The State of the African Data Center Market - Investor Resolve Gets Tested, but the Opportunity to Enable Africa's Age of Cloud and AI Remains Compelling - ResearchAndMarkets.com

Barchart · 10/17 07:58

The "State of the African Data Center Market" report has been added to ResearchAndMarkets.com's offering.

This deep dive into the key market dynamics, economics and outlook of Africa's burgeoning commercial data center market. There are plenty of questions around the evolving African commercial model - what's going on with demand ramp-up? What are the hyperscalers doing outside of South Africa? What's going on with colocation pricing? Can African facilities support AI deployments?

From demand potential to power supply economics, this report explores them all - offering arguably the most extensive, publicly-available investor-focused research on this growing market.

Rarely has the burgeoning African data center market been as challenged as it has over the past two years. African data centers have had to grapple with perhaps the toughest macro-economic environment of the past decade. Data center capacity buildout lost momentum, against a challenging operating backdrop and persistent supply chain constraints.

Building what is essentially a new, capital-intensive, high tech infrastructure business in such a context is tough. And still, we find that the systemic fundamentals anchoring demand for data center capacity in Africa remain very much in play.

The region's digital foundation is deeper, with ~700m broadband connections. More submarine cables are coming onshore, data traffic growth remains explosive, and the region's network, content and cloud ecosystems continue to densify. Enterprise digital transformation is proceeding apace and cloud services are the fastest-growing segment in the ICT marketplace outside of mobile money. The region's demand potential remains considerable and is now boosted by the potential of gigantic requirements to support AI deployment.

There is much to build still. Africa accounts for only around 1% of global installed data center capacity, well short of the region's contribution to global GDP or population. As AI looms, the African market is primed for a rebound, with a construction spike that is set to surpass all previous buildout surges.

Country Analysis

  • South Africa: at the height of cloud, now building to support AI
  • Egypt: a supply-constrained market is now racing to catch up in the face of tough macro headwinds
  • Kenya: Africa's next hyperscaler destination gears up for accelerated growth
  • Nigeria: West Africa's largest economy races to catch up in the face of considerable macro-headwinds
  • Morocco: macro stability underpins solid upside potential, despite persistent constraints

Key Topics Covered:

EXECUTIVE SUMMARY

  • On the tough African macro context and the underlying drivers of demand for hosting capacity
  • On the scale of demand for commercial colocation in Africa
  • African capacity buildout lost momentum in 2022 and 2023; it is set to surge again
  • On the market's competitive structure and a strong growth outlook - with caveats
  • On the African power challenge and infrastructure readiness for AI

SECTION I: THE STATE OF THE AFRICAN DATA CENTER MARKET

  • Understanding the African data center context: macro headwinds and a journey through the age of cloud
  • African colo market drivers: denser cloud ecosystems, submarine cable build and enterprise digital transformation
  • Africa commercial data center construction: ready to rise again, after some lost momentum
  • Africa commercial data center supply: Ready for another surge
  • Sizing up demand for data center colocation:: from enterprise to hyperscalers

SECTION II: BREAKING DOWN THE COMMERCIAL DYNAMICS: MARKET CLUSTERS, CAPACITY PIPELINES AND REVENUE OUTLOOK

  • The African data center market: a cluster view
  • African market pipeline and forecast: building capacity for the age of cloud
  • Africa DC revenue outlook: on path to surpassing billion-dollar scale

SECTION III: THE AFRICAN COLO COMPETITIVE CONTEXT: GLOBAL GIANTS, PAN-AFRICAN PLAYS AND A NEW WAVE OF HYPERSCALE-FOCUSED COMPETITION

  • A highly eclectic competitive structure: but pan-African and global plays now lead the way
  • Key African data center provider profiles

SECTION IV: FROM READINESS FOR AI TO DEMAND RAMP-UP AND PRICING OUTLOOK, ADDRESSING THE KEY STRATEGIC QUESTIONS FACING AFRICAN DATA CENTERS

  • On power, sustainability and readiness for AI
  • On capacity absorption and colo pricing movements
  • On African data center CapEx and build cycles

SOUTH AFRICA: AT THE HEIGHT OF CLOUD, NOW BUILDING TO SUPPORT AI

  • Africa's largest and most mature economy - amid a tough macro operating context
  • Despite the tough macro, SA still has Africa's best mix of colo fundamentals
  • Africa's deepest demand potential: 500MW+ over the next decade, with some AI upside
  • South African commercial capacity growth is still on the upswing
  • Johannesburg and Cape Town - economic, connectivity and cloud hubs
  • Data center competition: an increasingly crowded, and specialist-dominated marketplace
  • South Africa commercial colo strategic mapping: a market with two distinct ends
  • South Africa pipeline: still building
  • South Africa's supply slated to double, mostly through new builds
  • Market economics: Strong demand is propelling the South African market to the billion-dollar mark

EGYPT: A SUPPLY-CONSTRAINED MARKET IS NOW RACING TO CATCH UP IN THE FACE OF TOUGH HEADWINDS

  • Egypt is Africa's second largest economy, and a crucial corridor for global trade
  • Egypt is the third largest data center market in Africa - and supply-constrained
  • Egypt commercial colo strategic mapping: a widening split between wholesale and retail
  • The Egyptian capacity build pipeline is ambitious
  • We are projecting Egypt's available supply to expand 5x - with some capacity to spare
  • The economics: prices under pressure, market size set to expand 4x

KENYA: AFRICA'S NEXT HYPERSCALER DESTINATION GEARS UP FOR ACCELERATED GROWTH

  • East Africa's largest economy is rebounding
  • Kenya has one of Africa's most attractive operating environments for commercial colocation
  • Moderate growth to date - but on the cusp of true ramp-up
  • Kenyan commercial supply has tripled over the past five years, despite a moderate build rate
  • Kenya commercial colo strategic mapping: a market slanting towards wholesale
  • Kenya's supply slated to grow 6x, mostly through greenfield builds
  • A strong outlook: excellent underlying fundamentals to propel market past the $100m mark

NIGERIA: WEST AFRICA'S LARGEST ECONOMY RACES TO CATCH UP

  • West Africa's largest economy, seeking a path to recovery
  • Nigeria has deep underlying potential for commercial colocation
  • Nigerian commercial supply has tripled over the past five years, despite a modest build rate
  • Nigeria commercial colo strategic mapping: gradually shifting towards wholesale and hyperscale
  • Nigeria is in the midst of a considerable build phase
  • Nigeria's supply is slated to grow 4x, with a balanced mix of expansions and new builds
  • A strong outlook: robust demand to propel market past the $150m mark

MOROCCO: MACRO STABILITY UNDERPINS SOLID UPSIDE POTENTIAL, DESPITE PERSISTENT CONSTRAINTS

  • A promising but constrained market at the intersection of four continents
  • A moderately attractive operating environment for commercial colocation
  • Morocco has a strong foundation for expanded adoption of data center services
  • Morocco commercial supply: flat growth, with moderate upside
  • Morocco colo strategic mapping: mostly retail and enterprise-focused, but wholesale is catching up
  • Morocco's outlook: long on potential, short on actual build
  • Morocco's supply slated to double, with a balanced mix of expansions and new builds

A SUMMARY VIEW OF THE NEXT COLO OPPORTUNITY

  • Angola
  • DRC
  • Ethiopia
  • Ivory Coast
  • Tanzania

For more information about this report visit https://www.researchandmarkets.com/r/egaq

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