The data centre market in Nigeria, Ghana and Senegal is still in the nascent stage, with only a handful of market participants.
Unlike South Africa, there are no international vendors rendering data centre services to businesses in these three countries. The market is mainly dominated by mobile and fixed line operators.
Telcos and mobile operators are witnessing intense competition, putting pressure on their profit margins and hampering growth prospects.
New analysis from Frost & Sullivan – West African Data Centre Market – finds that the market earned revenues of $29,6-million in 2012 and estimates this to reach $67,5-million in 2017.
The research covers co-location, Web hosting, hosted security, application hosting and other (such as disaster recovery and business continuity, virtual desktop and virtual servers) segments in Nigeria, Ghana and Senegal. Co-location and Web and application hosting services are the most prevalent data centre services in the region.
The data centre market in West Africa has witnessed significant growth in the past two years due to the availability of bandwidth. This, in turn, has been driven mainly by infrastructural developments in the form of undersea cables and terrestrial backbones.
“Affordable bandwidth costs have made it feasible for service providers in West Africa> to offer data centre services locally,” notes Frost & Sullivan’s ICT research analyst Mervin Miemoukanda.
“Telcos such as MTN and Vodafone have been driving the uptake of data centre services in the region, through the establishment of commercial data centre facilities, and are occupying market share leadership positions due to their extensive network infrastructure.”
With the advent of virtualisation and cloud-based services, more and more companies have been requiring these services in the region. Another important element is the adoption of disaster recovery and continuity services by financial and banking institutions in Nigeria, Ghana and Senegal.
Telcos have emerged as strong contenders to Internet service providers (ISPs) and systems integrators. However, due to the lack of IT expertise, their offerings in the data centre market have often been limited to basic co-location and Web hosting services.
This challenge is already restricting their ability to offer end-to-end data centre services that would ensure their long-term competitiveness.
“Telcos could address these technical shortcomings through the acquisition of local IT participants, strategic partnerships with domestic and international vendors and systems integrators or by building competencies internally,” advises Miemoukanda.
“It is therefore imperative, and timely, for operators to start pursuing these various options, particularly as frontier technologies, such as cloud and virtualisation, are already coming to the fore in West Africa.”