Japanese firm eyes African market with containerised data centres

^{Photo credit: IIJ}

A containerised modular data centre solution, developed by ICT firm Internet Initiative Japan (IIJ), has been selected for a market feasibility study in Kenya. This initiative is part of the Japan Ministry of Economy, Trade and Industry’s AfDX programme, which supports Japanese companies to verify business models in Africa.

IIJ’s containerised modular data centre, known as co-IZmo/I, offers the same functionality and robustness as conventional data centres, including cooling systems, electrical equipment, and security systems. Yet, it can be transported in the same manner as cargo shipping containers. These data centres can also be set up quickly and easily expanded as needed.

Kenya was selected for the feasibility study due to its current data centre capacity not keeping pace with increasing demand, notably from internet service providers and content companies. While the appetite for digital services in Kenya is significant, many of them depend on cloud platforms hosted in data centres outside the country. In 2019, Kenya became one of the first African countries to enact data protection laws, placing limitations on the cross-border movement of personal and strategic data. 

Africa is seeing a surge in data consumption, driven by its growing young and digitally savvy population. Mobile data usage on the continent is expected to increase by 40% each year until 2025, a rate twice the global average. Meanwhile, both private enterprises and government agencies are quickly adopting cloud and digital technologies. Data centres are the infrastructural backbone of cloud services. As internet usage grows, issues such as overloaded international networks, data transmission delays, and the escalating costs are becoming apparent.

There has been a notable growth in Africa-based co-location data centres. These facilities typically lease space to a variety of clients, such as banks and mobile phone companies. Data centre capacity on the continent is believed to have doubled from 2016 to 2021, reaching approximately 250MW. Regulatory changes play a role in this growth. Like Kenya, many African countries are either introducing or considering data-protection laws that mandate the storage of specific data, such as personal details, within their borders.

Prominent co-location data centre companies include Africa Data Centres and PAIX, with a presence in countries such as South Africa, Kenya, and Nigeria; while Raxio has ventured into frontier markets like Angola, the Democratic Republic of Congo, and Mozambique. Beyond co-location operators, tech giants Microsoft and Amazon are introducing their cloud services to the region and have established their own data centres in South Africa. Additionally, Huawei collaborated with the Senegalese government to construct a data centre.

The industry has also attracted interest from investors. Last year, US-based firm Digital Realty acquired Teraco, which runs multiple data centres in South Africa. This acquisition was subsequent to Digital Realty's purchase of iColo, a Kenyan data centre platform with a presence in Nairobi and Mombasa. Private equity firm Helios Investment Partners recently also acquired stakes in Maroc Datacenter in Morocco and IXAfrica in Kenya. Similarly, African Infrastructure Investment Managers invested in the Onix Accra 1 data centre in Ghana and N+One Data Centres, which is active in Morocco and Senegal.

 

References

‘Data centres are taking root in Africa’, The Economist, 04 December 2021

‘Helios announces pivotal multi-country African data centre investments and hire of distinguished industry expert’, Helios Investment Partners, 16 November 2022

‘Africa's data centre growth opportunity’, IJ Global, 06 March 2023

‘Teraco announces completion of acquisition by Digital Realty’, Teraco, 01 August 2022

‘IIJ study on containerized data center introduction in Kenya selected as a Ministry of Economy, Trade and Industry feasibility study project’, IIJ, 28 August 2023

‘Feasibility study project on emerging business opportunities in African market (AfDX)’, Ministry of Economy, Trade and Industry, Accessed 23 September 2023

‘co-IZmo/I’, IIJ, Accessed 23 September 2023