AFRICA DATA CENTRES: ADC Promises Large Investment in Kenya

Africa is a tech destination like never before and like nowhere else. The growing population, and quickly increasing rates of connectivity and technology literacy make the continent a hub for investment. The fintech ecosystem has grown aggressively, and in highly innovative ways. Reports suggest the value of Africa’s fintech space will grow by 32% in the next four years. But this progress requires capacity. Skills, capital, and infrastructure are essential in the ongoing digitisation of service delivery on the continent.   

Southern and northern Africa are mostly well served in terms of connectivity and infrastructure rollout, but east and west Africa have much room for experienced players to take advantage of the growing need for volume.

At just 26.7%, the internet penetration rate in east Africa is the lowest on the continent, but demand for digital banking and financial services, entertainment, ecommerce, and software provision is soaring.

Dan Kwach, Regional Managing Director: East Africa at Africa Data Centres (ADC) has seen the trend grow, and he is happy to announce that the company is exploring the build of an all-new data centre in Kenya to support the digitisation drive.

“Looking at East Africa, we lead in many ways. We lead because we are the largest data centre operator at 4MW. It’s one thing to have 4MW data centre space, but it’s even more important being the most connected and rich in mix of digital ecosystem partners,” he says of the company’s operation in Nairobi where many large-scale players are hosted in one of the most reliable data centres on the continent. From banks to cloud players to public sector and content streaming organisations, ADC plays an important role.

“We have the privileged position of having many critical players in one place. We host very sensitive and critical public sector digital infrastructure in our environment with need for more capacity. That is why we have taken the bold step to build a 15-20MW data centre.”

Already, the land has been acquired and ADC is busy working with the county to ensure the correct approvals are in place. When the paperwork is complete, construction can begin and Kwach suggests the new site can become fully operational in two years. An IT engineer by training, and experienced IT industry professional for almost two decades, he knows what it takes to build from the ground up in Kenya.

BUILDING CAPACITY

“We must proactively build capacity for new cloud players that are coming into Africa,” he says. “The whole discussion around AI, along with the fact that Kenya is seen to have opportunities in green energy and talent; as well as the government taking a strategic role in marketing Kenya as a tech hub, and the fact our broadband penetration and network stability is very good, mean that it is sensible to build capacity in East Africa to serve the continent and the globe.”

Whilst this expansion is happening in Kenya, the capacity to be availed is sufficient to serve the continent as ADC leverages on local resources. The ICT market as a whole in Kenya is expected to reach a value of more than $10.5 billion in 2024 as more international businesses look for a base from where they will serve all of Africa. As a division of Cassava Technologies – a pan African technology leader -, ADC is using its position to assist in bridging the digital infrastructure gap.

“I am fully comfortable with local ability here,” says Kwach. “There is a skills gap and there is more that we can do. But that is very addressable by trusting the qualified talent we have in Africa. We have a lot of high quality mechanical and electrical engineers coming straight from the universities. We have a lot of graduates in computer science and other technology courses that want to work. I am an advocate for African businesses using our opportunities to address unemployment here. I am a believer of giving opportunities to the ambitious youth here in Africa. When they have their education, let’s entrust them and help them translate their knowledge to a work environment. It will only happen if we give them exposure and experience.”

As the next generation builds its expertise on the new data centre, ADC and Cassava Technologies is highlighting the region as an investment destination for hyperscale cloud players. Efficient data centres are vital, storing vast amounts of digital information, processing and distributing as necessary, supporting various business applications, effectively centralising IT operations and equipment.

STRATEGICALLY POSITIONED

“Kenya is strategically positioned to serve the globe,” Kwach reminds, saying that major submarine cables terminate in Mombasa before terrestrial cables complete the connection to the data centre in Nairobi. ADC has a strong presence, with data centres linked across South Africa, where there is a concentration in Johannesburg and Cape Town. In West Africa, there is a concentration in Nigeria and Ghana, while North Africa has a concentration in Morocco and Egypt. “With ADC having a strategy to focus on key locations, where there will be heavy consumption of technological services, we will ensure anything we build is sufficiently connected to serve the globe.”

On the continent, there is a plan beyond Kenya as ADC intends to extend reach in East Africa, to serve Tanzania, Rwanda, Uganda, and other neighbouring countries. The high level of quality and safety combined with expert operation at local level make ADC the perfect choice for those working at scale. In Rwanda, ADC has a parcel of land that will be developed with the purpose of housing a leading data centre, connected to the rest of its Pan-African operations.

“A number of our enterprise customers– especially banking institutions – use our data centre to run pan-African IT projects. We expect more and more enquiries as businesses look for ways to centralise their IT infrastructure whenever chance allows,” says Kwach.

When up and running, the new data centre will build on what is already a formidable position in East Africa, expertly crafter over years by Kwach and team.

Currently, the 4MW data centre operated by ADC in Kenya – the first to be acquired by Cassava Technologies – has 3MW of lit capacity. But Kwach is keen to drive further usage of the asset and is busy signing up new and existing clients as the remaining 1MW is activated. From here, organic expansion into the newbuild will begin.

“From an occupancy perspective, we have a privileged position,” he explains. “We are sold out to a mix of customers across telecoms (around 100 companies), banks and financial sector industry (where we host 60% of Kenya’s financial services players), and then content delivery players in the East African market.

“We have closed some deals with existing customers that requires us to expand our current space. We are activating an additional 1MW in our data centre, and that is our number one priority right now,” he says.

GREEN POWERED?

The demand for space is driven by customers who are transitioning from legacy infrastructure to the cloud. As part of digital transformation agenda, businesses generally implement a hybrid cloud model while transitioning from current to modern tech. On- and off-prem cloud deployments will require complex IT business models. But another factor is also coming into play as organisations review their footprint. Data centres are typically energy intensive and require significant electricity input, creating emissions while generating heat. Cooling and lighting are key users of a data centre’s energy input. Hyperscaler’s cloud offerings and adoption of advanced computing technologies like AI, IoT, and blockchain will continue to encourage uptake of data centre space as East Africa moves quickly on its digitalisation journey. When powered by green energy, Kenya and its infrastructure becomes even more aligned with ESG strategies.

“The government sells Kenya as a data centre destination because of its green energy resources,” says Kwach. With this opportunity in mind, the company is looking at other sites around the country to develop a fully green data centre. “We don’t want to do things the same as we have before. We have done well being in the enterprise hub of Nairobi, and we are efficient with a Power Usage Effectiveness (PUE) at 1.5. We want to tap into green energy and are looking at looking at sites in places with affordable, green and renewable power generation capabilities.”

With so much happening, not just in Kenya but across East Africa, ADC has cemented its brand at the front of the pack. Competitors are aggressive, says Kwach, conducting successful operations. But a culture of excellence sets ADC apart.

“Our unique selling point is our organisational culture,” he smiles, citing Peter Drucker. “Ours is a culture where everyone is a top performer. As an organisation, we keep customer obsession at our heart. Everyone is sales oriented – that includes third parties that we work with. Even the man guarding our gate – everyone forms part of what we sell. How they position themselves and how they handle anyone who wants to interact with our data centre is how we win. We ensure that anyone who has an opportunity to work with us doesn’t think twice. We deliver on what we promise, and if for some reason we struggle, we hold ourselves to account,” he concludes.  

This commitment to quality is what is helping Africa’s reputation on the global stage, and is what will only encourage further development in East Africa as the ambitions of global hyperscale players and regional powerhouses are matched by ADC.