The article states that "collocation in African Data Centers costing more than double the cost in the US and Europe."
So the issue is not that "more data centers are needed urgently" but rather than the question of why the price situation is the way it is.
The main expenses of a data center (just colocation, not renting VMs) are the capital costs of building/renting the facility (including digging some land to pull fiber etc) and paying staff. It's not obvious to me why in Africa these costs would be higher than in Europe, but apparently there's some reason.
I don't see reliable power as a big differentiator since even in the first world your data center anyway needs backup generators; it's just that they would get used much more often.
I don't see expensive bandwidth as a big differentiator since (as far as I understand) the big bottleneck is the undersea cables, and hosting your data on the "wrong side" of these cables should be more expensive - ISPs (at least elsewhere) prefer to cache/re-host/CDN popular data locally as some extra servers in ISPs datacenter turn out to be cheaper than hardware needed for all the extra traffic.
Poor countries have less capital. Thus the cost of money is high. For example in Uganda a bank loan costs 20% interest. At such rates only the most effective investments are viable.
Many countries in Africa have such large room for improvement through investment. Data centers are not the biggest need. For example in Uganda they grow avocado's, but lack the cold chain distribution network to sell into the international market.
Thus you have avocado's selling for peanuts at local markets instead of earning big money selling to the west.
Building up a nation's capital stock takes time and long term stability. Thankfully Africa has the stability but time is slow.
Logistics infrastructure is one major cost factor. To get a data center up and running requires moving large quantities of heavy, high-value, and relatively fragile equipment through ocean ports and over roads and/or railroads. In regions of the world with less quality infrastructure, it's significantly more expensive to transport that stuff.
>It's not obvious to me why in Africa these costs would be higher than in Europe, but apparently there's some reason.
Physical security and security of investment (via security of government, infrastructure, judicial systems, pipeline of educated and skilled workers) is worth a lot.
Power. Reliable power is hard to come by and is more expensive. Power availability and cost is a significant factor in data center location in the states.
I don't see reliable power as a big differentiator since even in the first world your data center anyway needs backup generators; it's just that they would get used much more often.
#2 and #3 are lower for a generator you run 8 hours a year versus 800 hours a year. And you may want added redundancy for your generator capacity if you plan to run off generator power frequently, so #1 can be higher too.
(I broke out maintenance costs from operating costs since there's fixed maintenance costs even if you never run the generator, and there's variable maintenance costs based on the number of hours you run it)
It's been a long time since I've rented coloc space, but at the time, the cost of the power drops to the cage cost more than the space itself. Conditioned reliable power is expensive.
But isn't the issue wider than just not having datacenters? As I understand it the issue is multi-faced and composed of:
1. Reliable power
2. Reliable connectivity.
3. Lack of trust from users (prefer outside providers)
4. Expensive (no economy of scale)
5. Lack of inter-country connectivity.
All of this makes it hard to actually build a profitable data center provider.
I am sure I'm wrong though, I'd be interested in your opinion on this.
but clearly the nortern parts of the continent will need more coverage.
I wonder what the continental fibre infrastructure looks like. Does most of the traffic go via a handful of choke points on the way out of Africa, and would traffic from Kenya to Nigeria (for example) go via somewhere like South Africa, despite the extra length of distance involved?
There's distinct hubs in West Africa, Southern Africa, and East Africa, but a lack of intercontinental terrestrial connections (there's almost a link across the Sahara, nothing live directly connecting East and West Africa).
From what I can tell, Chad, DRC, and CAR are all not really politically stable, so I don't know how realistic cables running across those countries is.
While working briefly for a telecom I was involved in a project that was installing point to point microwave transmitters in Africa instead of fiber optic cable because the locals kept cutting the cables hoping to steal the non-existent copper.
Without the logistical infrastructure in place I don't know how you hope to drop a data center in Africa and hope to have costs be anywhere near what they are in the developed world.
If you host your data center in Africa, but use cloud services in USA or Europe, the latency is going to kill you and your app will even be slower. So you must be willing to give up using AWS, Azure, GCP, etc. If not, then the title of the talk should be AWS, Azure, GCP should build data centers in Africa, but then it doesn't make sense economically. The article mentioned how Nigerians spend about $60 million a year on outside data centers. VCs won't even invest in a software only startup that will make $60mil a year. Let alone a business like a datacenter that needs physical location, properties, personnel, etc
You are ignoring that there are services in Africa focused on the African market. These services could greatly benefit from hosting in a data center and serving their customers from the same continent without having to hop to the EU and back. Granted, depending on where you are (equatorial coast vs. southern) then you may end up hopping anyways because there isn't much (any?) direct usable fiber across the continent.
What's EU latency in Africa? I live in Kazakhstan and EU latency here 80-150 ms. It's pretty fast. I'm actually using Amsterdam VPN almost all the time, and I don't notice any slowdowns.
Lighterweight virtualization can make it affordable to have many more, smaller, data centers, allowing a presence in Africa. If you write a Cloudflare Worker [1] it can be executed in any of our 11 PoPs there [2].
Too difficult to run a business there. ZA Has become a basket case banana republic and the rand keeps falling. Full on GTFO by anyone who wants a future and can afford to leave.
This is a very interesting point and also an opportunity! There aren't that many underseas cable to and from Africa either am I right? So at least in southern parts I'd say that congestion over the cables will become an issue. Something that wouldn't be the case between say Europe and the US.
