Connection Telecom, South Africa’s leading cloud-based PBX provider, owes much of its success and customer value to a hosting arrangement with Teraco, Africa’s largest and only vendor neutral data centre provider.
MD Dave Meintjes says when the company had to choose a data centre for its cloud services, Teraco’s world-class Johannesburg and Cape Town facilities were a no-brainer.
Teraco currently has over 6500 m² of floor space across its Johannesburg, Durban and Cape Town facilities, with an additional 5000 m² due for completion in late 2016. Its data centres offer resilient power, dual fibre routes and multiple carrier redundancy, as well as the option of disaster recovery data replication between sites.
“But what really attracted us was their pioneering use of the vendor-neutral data centre model,” says Meintjes.
Vendor neutrality is the next wave in data centre innovation. Global cloud traffic is expected to grow 4.5-fold (a 35% combined annual growth rate) by 2017, according to Cisco’s Global Cloud Index*. This corresponds to the 45% CAGR growth seen in the cloud based PBX market.
The only way to accomplish this is to have a vendor- and network-neutral data centre, where all service providers and carriers can meet at a high-capacity peering point and where applications and services can be hosted. Carrier-neutral data centres provide multiple benefits, including better reliability, redundancy, flexibility and a lower total cost of ownership.
In terms of this business model, hosts forego ownership of networking infrastructure such as switches and don’t offer networked services of their own; instead limiting themselves to providing a resilient, open connectivity platform for a broad base of network and service providers.
Teraco CEO Lex van Wyk says the company’s neutrality has attracted over 100 local and international telcos, ISPs and solution providers that currently do business in South Africa and sub-Saharan Africa.
“Any communication coming into Teraco on any carrier network has direct access to all carriers in the country in one place. With myriad interconnects in place here, you can reach any person or entity with connectivity into their office or house. This is ideal – for resilient, quality communications cloud-based providers cannot rely on too many interconnects between different data centres.”
Outside technical considerations, one can see the business attraction for telcos and service providers of co-locating within a data centre that won’t compete with them. “If we decide to move on, we won’t have to extricate our entire business from their infrastructure. We can simply up and leave with our servers,” says Meintjes.
“The knock-on effect of this level of choice is that we are free from the legacy pricing of days gone by. Where the infrastructure is not linked to the host, prices are truly dictated by supply and demand of network capacity, not by artificial scarcity.”
But the real benefit is to the networks’ customers. “The providers taking up tenancy in a neutral data centre can offer their customers the same choice,” Meintjes continues.
“We embrace that model. Our customers want freedom of choice and independence of the infrastructure supplier to avoid a king’s ransom being charged for it. They want to know that they can move on if the business requirements change or contract periods end. Being at Teraco creates that freedom, the confidence of a sustainable business relationship must lie with the service offering and as such we offer our customers short-term contracts; they can leave with 3 month’s notice if they wish.”
Free to stay
Ironically, this means neither Connection Telecom nor its customers will easily move away from their providers.
“Where else can you escape the legacy pricing models that come with being held captive to someone else’s infrastructure?” asks Meintjes. “Within an open access model you can liberate yourself – either work with the network provider of your choice or aggregate a selection of network providers. In a legacy environment you’ll be charged out-of-band prices for using someone else’s network.”
Aggregating all carriers in one data centre brings down the price of communications further for Connection Telecom’s clients, providing multiple choices and keeping prices in check.
“Then there are the quality and business continuity implications of carrier redundancy,” says Meintjes.
Cloud businesses and independent data centres are the perfect pairing for all parties – host, providers and customer, the parties agree.
It is a marketplace akin to a shopping centre that offers host and tenants symbiotic service opportunities – for example, whereas Teraco provides the hosting, Connection Telecom provides the telephony. Other service providers can engage in similarly symbiotic relationships where applicable.
This in turn attracts more service providers looking for symbiotic business opportunities, benefiting end customers with sheer economies of scale.
“If we can provide Business Communication to all Teraco tenants, it means the Connection Telecom free call community grows in one fell swoop, increasing the portion of our customers’ zero-rated calls,” says Meintjes. “That is ultimately the beauty of cloud and open access.”