Oracle opened a data centre in South Africa this week, joining the likes of Amazon Web Services and Microsoft in setting up capabilities in the country. Opened in Johannesburg on Wednesday, it is the first time that the US company has local resource to provide cloud services across the continent. Africa is the US company’s 37th “cloud region” — an area that allows customers to get faster access from a local data centre.
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Though Oracle has no plans for more data centres in Africa this year, more could come next year as the company explores areas such as West Africa, Cherian Varghese, regional MD for Middle East and Africa, said in an interview. As major corporations on the continent become more reliant on the cloud, the traditional suppliers like Oracle, Microsoft, Google and Amazon Web Services have targeted the continent for major growth. It is mostly driven by large African banks and telecommunications companies.
Fast connectivity provided by submarine communications cable and being Africa’s most developed economy have made South Africa a key location for cloud operators, with over 50 data centres in the country, mostly near Cape Town and Johannesburg. Of course, South Africa has its own challenges in order to supply the service. Electricity prices are growing by double digits every year and then there is the always-looming threat of loadshedding. Companies need to invest in backup power, which is a big additional cost of operations, of course.
Smaller cloud operators are also trying to grab a piece of the fast-expanding market for data localisation. US-based Digital Realty is buying a majority stake in data centre operator Teraco for R55-billion, while Vantage Data Centres has also announced plans to invest up to R15-billion to set up a data centre in South Africa.
