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Data Centre Market in South Africa
Frost & Sullivan, Nov 2011, Pages: 110
Data centres are essential to modern organisations. The data loads worldwide are forever increasing, and that trend is set to continue. The uptake of data centre services is therefore forecast to be high over the next six years with the growing competition between service providers. This study provides an overview of data centre services in South Africa in the context of increasing service provision by providers and adoption by end users. Key industry challenges and drivers are discussed, and best practices and strategic recommendations are presented.
This Frost & Sullivan research service titled Data Centre Market in South Africa uncovers major market forces and trends, provides growth forecasts for different solution segments and key customer verticals and concludes with strategic recommendations for service providers/integrators wanting to capitalise on the opportunities presented. In this research, Frost & Sullivan's expert analysts thoroughly examine co-location, managed hosting and managed services across the financial services, government, ICT, media, retail, healthcare, mining, manufacturing, oil and gas and transport application industries.
Market Overview
Skills Shortages to Motivate Demand for Data Centre Services in South Africa
Data loads worldwide are constantly increasing, and this trend is set to persist. The uptake of data centre services, therefore, is forecast to be high during the next seven years, with intensifying competition between service providers.
“The lack of in-house capabilities is driving the demand for co-location and hosted services within the South African data centre market,” notes the analyst of this research. “Enterprises lack the in-house capability to meet changing business requirements such as on-demand bandwidth, storage facilities, near-100-per-cent system uptime, high-speed internet and network security.'
South Africa, generally, lacks skilled manpower that can manage and maintain advanced data centre technology. In addition, highly skilled personnel charge a premium for their services, with some of the manpower being imported from overseas. As a result, companies are using third-party providers to manage specific data centre activities.
High Real Estate and Energy Costs Create Concern
From real estate and construction to power and cooling, creating data centres requires significant investment. Data centre providers have to deal with the increasing cost of real estate and power usage, which proves to be a challenge for growth within the market. In 2010, property prices increased by 5 per cent. The power segment had also been impacted by electricity price hikes initiated by the South African energy and power company—Eskom. The company has implemented a strict pricing strategy in its bid to build new power stations. Consumers are expected to pay approximately 31 per cent per year over the next five years. “To combat the increasing costs of real-estate, service providers should consider building smart to accommodate what does happen instead of what might happen,” advises the analyst. “Service providers should also focus on energy management and efficiency, re-thinking their power utilisation efficiencies (PUE) strategies.”
Managing a data centre actively can result in approximately 40.0 per cent or more in improved energy savings, and, as such, paramount importance is placed on energy management. Organisations are going green, considering natural cooling, detailing energy management and centralising customers to reduce their loads. A typical data centre requires a PUE between 2.5 and 2.8. For every 1kW of power, the PUE (2.8) is multiplied by the rate charged by Eskom. Service providers, therefore, are focused on decreasing the PUE to 1.5, thereby passing cost savings to the customer. “Service providers should design data centres that can be built in stages so that it would have room to grow without paying for unnecessary space,” concludes the analyst. “In addition, instead of trying to project growth, it will be necessary to build to meet those projections ahead of time.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following services in this research:
- Co-location services
- Managed hosting services
- Managed services
By Application:
- Financial services
- Government
- ICT
- Media
- Retail
- Healthcare
- Mining
- Manufacturing
- Oil and Gas
- Transport
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