Hetzner Targets South African Businesses

German datacentre operator Hetzner has begun co nstruction of its new facility in Gauteng, South Africa. The new datacentre is part of a planned datacentre park to be build between Johannesburg and Pretoria, capturing the largest market for enterprise customers in the country. With strong economic growth prospects and Sub-Saharan Africa's stronger than average broadband penetration, BMI believes it will remain a popular market for datacentre launches in the region.

Greater Connectivity Will Attract More Datacentres
Africa And South Africa Broadband Penetration (%)

South Africa benefits from stronger infrastructure than most of its peer markets, a key factor in building datacentres. The facilities require consistent power to ensure data is always online and cooling equipment does not fail. Datacentres use a large amount of electricity, ruling out locations where access to power is limited or inconsistent. Proximity to the businesses and organisations that will use datacentre capacity is also important, hence selecting Samrand, which is located on a major highway between Pretoria and Johannesburg. The highway is the location for many datacentres catering to the Johannesburg market.

Datacentre services near Johannesburg are offered by a number of local players including telecoms operators MTN, Vodacom and Neotel as well as local IT players such as Business Connexion. Hetzner will be one of a small number of international players entering the market there. Indeed, this is Hetzner's first datacentre venture outside Germany, highlighting the potential of the South African market for growth. With ambitious growth plans, seeing Hetzner building a datacentre park of five datacentres, the company clearly sees potential for strong growth and expects considerable demand.

BMI's IT market forecasts back this assumption, seeing the market's IT services segment grow at an average of 10.2% over 2013-2017. This compares favourably with the 9.3% growth for the sector as a whole over the same period. This growth in datacentre usage and the applications it can offer, particularly cloud computing, is supported by the strong growth in broadband availability across the country. Investments in infrastructure are key to ensuring the reliability of access to datacentre capacity for customers and major towns and cities have the strongest infrastructure to enable this. BMI expects more datacentres to be built in sub-Saharan Africa to cater to the growing use of IT services across the region by local and international companies and Hetzner will be joined by a growing number of international datacentre providers.

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Geography: South Africa

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