Poor power supply hinders N3tn investment in data centres

The prolonged struggle to overcome the power crisis is a major obstacle to broadband penetration in the country, OZIOMA UBABUKOH writes

The Federal Government must resolve the power infrastructure shortcomings in the country and formulate good broadband policies to attract N3tn investment in data centre deployment, analysts have said.

Data centres are critical to the provision of faster and cheaper Internet connectivity and President Muhammadu Buhari as well as the Ministry of Communications have said approximately 300 of such centres are required to support affordable Internet services and software applications in the country.

The President and the ministry believe the development of data centres will also help to stop data hosting overseas, which aids capital flight.

However, findings from our correspondent showed that a world class data warehouse would cost between $20m and $30m. This means that Nigeria currently requires an investment of approximately N3tn for its planned 300 data centres.

Foreign Information Technology companies such as Google Incorporated, Microsoft Corporation and Oracle, at various fora, have said they will be willing to invest in this area.

The companies, however, expressed concern that five years after the landing of fibre optic submarine cables on Nigeria’s shores, the country had been unable to speed up the pace of wholesale fibre access due to the absence of a broadband policy that would promote infrastructure sharing and competition.

“Technology firms, such as Google, are interested in investing hugely in data centres if Nigeria can address the power challenge and speedily tackle the issue of last mile connectivity and distribution capacity, so as to spread available bandwidth capacity across the entire country,” says the Communications Manager, Anglophone West Africa, Google, Taiwo Kola-Ogunlade.

The Director, Business and Strategy, Kits Technologies, a data centre infrastructure provider, Taofeek Okoya, says stable power supply is critical.

He explains, “Yes, broadband infrastructure is important, but power is even more critical. Today, Nigeria is still struggling with unstable power supply. Importantly, data centres consume a lot of electricity.

“Nigeria is, indeed, a huge market and the potential here is enormous for local and foreign IT companies. As I speak, there are lots of data centre initiatives ongoing in the country. A lot of banks and government agencies are building data centres.”

Okoya adds that it is important for data centre owners to build competent human capacity to manage their high cost infrastructure.

Data centre deployment, according to analysts and market watchers, is big business, capable of creating wealth and job opportunities.

A large data centre may have from 100 to as many as 300 onsite employees, and give impetus to Nigeria’s online business community to provide innovative services cost-effectively.

A senior executive at Microsoft West Africa says massive investments will be ploughed into data centre deployment over the next few years if the government plays its expected role.

“Hopefully, when we get power and broadband right, then technology firms like Microsoft can concentrate on bridging Nigeria’s and indeed Africa’s digital divide. Data centres will also create a lot of employment for Nigerians directly and indirectly,” says the executive, who spoke anonymously because he is not authorised to speak on the issue.

One company interested in the development of data centres in Nigeria is undersea cable operator, Seacom.

Already, Seacom has partnered Microsoft, providing Ethernet links between its Information Technology infrastructure and Microsoft’s Azure and Office 365 data centres around the world.

Now, a Microsoft ExpressRoute partner, Seacom believes its deal with Microsoft will help Nigerian organisations that are migrating some or their entire business applications and IT infrastructure to the cloud with faster and reliable connectivity with Microsoft’s Azure platform.

The absence of the requisite data centres in the country has caused local users to rely on data centres in other parts of the world to access services such as those provided by Azure.

“Since Microsoft does not yet have Azure data centres in Africa, a dedicated, high-quality connection to Azure services hosted in Europe or other parts of the world can ensure a smoother, faster experience for the end-user,” the undersea cable operator says.

Meanwhile, the rise in the availability of international bandwidth connectivity from underwater fibre optic cable systems has attracted many foreign ICT companies into the country. Data centre deployment is one area expected to witness a boom in the coming years. But the absence of last mile broadband connectivity, technical know-how and expertise continue to slow down progress in data centre deployment.

Giving her perspective on what needs to be done to address Nigeria’s Internet access problems, the Chief Executive Officer of MainOne Cable Company, Funke Opeke, says, “We really need to agree to a commercially viable framework for infrastructure sharing with incentives for the incumbent operators to share their proprietary networks.”

The interest of data centre operators in the Nigerian market is evident in activities in the country in recent years.

Since 2011, Google has aggressively marketed its cloud platform and services to corporations in the country.

Microsoft launched its global Office 365 cloud solution in Nigeria in June 2012. And Dell visited the country recently in a bid to promote Dell servers or local data warehousing initiatives.

Mobile network operators have not been left out of the party, as MTN Nigeria has introduced a variety of enterprise cloud-based services, supported by its state-of-the-art data centre.

Also, Gateway Communications, a pan-African service provider with the largest Multi-protocol Label Switching cloud in Africa, bought by Vodacom in December 2008, introduced its cloud services to the Nigerian market. Besides, indigenous firms are increasingly looking at collaborating with global vendors with experience in cloud system and data centre development.

According to a report, Internet Solutions West Africa invested N1.65bn ($10.5m) over a two-year period (2009 to 2011) in building two data centres in Lagos, covering a combined space of 125 square metres. It further invested N225m in upgrades and expansion of its Victoria Island, Lagos in 2011.

Resourcery Nigeria, another local IT firm, established its own Cisco Unified Computing System in the country, targeting telecoms companies and banks. In addition, TTC Technologies is collaborating with the Obafemi Awolowo University, Ile-Ife, to build private clouds for corporate customers.

All that is needed now to encourage more investment, according to analysts, is a stable power supply and a viable framework for the industry.

Source: www.centraldatatech.com