologies. Growth of 5G in the continent has been slow to date, with the relatively high cost of 5G-enabled devices a constraining factor, although 5G licences have been awarded in a number of countries including South Africa and Nigeria.
Further growth in connectivity will be a significant catalyst for cloud growth.
International subsea cable systems
Africa’s international subsea connectivity is increasing enormously with the deployment of two 140Tbps+ subsea cable systems – Equiano and 2Africa, which are to be activated in 2023 and 2024, respectively – interconnecting many locations on the continent’s eastern and western seaboards.
This impending increase in international subsea capacity is a key driver for further investment in terrestrial infrastructure, as is the wider deployment of advanced 4G and 5G mobile technologies, the increased need to support remote working and the migration of services and applications into the cloud.
Terrestrial connectivity
According to Hamilton Research, in June 2022 Africa’s total inventory of operational terrestrial fibre-optic network increased by 34,474km to 1,184,028km during the previous 12 months.
Connectivity to point of use is dominated by mobile connectivity. According to the GSMA, just 40% of the population of the sub-Saharan Africa region are connected to mobile telephony, while 917 million SIMs were in use in 2021.
Although service in the region is currently dominated by 3G, 4G is expected to prevail by 2025.
Data sovereignty
Growing numbers of African countries are enforcing sovereign data protection rules, compelling data to be held in-country. While this helps drive adoption in large countries, such as Nigeria and South Africa, it leaves smaller countries underserved. Instead, a pan-Africa sovereign data framework, similar to the Europe-wide General Data Protection Regulation (GDPR), would benefit all of Africa’s countries, by driving cloud adoption growth through increased demand.
Converged, open digital infrastructure
The real growth catalyst for cloud in Africa will be a combination of hyperscale fibre connectivity and an interconnected network of open access, carrier-neutral core, “midi” and edge data centres, with vibrant interconnect ecosystems featuring internet exchanges, in multiple countries.
Since securing US$200 million of funding in November 2021, transformational, award-winning data centre operator Open Access Data Centres (OADC) has rapidly moved to deploy more than 30 carrier-neutral data centres that are now operational in South Africa, with more under construction there, in Nigeria and the Democratic Republic of the Congo.
OADC’s unique core-to-edge architecture supports:
• broadband, mobile operators and ISPs in cost-effectively extending network reach;
• the cloud community in migrating content closer to the network edge;
• the enterprise market in disaster recovery and processing large data sets close to their point of origin and consumption;
• deployment of new revenue-generating, latency-sensitive applications;
• cost-optimisation of network connections; and
• establishment of local interconnect points and interconnect ecosystems, disaggregating peering away from the large core data centres.
Multiple drivers for cloud growth
Given their proven impact on GDP growth, the expansion of digital infrastructure and increased broadband penetration will be transformative for Africa. And the most significant drivers for cloud growth in Africa are rising broadband penetration, digital infrastructure expansion, increasing subsea and terrestrial connectivity, and a pan-African data sovereignty framework.
