Market Trends of Africa Data Center Storage Industry
IT and Telecom to Hold Significant Share
- The rollout of 5G networks is expected to strengthen the nation's digital economy and increase the demand for high data center storage infrastructure. The arrival of 5G is expected to bring a major increase in speeds, low latencies, and an unforeseen level of network capabilities.
- Nigeria has one of the largest telecom markets in Africa, supported by the second-largest economy on the continent after South Africa. In February 2023, the Nigerian Communications Commission, the Nigerian telecom regulator, reported that the number of active mobile telecommunication plan subscriptions in the country reached about 222,571 million in December 2022, which shows the demand for mobile services in the country. Overall, the increasing network traffic is leading to major data center investments and the adoption of DC storage.
- According to NCC (Nigerian Communications Commission), as of June 2022, Nigeria's broadband penetration was 44.30%, with more than 84 million subscriptions, compared to about 76 million in 2021 and 78 million in 2020.
- The rapidly increasing 4G penetration and the upcoming 5G wave are encouraging telecom vendors to invest in South African data centers. In October 2022, the South African telecom provider Telkom established the 5G high-speed internet network with the help of Huawei Technologies from China. Huawei continues to assist South Africa in developing its 5G networks. The prominent 5G network on the African continent has more than 2,800 base stations deployed.
- Owing to such factors, the demand for data centers from the telecom segment is constantly rising, mirrored by a rapid rise in data center storage. The manufacturers of data centers are developing cutting-edge, affordable solutions that are scalable and secure to fulfill the rising demand from the telecom industries.
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South Africa to Witness Significant Growth
- The market studied in South Africa is led by large, innovative enterprises, such as financial institutions. Financial services are diversifying their market offerings, and this requires an infrastructure that provides resiliency, low latency, and consistent performance.
- Players like Pure Storage are widening their focus in the local market of South Africa. The resource investment is being made to expand reach across multiple market segments. In the price-sensitive South African market, the value and long-term sustainable models are important, as they provide a competitive edge to their clients.
- All-flash arrays are evidently revolutionizing the data center storage market, offering cloud-like application consolidation and enhanced agility. As enterprises create more and more data and increasingly turn to cloud technology, the data center storage market in South Africa is expected to expand.
- Chinese tech giants Huawei and Alibaba are also focusing on increasing their market shares in South Africa with aggressive strategies. Huawei set an ambitious goal of capturing at least 15% of the market by the end of 2023, offering a comprehensive "everything-as-a-service" package to attract customers. Alibaba has taken a similar approach, partnering with BCX in late 2022 and focusing on software-as-a-service (SaaS) solutions to expand its cloud presence in the country.
- Despite recent investments in data center infrastructure in Sub-Saharan Africa, much of the continent’s capacity remains in South Africa, where local providers brought more than 50 MW of dedicated data center IT load capacity online between 2017 and 2019. With increasing data center investment, the market for data center storage is expected to grow significantly.
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