There has been a significant increase in usage across Africa, with the number of users reaching around 645 million in 2023, 3. 5 times more than 2014 figures. The upward trend is expected to persist, with estimates suggesting that through 2029, the African continent will have an impressive online population exceeding 1. 1 billion connected Americans. This immediate growth, coupled with the COVID-19 pandemic accelerating the transition to cloud computing and remote work, has intensified the need for a physically powerful knowledge center infrastructure. As more businesses and Americans rely on virtual services, the demand for knowledge storage, processing, and transmission continues to skyrocket, driving the expansion of the African knowledge center market.
The expansion of knowledge hubs in Africa has immense potential, but it also comes with significant challenges. Many of today’s knowledge centers are concentrated in higher-traffic markets where the source exceeds the needs in the short term. These facilities, built to hyperscaler specifications to meet the needs of tech giants like Meta and Amazon, are prohibitively expensive and too complicated for local businesses and SMEs. The prices associated with such hyper-scalable knowledge hubs are too high for the vast majority of African companies, making them inaccessible and impractical. As a result, the largest knowledge media providers find themselves competing for a limited number of hyperscalers, making it difficult to generate revenue.
To overcome this challenge, a large number of local suppliers have emerged that provide a true fit between products and the local market with large knowledge centers and are now in a unique location to succeed. These local suppliers perceive the monetary constraints and express the wishes of companies and Africans. They can provide personalized answers at more affordable prices. By meeting the budgets and needs of local businesses and SMEs, those suppliers can tap into a much wider visitor base and achieve more sustainable expansion. In addition, strategic positioning within key knowledge corridors, which connect landlocked countries to undersea fiber cables and hosting Internet exchanges, presents a lucrative market opportunity for those local providers. Not only does this technique make knowledge hubs more available to African companies, but it also contributes to the virtual expansion and overall transformation of the continent.
One of the most demanding situations faced by African knowledge centers is the challenge of the intermittent source of force and the unreliable source of force. Many countries in Africa experience common power outages, which can adversely affect the functioning of knowledge hubs that rely on a consistent and robust source of power. .
To mitigate this issue, knowledge media providers are investing in backup power solutions, such as uninterruptible power supply (UPS) systems and diesel generators. However, those solutions can be expensive to operate and maintain, and they also contribute to carbon emissions. Emissions. Some knowledge media providers are exploring alternative energy sources, such as sun and wind, to reduce their reliance on the grid and their sustainability.
Another technique is to locate knowledge centers in spaces with more reliable electrical infrastructure, such as commercial spaces or near power generation facilities. This strategy can minimize the threat of power outages and ensure a more robust source of force for the knowledge center.
The expansion of the knowledge center market in Africa also depends on the availability and accessibility of high-speed web connectivity. Submarine cables play a role in connecting Africa to the global grid, and knowledge centers close to those cables can gain advantages in a faster and faster way. Reliable connectivity.
Lately there are several primary submarine cable systems connecting Africa to the rest of the world, adding the SEA-ME-WE 5, the Africa-to-Europe Coast (ACE) and the South Atlantic Cable System (SACS). along the African coast, such as Cape Town, Mombasa, and Djibouti, and supply high capacity to the continent.
Data center providers strategically place their facilities near those landing points to take advantage of available connectivity. For example, Wingu Africa with data centers in Djibouti is connected to SMW-3, EIG, EASSy, AAE-1, SEA-ME. -WE-5 and Aden-Djibouti and Liquid Intelligent Technologies have established a data center in Cape Town, which is located in the immediate vicinity of several submarine cable grounding stations, adding WACS, SAT-3/WASC and ACE cables.
In addition to submarine cables, the expansion of the data center market in Africa also depends on the availability of terrestrial fiber networks. These networks connect data centers to end users and enable the delivery of high-speed web and other virtual services.
The progression of fibre optic networks in Africa has been uneven, with some countries having more policies than others. However, there are several projects underway to expand fibre policy across the continent, such as the pan-African fibre network being built through Liquid Intelligent Technologies.
Data broker providers are also investing in their own fiber-optic networks to achieve connectivity and reduce their reliance on third-party providers. For example, Raxio’s 500-kilometer fiber optic network in Uganda, which connects its knowledge centers to key locations around the world. country.
The availability of fiber-optic networks (FTTx) is key to driving the adoption of virtual applications, such as e-commerce, video streaming, and remote work. As more people and businesses in Africa have access to the high-speed web via FTTx, the demand for knowledge centers is expected to increase.