How much datacenter could one fit into a satellite weighting 30 tons? What if there was a Starlink style contellation of datacenters? Power would be a big issue, of course. If these were in low Earth orbit, latency would be low, and if they had high speed point-to-point communications, virtual servers could be paused, serialized, then sent to the next satellite to go overhead in a specific region.
Granted, it would be way too expensive at the present time, even with reusable Falcon rockets.
[+] [-] PeterisP|6 years ago|reply
So the issue is not that "more data centers are needed urgently" but rather than the question of why the price situation is the way it is.
The main expenses of a data center (just colocation, not renting VMs) are the capital costs of building/renting the facility (including digging some land to pull fiber etc) and paying staff. It's not obvious to me why in Africa these costs would be higher than in Europe, but apparently there's some reason.
I don't see reliable power as a big differentiator since even in the first world your data center anyway needs backup generators; it's just that they would get used much more often.
I don't see expensive bandwidth as a big differentiator since (as far as I understand) the big bottleneck is the undersea cables, and hosting your data on the "wrong side" of these cables should be more expensive - ISPs (at least elsewhere) prefer to cache/re-host/CDN popular data locally as some extra servers in ISPs datacenter turn out to be cheaper than hardware needed for all the extra traffic.
[+] [-] Danieru|6 years ago|reply
Poor countries have less capital. Thus the cost of money is high. For example in Uganda a bank loan costs 20% interest. At such rates only the most effective investments are viable.
Many countries in Africa have such large room for improvement through investment. Data centers are not the biggest need. For example in Uganda they grow avocado's, but lack the cold chain distribution network to sell into the international market.
Thus you have avocado's selling for peanuts at local markets instead of earning big money selling to the west.
Building up a nation's capital stock takes time and long term stability. Thankfully Africa has the stability but time is slow.
[+] [-] TulliusCicero|6 years ago|reply
[+] [-] kyllo|6 years ago|reply
[+] [-] lotsofpulp|6 years ago|reply
Physical security and security of investment (via security of government, infrastructure, judicial systems, pipeline of educated and skilled workers) is worth a lot.
[+] [-] GauntletWizard|6 years ago|reply
[+] [-] Johnny555|6 years ago|reply
Generators have several costs.
1. Fixed costs 2. Maintenance costs 3. Operating costs
#2 and #3 are lower for a generator you run 8 hours a year versus 800 hours a year. And you may want added redundancy for your generator capacity if you plan to run off generator power frequently, so #1 can be higher too.
(I broke out maintenance costs from operating costs since there's fixed maintenance costs even if you never run the generator, and there's variable maintenance costs based on the number of hours you run it)
It's been a long time since I've rented coloc space, but at the time, the cost of the power drops to the cage cost more than the space itself. Conditioned reliable power is expensive.
[+] [-] tinktank|6 years ago|reply
1. Reliable power 2. Reliable connectivity. 3. Lack of trust from users (prefer outside providers) 4. Expensive (no economy of scale) 5. Lack of inter-country connectivity.
All of this makes it hard to actually build a profitable data center provider.
I am sure I'm wrong though, I'd be interested in your opinion on this.
[+] [-] EwanToo|6 years ago|reply
https://aws.amazon.com/local/africa/
Azure also has pair of DCs in South Africa
https://azure.microsoft.com/en-gb/global-infrastructure/sout...
but clearly the nortern parts of the continent will need more coverage.
I wonder what the continental fibre infrastructure looks like. Does most of the traffic go via a handful of choke points on the way out of Africa, and would traffic from Kenya to Nigeria (for example) go via somewhere like South Africa, despite the extra length of distance involved?
[+] [-] coob|6 years ago|reply
[+] [-] jonbaer|6 years ago|reply
[+] [-] bobthepanda|6 years ago|reply
There's distinct hubs in West Africa, Southern Africa, and East Africa, but a lack of intercontinental terrestrial connections (there's almost a link across the Sahara, nothing live directly connecting East and West Africa).
From what I can tell, Chad, DRC, and CAR are all not really politically stable, so I don't know how realistic cables running across those countries is.
[+] [-] diveanon|6 years ago|reply
Without the logistical infrastructure in place I don't know how you hope to drop a data center in Africa and hope to have costs be anywhere near what they are in the developed world.
[+] [-] segmondy|6 years ago|reply
[+] [-] L_226|6 years ago|reply
[+] [-] coderintherye|6 years ago|reply
[+] [-] vbezhenar|6 years ago|reply
[+] [-] hedvig|6 years ago|reply
So you're saying capitalism has limitations on what it focuses on?
[+] [-] zackbloom|6 years ago|reply
1- https://workers.cloudflare.com/
2- https://www.cloudflare.com/network/
[+] [-] dade_|6 years ago|reply
[+] [-] ccffph|6 years ago|reply
[+] [-] canada_dry|6 years ago|reply
I'm sure China telecom will step up as part of their widening reach and influence in Africa.
[+] [-] minikites|6 years ago|reply
[+] [-] rijoja|6 years ago|reply
[+] [-] skc|6 years ago|reply
[+] [-] adrianN|6 years ago|reply
[+] [-] phit_|6 years ago|reply
[+] [-] smartbit|6 years ago|reply
[+] [-] jmpman|6 years ago|reply
[+] [-] stcredzero|6 years ago|reply
Granted, it would be way too expensive at the present time, even with reusable Falcon rockets.
[+] [-] tekno45|6 years ago|reply
[+] [-] python_gt_r3|6 years ago|reply
[deleted]
[+] [-] unknown|6 years ago|reply
[deleted]