Teraco believes there’s still a lot to battle for in the rest of Africa, despite the fierce competition in South Africa’s data center market. In a recent interview with ITWeb, Jan Hnzido, CEO of vendor-neutral data center Teraco, made this announcement.
Hzido also thinks that Teraco will have an advantage as it prepares to grow its data center presence in Africa thanks to the US company Digital Realty’s recent acquisition of a controlling stake in the company.
Teraco Seeks to Maintain Dominance in Africa
Approximately 55% of the total equity interests in Teraco are owned by Digital Realty, one of the biggest global providers of cloud and carrier-neutral data center, colocation, and interconnection solutions.
The remaining 45% are held by a group of shareholders that includes the Teraco Connect Trust, management, Berkshire Partners, Permira, Van Rooyen Group, Columbia Capital, and Stepstone Ventures. The business is present in Kenya and Nigeria as well.
Founded in 2008 and headquartered in Johannesburg, Teraco is the biggest provider of data center services in Africa. Although Hnzido admits that there has been intense competition in the local market, South Africa will continue to be an important hub for data centers in Africa.
Leading Companies in the Market
The size of the South African data center market is predicted by a report by Mordor Intelligence to be 434.86MW in 2024 and is projected to increase at a compound annual growth rate (CAGR) of 13.77% to reach 828.93MW by 2029.
According to the report, the data center industry in South Africa is fairly consolidated, with the top five businesses holding 48.86% of the market. The leading companies in this market are BCX, Equinix, NTT, Teraco, and Vantage Data Centers.
Due to growing competition and an increase in the number of organizations moving their workloads to the cloud, Teraco has been expanding the capacity of its data centers in South Africa.
He points out that the expansion plans are ongoing at the same time. “We also completed a minor expansion in Durban.” “There are a lot of new competitors in the market, and I believe that the rest of Africa will be the next frontier.”
Teraco May Have a Stronger Edge of Winning the Battle for Data Centers
According to Mordor Intelligence, the size of the data center market in Africa is projected to be 69 000 MW in 2024 and is anticipated to increase at a compound annual growth rate (CAGR) of 12.34% to reach 1 230 000 MW by 2029.
Teraco is said to have dominated the market in 2023 with a share of 28.9%, despite having the same competitors as the South African market.
Bloomberg revealed last week that US-based Equinix will invest $390 million (R7.5 billion) in Africa over the next five years to build data centers and expand current operations in South Africa and the west of the continent, as data center operators step up their game in the continent.
Hnzido believes Teraco has a stronger chance of winning the battle for data centers across the remainder of Africa now that it has Digital Realty on its side.
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