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African Data Centers the Hottest Growth Area in the African ICT Market, says Xalam Analytics

The African data center colocation market is arguably the hottest growth area in the African ICT market, according to a new report by research and analytics firm Xalam Analytics.

The report, titled “African Data Center Boom” notes that African data center market growth has reached an inflection point. “More multi-tenant data center facilities will be built across Africa over the next two years than were established over the past three combined. Data center colocation space, power, and revenue are all set to double over the next five years.”

This, the report says, reflects the vital role played by data center facilities as Africa enters the fourth industrial revolution. “Data centers are critical infrastructure for African digital transformation, nearly as much as mobile data or fibre connectivity” notes Guy Zibi, Xalam Principal Analyst and one of the authors of the report. “The supercharged growth we are starting to see is a testimony to their increasing importance.”
The report highlights several key trends driving the expansion of the African data center market. “Broadband adoption is booming; more African enterprises are adopting cloud and colocation services. Global content delivery networks are integrating Africa into their global networks”, the report notes. “And consistent with global trends, network intelligence is increasingly moving to the edge, closer to where the data is being created. This works for Africa too.”

Another core trend, the report notes, is the arrival of hyperscale public cloud providers on the African shores. Over the past twelve months, Microsoft, Amazon Web Services and Huawei have all announced plans to offer public cloud services from data centers located in Africa. “The arrival of hyperscale cloud providers is a game changer for African cloud and data center markets”, says Zibi. “They are transforming the market’s traditional competitive structure, business models, and the very nature of Africa’s data center facilities”.

Xalam Analytics stresses that challenges remain, from inadequate power infrastructure in some markets to the high cost of terrestrial fibre connectivity in others. But this hurdle will not stop the market from developing, the report notes. “We are projecting data center colocation revenue to grow faster over the next three years than it has over the past three, with an annual growth rate in the 20%-25% range”, the authors note. “At a time when growth is sputtering in several market segments, this makes colocation arguably the hottest growth area in the African ICT market”.

About Xalam Analytics

Xalam Analytics is a research and analytics firm focused on digital services and infrastructure markets in frontier economies. Xalam Analytics combines local market insights, global industry expertise, and cloud-based BI analytics to offer in-depth BI tools and analysis of connectivity, hosting/cloud and IOT markets in Africa and the Middle East in particular.

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