Harnessing Africa’s first hyperscale data centres: What it means for SA Business

By 3rd Apr 2019 Blog

Earlier this month, Microsoft officially launched two Azure data centres in the country, one in Johannesburg and one in Cape Town. This will fundamentally change the Cloud landscape in South Africa, and indeed, the telecoms landscape.

To the uninitiated, Azure is the Microsoft Cloud computing platform. Launched in 2010, it is designed for the development, deployment, and management of applications and services through Microsoft-managed data centres.

At the time, many industry onlookers were sceptical about how Microsoft would be able to compete with more established companies (think Amazon Web Services and Google) in the segment. However, in its fourth quarter results of last year, Microsoft reported that revenue in server products and Cloud services increased 23%, driven by Azure revenue growth of 89%. And while Amazon might still be the leader of the pack, the Microsoft market growth rate was nearly double the growth rate of its more established rival.

Access speed

Clearly, Microsoft has momentum in its favour. But the question many local organisations are asking (and particularly those still undecided about migrating to the Cloud), is ‘what is the true significance of having Microsoft data centres in South Africa?’ Does it make such a difference? The short answer revolves around two factors: speed and compliance.

Previously, companies that opted to go for multinational Cloud offerings had to rely on their data being stored on European or American servers. Even related [Cloud] services had to be accessed from servers distributed around the world. With fibre and 4G technologies becoming commonplace in organisations, this might not seem like a problem.

But the reality is that poor latency (the amount of time it takes to send or receive data over the internet) is still a significant challenge for many local businesses. When stakeholders expect virtually real-time response times, the difference between 20 milliseconds and 150 milliseconds could result in either a happy customer or one looking at moving to a competitor.

The presence of local Azure data centres will change that.

Accessing apps and data on these servers will align local organisations to service levels that companies in more developed countries have come to expect as standard practice. In turn, these faster speeds (accessing data, using apps, delivering services) will stimulate increased innovation as organisations can focus more on strategic deliverables and less on peripheral IT considerations.

Data compliance

With the Protection of Personal Information Act (PoPI) in South Africa and the General Data Protection Regulation (GDPR) in Europe focused on how personal data is stored, accessed, and analysed, companies face severe financial fines if they are not compliant.

 

A big part of these regulations revolves around data residency (or data sovereignty), i.e. the physical location where data is stored. Some South African businesses and government departments are under pressure to ensure that the data they store stays within the borders of the country. This previously ruled out most Cloud platforms and put the focus more on ticking compliance boxes than delivering value-added applications and services.

Having Azure data centres in South Africa addresses this as all data is stored within the confines of the country. No more worrying about what happens to offsite data on international servers. As with improved latency, this addresses a stumbling block to Cloud adoption and growth.

Given how the worldwide public Cloud services market is expected to grow to more than $200 billion this year (and 90% of companies will be using the public Cloud by 2022), local companies would do well to capitalise on the foundation that the new Azure data centres will provide.

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