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Data Center Market in Africa - Industry Outlook and Forecast 2021-2026

PUBLISHED DATE 15 Apr 2021
PAGES 279
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THE AFRICAN DATA CENTER MARKET SIZE TO WAS VALUED AT USD 2 BILLION in 2020 AND IS EXPECTED TO REACH USD 5 BILLION BY 2026, GROWING AT A CAGR OF 15% DURING THE FORECAST PERIOD

Africa Data Center Market Size, Share, Trends Analysis Report by IT Infrastructure (Servers, Storage, and Network); Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructures); Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Dry Coolers, & Condensers, and Other Cooling Units), Racks, and Other Mechanical Infrastructure); Cooling Technique (Air-based Cooling and Liquid-based Cooling); General Construction (Core and Shell Development, Installation and Commissioning Services, Engineering and Building Designs, Physical Security, and DCIM/BMS); Tier Standards (Tier I & II, Tier III, and Tier IV); and Geography (Africa); Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast 2021–2026

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Most Exhaustive Report

279 Pages

35 Tables

83 Charts

1 Regions

6 Countries

41 Companies

6 Market Segment

AFRICA DATA CENTER MARKET REPORT SCOPE

Report Attribute Details
MARKET SIZE (INVESTMENT) USD 5 BILLION (2026)
Market Size (Area) 0.67 Million Sq.Ft (2026)
CAGR 15% (2021–2026)
Base Year 2020
Forecast Year 2021–2026
Countries Covered South Africa, Morocco, Kenya, Nigeria, Egypt, and Other Countries
Geographic Analysis Africa

AFRICA DATA CENTER INDUSTRY INSIGHTS

The Africa data center market size by investment was valued at USD 2 billion in 2020 and is expected to USD 5 billion by 2026, growing at a CAGR of 15% during 2021-2026. The data center market expects to observe growth because of the flurry of factors – renewable power availability, smart city initiatives, and increased support for the digital economy. Egypt, South Africa, Kenya, Morocco, and Ethiopia are actively working toward improving the share of renewable energy in the region's electricity generation. Africa is an emerging leader in microgrid capacity. Grid-connected, on-site energy generation or storage plants help data centers control power costs more efficiently by saving on peak demand costs charged by traditional grid facilities. Both colocation and enterprise operators invest heavily in adopting renewable energy sources to power data centers.

South Africa, Kenya, Morocco, and Nigeria have started developing smart city initiatives. In South Africa, multiple smart cities have recently been announced. The Lanseria Smart City will build near the Lanseria International Airport, Johannesburg, and will take around 25 years to complete. The city will have rainwater harvesting and will be powered via solar energy sources to reduce carbon emissions. The development of smart cities will enable high data generation, increasing the demand for data storage capabilities. These factors are likely to increase the demand for data centers in Africa.

SNIPPETS

  • The adoption of all-flash storage systems along with hyper-converged & converged infrastructure expects to grow in the market.
  • The Africa data center market is likely to observe investments during the forecast period due to increased fiber cable connectivity and internet penetration.
  • UPS systems with lithium-ion batteries are likely to witness growth as several operators equip data centers with efficient power solutions.
  • Datacenter operators are likely to invest in automation, monitoring, and management solutions for real-time control over support infrastructure operations.
  • DCIM/BMS solutions expect to experience growth because of the growing popularity of smart infrastructure monitoring solutions among service operators.
  • The adoption of renewable energy solutions is likely to witness growth as the region has rich solar power and wind energy resources.
  • Tax incentives are major growth contributors to the data center development in the region.

AFRICA DATA CENTER MARKET SEGMENTATION

This research report includes a detailed segmentation by:

  • IT Infrastructure 
  • Electrical Infrastructure 
  • Mechanical Infrastructure
  • Cooling Technique   
  • Cooling Systems
  • General Construction    
  • Tier Standards 
  • Geography 

INSIGHTS BY IT INFRASTRUCTURE

The Africa IT infrastructure market expects to reach approx. USD 4 billion by 2026. The growth in data generation in Africa is fueling the demand for fast-processing efficient servers. The demand for build-to-suit infrastructure is growing to support specific applications. Several segments such as BFSI, healthcare, transportation and logistics, education, and heavy industries adopt advanced server systems for efficient services.

The Africa storage infrastructure market is likely to grow at a CAGR of approx. 16% during 2020–2026. In terms of storage infrastructure, the market has been witnessing the high adoption of ALL Flash storage systems. The demand for storage systems is growing with increased data traffic and growth in data center constructions. The network infrastructure market in Africa has witnessed several advances in recent years. The growing internet penetration leads to the demand for advanced network infrastructure such as 10 GBE switch configurations on the top of the rack, with switches of high-capacity being deployed in aggregation and core layers.

INSIGHTS BY ELECTRICAL INFRASTRUCTURE

The unreliable power grid connectivity increases the demand for power backup sources. UPS and generator systems are expected to grow due to the increased construction of large and mega data center facilities. The Kenya data center market has witnessed the installation of energy-efficient power infrastructure. Most facilities are of Tier III standards and are adopting power redundancy of N+1 or 2N to manage power grid instability. Colocation service providers are likely to emerge as contributors to the lithium-ion UPS solutions market. Vendors are continuously offering innovative UPS solutions to boost efficiency and reduce cost. The construction of extensive facilities across Africa is likely to boost the generators market. The growing complexity of data center infrastructure is driving the demand for automated switchgear technology. Medium- and high-voltage switchgear are more likely to be adopted than low-voltage switchgear. The demand for intelligent PDUs among colocation end-users is growing as there is an increasing need to meter and monitor rack power consumption.

