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South African Data Centre Market

  • February 2014
  • -
  • Frost & Sullivan
  • -
  • 84 pages

Cloud Computing Set to Drive the Next Wave of Growth

Executive Summary

- The South African data centre market is in its growth stage and is expected to grow strongly in the next xxyears due to outsourcing trends, declining prices, and compliance requirements.
- From a business perspective, outsourcing is becoming more and more mainstream, as enterprises choose to focus on their core business and outsource less mission-critical systems, including data centre operations.
- Furthermore, the low availability and high cost of hiring a skilled workforce in South Africa are setting up challenges for operating data centres internally and hence spurring the demand for outsourced data centre services.
- Increased proliferation of data centre services, notably cloud computing, is expected to lead to greater uptake of services and hence growth of the data centre market.
- Cloud computing and virtualisation are some of the top trends that will drive growth in the South African data centre market between 2012 and 2018.
- As basic hosting and/or co-location services become more and more commoditised, service providers will look to provide more higher-margin services, such as virtualised services and cloud computing, which will emerge as key areas of future growth.

CEO’s Perspective

- Data centre providers are shifting focus towards higher-margin managed hosting services.
- Cloud computing will become the most important driver of data centre services in the next 5 years.
- Security risks and compliance will be critical considerations in the adoption of data centre services.
- While public clouds suit SMEs, large enterprises need to consider private and/or hybrid cloud offerings.
- Outsourcing of data centre services could reduce an enterprise’s carbon footprint and offer tax benefits.

Definitions

- Co-location services refers to pure space rental, including floor space, cage, or racks in different sizes. Basic infrastructure-level support, such as power, cooling specifications, and physical security measures, are provided. Companies typically pay a monthly or annual rental fee for space and are required to purchase their own servers.
- Managed hosting services describes when operators provide customers with server equipment. Customers rent server equipment from the operators along with other specifications. Managed hosting can include sharing the servers with others or having dedicated servers.
- We also define managed hosting services to include the provisioning and management of virtual servers, in which the service provider fully manages the underlying hardware and virtual machines, while customers simply buy the processing capacity they need.
- Application hosting refers to a third party providing its client with the best practices in managing their applications and ensuring that they are dependable. This generally involves a company handing over its day-to-day functions to a service provider.
- Cloud computing is a flexible and scalable environment involving hosted services by a third-party supplier, using virtualisation technologies to create and distribute company resources on an as-needed basis through the Internet.
- Software as a Service (SaaS) is an Internet-based software application that is hosted and maintained by the application provider, not by the enterprise that is using it.
- Infrastructure as a Service (IaaS) refers to the outsourcing of equipment supporting operations that include hardware, storage, servers, and network components. The service provider is responsible for and owns all the equipment, while the client pays only for what they use.
- Platform as a Service (PaaS) is an extension of SaaS, in which a platform is established to facilitate the deliver of a new software. Templates are used to reduce the amount of time spent developing platforms, and more focus is placed on product development.
- Managed services involves the minimisation or complete elimination of the internal IT team and the transferral of responsibility of non-core business processes to a provider in terms of deploying, maintaining, and supporting IT services. Managed services can be provided for networks, databases, servers, storages, and applications.
- Virtualisation technologies use software to separate the application from the server hardware, allowing a server to have numerous virtual environments that can host multiple applications and operating systems.

Key Questions This Study Will Answer

Is the market growing? If so, how long will it continue to grow and at what rate?
What is the current competitive landscape in South Africa?
What are the key drivers and restraints in the data centre market?
Which services are currently offered in South Africa?
What is the impact of the infrastructural developments in telecommunications on the data centre market?
What is the current and potential data centre market size in South Africa?

Table Of Contents

South African Data Centre Market
Market Overview
Total Data Centre Market
External Challenges: Drivers and Restraints
Forecasts and Trends
Demand Analysis
Market Share and Competitive Analysis
Co-location Segment Breakdown
Managed Hosting Segment Breakdown
Web and Application Hosting Segment Breakdown
Hosted Security Segment Breakdown
Others Segment Breakdown
The Last Word
Appendix

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