Data Center - South Africa

South Africa

Revenue in the Data Center market is projected to reach US$1.06bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$0.64bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 4.62%, resulting in a market volume of US$1.27bn by 2028.
In global comparison, most revenue will be generated in the United States (US$99.16bn in 2024).

Key regions: United States, Germany, India, Japan, China

Definition:

The Data Center market is a critical segment of the technology industry focusing on supplying and managing physical infrastructure necessary for hosting and operating IT systems, primarily servers, storage, and network equipment. This market spans from traditional in-house data centers to sophisticated facilities offered by specialized providers, covering services like hosting, shared data center facilities, and managed data center solutions. It targets a diverse client base, ranging from small businesses to large enterprises, offering flexible, scalable solutions for their IT infrastructure needs. This sector is integral to the efficient functioning and security of IT operations in various organizations.

Structure:

The Data Center market is structured in three markets based on the services model provided by the companies.

The Server market covers the resources and services related to servers, integral for hosting websites, managing databases, and supporting cloud computing.
The Storage market covers the resources and services related to data storage systems, crucial for archiving, data backup, and ensuring data recovery.
The Network Infrastructure market covers the resources and services related to network hardware essential for ensuring connectivity, data transmission, and network security.

Additional Information:

The Data Center market includes revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Market values represent revenues paid to primary vendors at the manufacturer price level either directly or through distribution channels (excluding VAT). Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in the Data Center market include companies such as Dell, HPE, Huawei, and Ericsson.

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Market

Region

Region comparison

Currency

Analyst Opinion

The Data Center market in South Africa is experiencing significant growth and development, driven by various factors that are shaping the industry in the country.

Customer preferences: Customers in South Africa are increasingly demanding reliable and secure data center services to support their growing digital operations. With the rise of cloud computing, big data analytics, and the Internet of Things (IoT), businesses are generating and storing vast amounts of data that require robust infrastructure and connectivity. Additionally, customers are placing a greater emphasis on energy efficiency and sustainability, seeking data centers that are environmentally friendly and have a reduced carbon footprint.

Trends in the market: One of the key trends in the South African Data Center market is the increasing adoption of colocation services. Many businesses are opting to outsource their data center needs to third-party providers, allowing them to focus on their core operations while benefiting from the expertise and infrastructure of specialized providers. This trend is driven by the need for cost-effective solutions, scalability, and access to advanced technologies. Another trend in the market is the growth of edge computing. With the proliferation of IoT devices and the need for real-time data processing, there is a growing demand for data centers located closer to the edge of the network. This allows for faster data processing and reduced latency, enabling businesses to deliver seamless and responsive services to their customers.

Local special circumstances: South Africa has a unique set of circumstances that are influencing the development of the Data Center market. The country has a well-developed telecommunications infrastructure and is a major hub for undersea fiber optic cables, providing reliable connectivity to international markets. This makes South Africa an attractive location for data center investments, as it offers a gateway to the African continent and allows for seamless connectivity with global networks. Furthermore, South Africa has a diverse economy with a strong presence of industries such as finance, telecommunications, and mining. These sectors generate significant amounts of data and require robust data center infrastructure to support their operations. As a result, there is a growing demand for specialized data center services tailored to the needs of these industries.

Underlying macroeconomic factors: The development of the Data Center market in South Africa is also influenced by underlying macroeconomic factors. The country has a young and growing population, with increasing internet penetration and smartphone adoption. This drives the demand for digital services and creates opportunities for data center providers to cater to the needs of a digitally connected population. Additionally, the South African government has recognized the importance of digital infrastructure and has implemented policies and incentives to attract investments in the data center sector. This includes tax incentives, streamlined regulations, and initiatives to promote renewable energy and energy efficiency in data centers. These measures create a favorable business environment and encourage the growth of the Data Center market in South Africa. In conclusion, the Data Center market in South Africa is experiencing rapid growth and development, driven by customer preferences for reliable and secure services, the adoption of colocation and edge computing, local special circumstances such as a well-developed telecommunications infrastructure and a diverse economy, and underlying macroeconomic factors including a growing population and government support. These factors are shaping the industry and creating opportunities for data center providers in the country.

Methodology

Data coverage:

The data encompasses B2B enterprises. Figures are based on hardware-related expenses of businesses for setting up and maintaining an IT infrastructure.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports and national statistical offices. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of digitization. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques, such as exponential trend smoothing and the S-curve function, is based on the behavior of the relevant market.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.