Market Trends of Africa Data Center Cooling Industry
Information Technology Industry to Witness Highest Growth
- Africa is emerging as a potential data center market. Africa Data Centers, a subsidiary of Liquid Telecom, has installed an additional floor to accommodate 160 racks at its facility in Nairobi, Kenya. The newly opened floor directly responds to the enormous demand for colocation and hosting services in Africa. This will enable further data center cooling equipment installations in the region.
- South Africa, Nigeria, and Egypt have approximately 89 million, 163 million, and 75.6 million smartphone connections in the region, respectively. Around 60% of users in Nigeria and 21% in South Africa use digital wallets such as M-Pesa to process transactions. Netflix, Disney+, and Amazon Prime are major OTT players in the region, with Netflix leading the African market subscriber base of around 6.4 million in 2022. These services are available in selected countries such as Nigeria, South Africa, Botswana, Kenya, Mauritius, Madagascar, Seychelles, Tanzania, Togo, Zimbabwe, and Zambia. Along with these developments, the growing number of data centers processing data has increased the demand for cooling equipment in the region.
- 5G service rolls out in 43 African countries, and improving bandwidth speeds will lead to higher data consumption. Along with these developments, the growing number of data centers processing data has increased the demand for cooling equipment in the region.
- Africans tend to prefer mobile services over broadband. For example, the percentage of people using broadband could increase from 19% in 2016 to 29% in 2020 and reach 51% by 2029. The transition from 4G to 5G and the introduction of more fiber optic cables will likely increase the demand for Tier 3 and Tier 4 data centers in the region. These data centers may need to accommodate the diverse digital services and IoT environments required to implement automation and development across the continent. These developments will increase the market demand in this region.
- The need for data localization is driving cloud aggregators to set up cloud data centers in the region. This confirms the growing demand and attractiveness of regional investment, driving the growth of sectors such as cloud. This will also accommodate the increased use of refrigeration equipment in the region.
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South Africa Accounts for the Largest Market Share
- The data consumption of various end-user industries in the South African market is gradually increasing. Increasing adoption of e-commerce, especially in e-commerce and retail, is one of the main drivers underpinning the growing demand for colocation services in the country, followed by fashion, sports, health, and beauty products. This equates to an increase in data center cooling equipment.
- The establishment of special economic zones (SEZs), free trade zones (FTZs), and investments in smart cities are boosting the South African data center construction industry. With the increase in the number of data centers, the use of cooling equipment is increasing in the country.
- Cloud usage, data localization, and new technologies such as 5G and IoT are rising. The increasing adoption of advanced IT infrastructure and the shift from on-premises to colocation and managed services are expected to drive investors to develop data center facilities in the country in the coming years. The increase in data centers corresponds to the increase in domestic cooling equipment usage.
- With the South African market favoring smartphones, data center capacity must expand to keep up with the growing data. Smartphones generate large amounts of data that require real-time processing and analysis. Data centers have to deal with huge amounts of data. Therefore, as smartphone users grow, the need for additional racks/servers in South African data centers will likely increase. This is in response to an increase in the number of data centers, which means increased demand for cooling equipment in the country.
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