The African connectivity and cloud computing market is generating a lot of interest and deals as players position themselves for the boom in data services on the continent.
Over the last four years, international cloud companies have rushed to develop data centres on the African continent. IBM announced its first Africa data centre in 2016.
In the first half of 2019, Huawei started construction on two data centres in South Africa with further plans to expand to Nigeria and Kenya. A month later, Microsoft launched its first Azure data centre in Cape Town and Johannesburg, both in South Africa. In February 2019, the US company also signed an agreement with Telecom Egypt to develop and expand Microsoft cloud facilities to the region.
In April 2019, Amazon Web Services (AWS) launched three data centre operations in Cape Town, its first ever African region.
Beyond these international players, African cloud companies are also making strategic deals across the continent.
In 2018, Econet-owned Liquid Telecom signed an agreement to invest $50 million to develop data centres and cloud services in Egypt.
According to the African Data Centre Association (ADCA), 20 new data centre facilities will come online across Africa by the end of 2020.
Teraco Data Environments, a South African cloud company, will spend $70.6 million to expand its capacity in the country. Teraco is backed by Berkshire Partners, a US investment firm managing $16 billion in assets.
Berkshire Partners became a majority shareholder recently and believes the cloud company “is exceptionally well-positioned to capitalize on the fast growth of the Sub-Saharan data centre [market]”.
Another investment firm entered the African cloud business recently. Actis, a UK-based firm, acquired a controlling stake in Rack Centre, a Nigerian data centre company focused on West Africa. The acquisition is part of a plan to invest $250 million in African data centres over the next three years.
These deals are not happening in isolation. There are a number of reasons driving this interest in cloud services on the continent. Rising adoption of enterprise cloud services Cloud adoption was already a growing trend in Africa for most of the last decade. Companies like banks that traditionally operated in-house servers and data storage facilities have increasingly switched to cloud services like AWS, Heroku and Microsoft Azure.But, until recently, many of these cloud services never had data servers in Africa. This had an impact on latency, which is the time it takes for data to be transferred. […]
