Investments in South African data centre to reach US$3bn by 2026

Investments in South African data centre to reach US$3bn by 2026

South Africa's data center market size will witness investments of USD 3071 million by 2026, growing at a CAGR of 15% said a report.

In 2020 the South Africa data center market investment was valued at USD 1316 million, according to a market research report by Reportlinker.com.

The report pointed out that the COVID-19 pandemic has been a strong market enabler for digital transformation initiatives across private as well as public sector enterprises in South Africa. The data center market in South Africa includes about 7 unique third-party data center service providers operating around 22 facilities.

In 2020, retail colocation dominated the market, accounting for over 80% of the market share. Africa Data Centres has announced plans to expand its CPT1 and JHB2 data center facilities to add over 24,000 square feet and 48,000 square feet of IT space, respectively.

Cloud adoption to grow up to 25% annually in South Africa and generate revenue up to USD 1.5 billion by 2024, the report noted. In 2020, Hybrid cloud services were gaining increased traction in South Africa. Hence, enterprises use private and public cloud environments to improve information sharing and manage the data efficiently.

The development of hyperscale and cloud data centers in the country will increase the demand for ethernet switches with higher ports such as 25 GbE to 100 GbE in the South Africa data centre market.

The use of smart security systems such as high-definition cameras and dual authentication access is likely to increase, security investments in data centers will grow significantly in South Africa.

Meanwhile, M&A activities will continue in South Africa, the report indicated. In 2020, Africa Data Centres acquired Standard Bank’s Samrand data center in Johannesburg.

Atos, Cisco Systems, Dell Technologies, Hewlett Packard Enterprise (HPE), Huawei Technologies, IBM, Juniper Networks, Lenovo, NetApp, and ZTE are the IT infrastructure providers in the South African data center market. Vendors such as IBM, Cisco, and Dell Technologies have a strong presence in the market.

In 2019, Microsoft opened its cloud region in Cape Town and Johannesburg, and in 2020 Amazon web Services (AWS) opened its cloud region in Cape Town. The increasing use of internet facilities is aiding the growth opportunities for the vendors across data center facilities in South Africa.

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