June 06, 2022
South Africa's data centre boom is good for the economy
The demand for cloud-computing and insight-driven business models has sparked massive investment in data centres in South Africa over the last few years. This growth in data centres is highly beneficial for the economy. Local data facilities enhance internet speeds and processing power for South African businesses. This improves competitiveness in the South African economy, with knock-on effects on the country’s presence in the global market.
There has been massive data centre investment in Africa, particularly in South Africa, and this trend is expected to continue. It is estimated that investment in African data facilities will grow by a further 15% in the next four years. With several data centres currently in development and plans for further investment in the pipeline, the African continent is going online at a rapid rate. This is a promising outlook for South African businesses because data centres underpin a future-ready digital economy.
Local data centres benefit the economy
State-of-the-art data centres are critical for enterprises, large tech companies and cloud providers. Hyperscale facilities offer cutting-edge computing capacity. They are able to process huge volumes of data. This level of processing power offers improved efficiency and digital success for South African organisations.
The demand for high-speed fibre connectivity is attracting investment into South Africa’s growing IT infrastructure. More data centres are needed to ensure the advancement of the digital economy in South Africa and the continent as a whole.
A growing digital economy
Local data centres offer faster speeds and lower latency, which boosts the accuracy of real-time analytics. Businesses can benefit from increased processing speeds and uninterrupted connectivity. For example, improved data centre infrastructure facilitates faster digital payments and an enhanced consumer journey, thereby generating more revenue.
Data centres play a vital role in digital transformation. They power industrial activity and manufacturing. Advanced robotics and intelligent systems need hyperscale providers that offer accelerated processing speeds. Economic resilience is linked to digital infrastructure, so South Africa’s data centre boom is a catalyst for innovation and economic growth.
Data centres underpin the digital economy
Data centres store, process and transfer information, so they are absolutely vital for information processing and cloud computing. As multi-tenant environments, large organisations can lower costs while enjoying the benefits of enterprise-grade infrastructure.
Instant back-ups and data recovery stabilise business operations. Data centres are an essential mechanism in the digital ecosystem. South Africa’s digital transformation services not only local businesses but also attracts foreign direct investment (FDI).
Data centre boom good for employment in South Africa
Data centres generate employment - from jobs requiring highly specialised technical skills to jobs in cleaning and security services. Looking at examples from abroad, Dutch data centres supplied 12 800 jobs in 2021 with an additional 4000 more jobs expected to be created by 2025. Google’s data centre in the U.S. has generated $1.3 billion in economic activity and 11 000 jobs.
The data centre boom creates jobs for several IT companies along the logistics chain. Different types of vacancies need to be filled in. For example, internet service providers (ISPs) need administrative staff, cloud providers need project managers and data engineers, fibre-optic providers need technicians to install fibre connections.
New data centre developments in SA
South Africa has the largest market for data centres on the African continent, with a host of new projects currently in development. The Vantage Data Centre in Gauteng has received the biggest investment for a project of this kind. Expected to be complete by the end of 2022, this project is supported by a R15-billion investment.
Gauteng has become a data centre hub due to its strategic location. Africa Data Centres announced plans to expand its capacity in Johannesburg, with plans to develop business focused data centres in Samrand and Midrand. Acronis, a cyber cloud data centre, has had its facilities up and running in Johannesburg since January 2022.
In the Western Cape, Teraco Data Environments has already completed the first phase of its CT2 facility - the largest data centre in the province. On the east coast of South Africa, the SEACOM data centre is well-positioned to service enterprises in the province and further afield.
Data centres and renewable energy
Given South Africa’s energy crisis, the success for new data centres development depends on access to renewable resources and sustainable practices. Cooling in data centres consumes a lot of energy, so new projects need to ensure energy efficiency and effective power usage.
Ideally, data centres should be able to generate their own energy sources so they are not dependent on the national electricity grid. Uninterrupted power is required for the smooth-running of data centres and needs to be of primary focus for data centre projects.
SA investment in IT infrastructure
Data is revolutionising business models and decision-making. The demand for faster computing power and an exponential increase in data traffic has triggered huge investment in local data centre developments. South Africa’s data centre boom alleviates the pressure on existing IT infrastructure, supporting the expansion of the digital economy.
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