However, the deployment of FTTx networks in Africa has been limited, and lately only a small percentage of the population has fiber connectivity. This is due to several factors, adding the higher burden of infrastructure development, regulatory barriers, and limited investment.
To meet this challenge, governments and private sector actors are investing in projects to expand FTTx policy across the continent and knowledge media providers are also partnering with FTTx providers to achieve connectivity and achieve a wider visitor base.
The factor of a reliable source of strength remains a persistent challenge for the African knowledge center market. Many knowledge centers still suffer from basic power source problems and are still heavily reliant on diesel turbines due to an unreliable grid. In response, knowledge center providers that prioritize renewables and sustainable strength responses are likely to generate pricing for their businesses faster and ultimately become more attractive in the medium term to investors and buyers.
Teraco specifically invests in green data centers powered by renewable energy and uses complex cooling technologies to reduce energy consumption. In 2021, Teraco raised $680 million in debt financing to fund what they claim are some of Africa’s largest and most environmentally friendly data centers, adding one hundred MW of capacity, adding a utility-scale renewable energy site. The move reflects the growing importance of sustainability in the knowledge industry and the need for operators to align their practices with global ESG standards, which are becoming a core requirement for many investors. and strategic industry players.
Other data center providers in Africa are also exploring cutting-edge solutions to address the energy challenge. For example, Africa Data Centres, part of Cassava Technologies, has announced plans to power its facilities with renewable energy, with the aim of achieving carbon neutrality through 2030.
The African market for knowledge hubs is populated by a wide diversity of players, from local start-ups to global tech giants. As the market has matured over the past three years, consolidation and foreign strategic interest have become more prevalent, with global participants such as Digital. Bridge and Equinix making their mark.
Equinix, the global leader in intermediate knowledge services, has established a strong presence in Africa, while Teraco, which it acquired mostly through Digital Bridge in 2022, continues to expand its footprint. Raxio Data Center, having raised as much as $170 million in debt and $46 million in equity funding in 2023, is another key player driving expansion in the region. Wingu Africa, subsidized through Africa Capitalworks, with knowledge centers built or under construction in Djibouti, Somaliland, Ethiopia and Tanzania, and IX Africa, subsidized through Helios. Investing partners are also making significant contributions to the development of the market.
The influx of more than $2 billion in investments for African knowledge center operators in 2021 underscores the immense prospects for expansion and investor confidence in this sector. This increase in investment is due to the popularity of the critical role knowledge centers play in virtual transformation, supporting economic expansion and selling innovation across the continent.
While Johannesburg, Cape Town, Lagos, and Nairobi currently have the highest cumulative MW capacity of leased data centers in Africa, a June 2023 451 Research report highlights that the fastest-growing market positions are Kinshasa, Luanda, Cairo, and Dar es Salaam, with 2022-25 CAGR of 233%, 64%, 48% and 45%, respectively. There is hardly any other position in which such sustained expansion is imaginable in a market position that is otherwise in full global maturity.
This highlights the expansion of the market across the continent, with prospects for significant expansion in regions underserved in the past. These emerging markets offer a unique opportunity for downstream knowledge operators to identify an early presence and capitalize on the developing demand for the virtual in those markets. The rise of edge computing, the adoption of 5G networks, and the growing importance of knowledge sovereignty will further drive demand for data center infrastructures located across Africa.
The African knowledge center market is in the midst of a remarkable expansion phase, presenting a wealth of opportunities for investors, generation companies and local businesses. As local and foreign players continue to invest in the progression of knowledge hubs across the continent, Africa is poised to become a major player in the global virtual economy.
The key to unlocking price in this market lies in addressing the unique and demanding situations and opportunities offered in Africa. Providers that offer extensive knowledge centers with real products and fit to the local market, prioritize renewable energy solutions and strategically position themselves in key knowledge corridors. Be well-positioned for success. As consolidation continues over the next three years, traders who are successful in their extension and relevance in the market will be more productive in capitalizing on the market’s potential of more than $7 billion.
By investing in the right actors, partnering with local businesses, and adopting sustainable practices, stakeholders can take advantage of the immense expansion prospects of this sector and play a critical role in shaping Africa’s virtual future. As the continent continues to embark on the virtual revolution, the African market for knowledge centers is poised to become a key driving force for economic expansion, innovation, and social progress.
Written via Divij Ruparelia, Chief Operating Officer, DAI Magister
Your email address will be published. Required fields are indicated *
Comment*
Name*
Email*
Website
Notify me of new items via email.
Δ
This is what Akismet uses to reduce spam. Find out how your observational knowledge is processed.