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SA's data centre market forecast to top $521 million

SA's data centre market forecast to top 1 million.

Tech companies in South Africa's data centre market are expected to increase their combined revenues from $305.8 million in 2013 to $521.7 million by 2018, according to new analysis by research firm, Frost & Sullivan.

Frost & Sullivan notes that data centres in the African economic powerhouse are currently riding "a wave of opportunity as the increased availability of bandwidth, proliferation of connected devices, and regulatory compliance requirements have caused explosive growth in data loads”.

The South African data centre market encompasses web and application hosting, cloud based services and managed hosting. This has been further dictated by the need by companies for improved efficiency, agility and cost effectiveness aimed at boosting and maintaining maximum uptime, it says.

“When drawing out their cloud strategies, enterprises will choose cloud models based on the sensitivity levels of their different operations,” said Frost & Sullivan ICT Industry analyst, Ishe Zingoni.

The analysis shows the cloud computing segment as one of the “biggest beneficiaries of growth” in the converged data centre market in South Africa.

However, Frost & Sullivan says South Africa lacks skilled manpower that can manage and maintain advanced data centre technology, with highly skilled personnel coming at a premium.

“Therefore, companies are using third-party providers to manage specific data centre activities and achieve lower total cost of ownership,” says the analysis report.

As a result of this increasing uptake, data centre service providers are seeking to expand their offerings beyond pure hosting or co-location.

Managed hosting, virtualised offerings and cloud computing have gained currency, and are expected to drive market growth till 2018, the report says.

“Eventually, as security concerns are allayed and business cases improve, there will be a substantial uptake of cloud-based business solutions, and a distinctive preference for hybrid-type cloud solutions,” noted Zingoni.

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