INSIGHTS BY MECHANICAL INFRASTRUCTURE

Data center facilities operating in the African region mainly adopt chillers and precision air cooling. The adoption of air-based cooling (free cooling chillers) is likely to gain traction as certain African countries experience cold winter seasons. South Africa is likely to adopt free cooling chillers or evaporative coolers. The cooling systems market depends on the construction of mega and hyperscale facilities, primarily of 10 MW capacity. While several smaller facilities in Africa use DX-based CRAC units, medium and large data centers are installing CRAH units. Also, the implementation of air-cooled CRAC systems with cooling units that use refrigerants or glycol-based cooling is expected to grow during the forecast period. Data centers in Morocco have witnessed the adoption of precision cooling systems, chilled water-cooling systems, and free air-cooling systems.

INSIGHTS BY GENERAL CONSTRUCTION

Most colocation facilities are funded by enterprise and government agencies; however, the actual investment in greenfield projects is low. Government initiatives to offer tax incentives expect to fuel general construction services during the forecast period. However, the shortage of skilled workforce construction and operational benefits is the major reason organizations select modular providers to perform installation and operation services. The increasing OPEX is likely to boost the implementation of DCIM solutions. The rapid growth in colocation data centers will drive investments in physical security systems in the African market. In South Africa, most colocation facilities have installed physical security solutions, ranging from perimeters to racks guarded via CCTV cameras and biometric systems. Companies have also adopted DCIM solutions that enable remote monitoring of data center operations. Data center operators in Kenya use several security systems such as biometric access systems, perimeter fencing, and CCTV surveillance solutions.

INSIGHTS BY TIER STANDARDS

In 2020, the Africa data center market witnessed Tier III facilities' dominance, especially for colocation services. 10 out of the 11 tier III facilities developed were colocation data centers in 2020. The trend expects to continue during the forecast period, with several operators expecting to shift to Tier IV facilities due to the growth in rack power densities and increase in critical data center applications during the forecast period. Most new facilities are designed to be of Tier III standards with a minimum of N+1 redundancy. They can be reconfigured with up to 2N+2 redundancy with the incorporation of flexible data center designs. Most facilities in Kenya are built according to Tier III standards with standard redundancy of N+1 or N+N for support infrastructure, including cooling systems. Similarly, facilities in South Africa are designed to be tier III standards, which are flexible to be converted into Tier IV facilities. 

INSIGHTS BY GEOGRAPHY

The South Africa data center market share is witnessing an increased adoption of cloud-based solutions among enterprises and is rapidly emerging as a center for public and private cloud hosting. Cape Town and Johannesburg are the significant locations preferred for data center development. Manufacturing, financial services, and healthcare sectors are among the major contributors to the data center investment. The South Africa data center market is increasingly adopting cloud technology. Submarine cable connectivity is playing a critical role in the development of the South African data center market. Also, investments in submarine cable connectivity projects connecting South Africa with Asia have increased in recent years. The market expects to witness steady growth over the next few years because of the high internet penetration and growth of big data, IoT, and artificial intelligence technology.

INSIGHTS BY VENDORS

The Africa data center market consists of several IT, electrical, and mechanical service providers. Arista Networks, Broadcom, Cisco Systems, Dell Technologies, Hewlett Packard Enterprise, Huawei Technologies are a few major IT infrastructure providers in Africa. The revenue share of server infrastructure declined slightly in Q1 2020 than Q4 2019 due to the eruption of the COVID-19 pandemic, causing disruptions in the supply chain. The procurement of energy-efficient power infrastructure solutions is likely to drive several vendors to the African region. Varied requirements are prompting vendors to develop innovative products that reduce OPEX. ABB, Eaton, Legrand, Schneider Electric, and Vertiv Group are the leading UPS and rack PDU infrastructure players. Cummins and Caterpillar have a strong presence in the market.

The Africa data center market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

By IT Infrastructure 

  • Servers
  • Storage
  • Network

By Electrical Infrastructure 

  • UPS Systems
  • Generators
  • Transfer Switches and Switchgears
  • PDUs
  • Other Electrical Infrastructures

By Mechanical Infrastructure

  • Cooling Systems
    • CRAC & CRAH Units
    • Chiller Units
    • Cooling Towers, Dry Coolers, & Condensers
    • Other Cooling Units
  • Racks
  • Others Mechanical Infrastructure

By Cooling Technique    

  • Air-based Cooling Technique
  • Liquid-based Cooling Technique

By General Construction    

  • Core and Shell Development
  • Installation and Commissioning Services
  • Engineering and Building Designs
  • Physical Security
  • DCIM/BMS

By Tier Standards 

  • Tier I & II
  • Tier III
  • Tier IV

By Geography

  • Africa
    • South Africa
    • Morocco
    • Kenya
    • Nigeria 
    • Egypt
    • Other Countries

Frequently Asked Questions

The Africa data center market by investment is likely to reach approx. USD 5 billion by 2026, growing at a CAGR of approx. 15% during the forecast period.
Africa witnessed the development of 11 tier III standard data centers, out of which 10 were colocation projects.
The Africa racks market expects to over USD 26 million by the end of 2021
The Nigeria data center market is likely to grow at a CAGR of over 21% during the period 2020–2026.
The Africa data center market consists of several IT, electrical, and mechanical service providers. Arista Networks, Broadcom, Cisco Systems, Dell Technologies, Hewlett Packard Enterprise, Huawei Technologies are a few major IT infrastructure providers in Africa.
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