Market Trends of South Africa Data Center Storage Industry
IT and Telecom to Hold Significant Share
- The rollout of 5G networks is expected to strengthen the digital economy in South Africa and increase the demand for high data center storage infrastructure. 5G's arrival promises a major increase in speeds, low latency, and unforeseen network capabilities, paving the way for groundbreaking applications with real-time connectivity across everything.
- The rapidly increasing 4G penetration and the upcoming 5G wave are forcing telecom vendors to invest in the South African data center market. 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.
- In September 2022, the US Department of Commerce's Market Development Cooperator Program (MDCP), run by the International Trade Administration, awarded the Wireless Infrastructure Association (WIA) a grant for its proposed Roadmap to 5G Success initiative. This project aims to accelerate the deployment of 5G in South Africa and boost business for US-based enterprises. South Africa has 109 million active mobile connections.
- 5G is close to seven times better in terms of throughput compared to 4G, at 10 Gbs compared to 1.45 Gbs. With NVMe or SSD over HDD, such enterprise-level technology allows significant I/O throughput. The demand for NVMe is increasing in SSD servers and storage appliances, which is expected to drive the market during the forecast period.
Understand The Key Trends Shaping This Market
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All-Flash Storage to Witness Significant Growth
- All-flash arrays are evidently revolutionizing data center storage, offering cloud-like application consolidation and enhanced agility. The growth in data generated by enterprises and the adoption of cloud technology are expected to drive the market.
- Chinese cloud providers Huawei and Alibaba see South Africa as a key market. Huawei has taken an aggressive strategy, setting a target of achieving 15% market share by the end of 2023. Huawei is looking to increase its market share by providing "everything as a service" (XaaS) solutions to expand its reach. Similarly, in Q3 2022, Alibaba partnered with BCX to increase its cloud solutions by employing similar strategies, focusing on SaaS services.
- With big data and analytics, the data access and processing patterns demand a higher storage performance, along with increased concurrency. The AI industry is growing across Africa, with over 2400 companies specializing in AI, 41% of which are startups. The greater penetration is in South Africa.
- Furthermore, the lagging storage performance slowed response times on key member-facing applications, and legacy storage became complex to manage and difficult to expand. After the deployment of all-flash arrays, customer-facing applications saw a 70% improvement in response times. Storage-related capital and operating costs were reduced by over 50%. Downtime and disaster recovery risk (DRR) for SQL servers and private cloud workloads were eliminated. Physical space requirements for storage were slashed from 40 to 7 rack units. These advantages of all-flash storage cater to the major market growth expected during the forecast period.
