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CLIENT Data Center Market Analysis | Kenya

CLIENT Data Center Market Analysis | Kenya. Final presentation. January 2018. CLIENT Data Center Market Analysis | Kenya The Consulting Academy Network. Germany. Europe. The Consulting Academy Network spreads the concept of student-run consultancies across the world

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CLIENT Data Center Market Analysis | Kenya

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  1. CLIENT Data Center Market Analysis | Kenya Final presentation January 2018

  2. CLIENT Data Center Market Analysis | KenyaThe Consulting Academy Network Germany Europe • The Consulting Academy Network spreads the concept of student-run consultancies across the world • A student-run consultancy offers high quality consulting services for an unique price-quality ratio • Our quality concept is based on a rigorous selection process, a demanding training concept and mentoring from experienced consultants • We support our students ideationally and financially to provide them with great opportunities for their professional career Africa

  3. Agenda Management Summary Market overview Big Data Center Profiles Small Data Center Profiles

  4. Agenda Management Summary Market overview Big Data Center Profiles Small Data Center Profiles

  5. CLIENT Data Center Market Analysis | KenyaSituation – Complication - Questions S C Q Situation Complication Questions • In order to decide if the client should start activities in this market, more information regarding the structure and developments of the market is required • Only few information about the Kenyan data center market is freely available • The client and The Consulting Academy agreed on conducting an analysis which will provide necessary insights for a profound decision making process • The client would like to know the current market situation in the Kenyan data center market and getting an overview over the main operators • The client is especially interested in the sophistication level in terms of KPI 1, KPI 2, KPI 3 and KPI 4 • In May 2017, theclientgot a new country management that aims to enter promising markets in Kenya • The client aims to evaluate the potential of various markets • One of these markets is the data center market, which could be a promising opportunity for the client • The Consulting Academy uses this project as a proof-of-concept for further collaboration

  6. CLIENT Data Center Market Analysis | KenyaManagement Summary In total 7 big data center with a rack space of more than 50 racks and 12 small data centers were examined via desk research, primary research and expert interviews. The following main results were found: In the upcoming two years the white space of Data Center is increasing as new data center open and existing data center explore new floorspace Outcome 3 Outcome 4 Outcome 5 Outcome 2

  7. Agenda Management Summary Market overview Big Data Center Profiles Small Data Center Profiles

  8. CLIENT Data Center Market Analysis | KenyaData Center Services Market - Worldwide 43.3% Sub-Saharan Africa data center services revenues in mUSD 2015-2020 20.2% North America Europe, Middle East, North Africa CAGR 15-20 16% 36.4% Asia Pacific 17,182 mUSD 8,035 mUSD 14,463 mUSD 2015 2016 2017 e2018 e2019 e2020 Sub - Saharan Africa 1.5% Latin America 9.5% • Increasing rapidly through trend to outsourcing and cloud services • CAGR 16.1 % in South Sub-Saharan Africa vs. CAGR 14.3% worldwide 583 mUSD 3,751 mUSD

  9. CLIENT Data Center Market Analysis | KenyaData Center Services Market – Sub-Saharan Africa Sub-Saharan Africa data center services revenues in mUSD 2015-2020 Sub-Saharan Africa (w/o South Africa) data center services revenues in mUSD 2015-2020 South Africa Not South Africa Nigeria Kenya Others 926 280 CAGR 15-20 36% 790 210 679 583 157 500 439 79 114 60 79 17 60 10 4 2015 2016 2017 e2018 e2019 e2020 2015 2016 2017 e2018 e2019 e2020 • South African Data Center Service Market accounts for roughly 80 % in 2017 in Sub-Saharan Africa but will slightly decrease to 70 % in 2020 • The rest of the Sub-Saharan Data Center Service Market is mainly dominated by the Nigerian and Kenyan Data Center Service Market • These markets grow much faster than the South American market (CAGR 36 % vs. CAGR 16 %)

  10. CLIENT Data Center Market Analysis | KenyaSituation – Challenges – Trends Situation Challenges Trends 1. Trust Kenyan corporations find it hard to give their trust to data centers since the laws that protect their data may be compromised and cyber attacks are on the rise 2. Security Corporations are skeptical about both the physical security of the data and cyberattacks which have been on the rise in Kenya 3. Power Some regions experience serious power outages from the national grid making these data centers almost entirely rely on non-renewable forms of energy (generators) 4. Personnel Data centers are facing the challenge of recruiting qualified and experienced stuff to operate the data center and its services 1. Early market stage Big companies, e.g. Safaricom, still tend to venture their own data centers, even if it is not their core business 2. Utilization Normal utilization is about 40-50% of the capacity of the data center, which is low in global comparison 3. Green energy Green energy does not play a role for colocation data centers at the moment as customers do not demand 1. Increase in need for data centers Expected increase by 30-35% in use of data center facilities and services within next 5 years 2. Laws and regulations The government is expected to tighten its rules and regulations in the area of data security which will mostly affect Tier I and II data center 3. Entering of independent players The ratio of independent organizations running data centers in Kenya is increasing, that all also think of building up an SOC 4. Outsourcing More and more organizations are going to outsource their operations, especially in the field of R&D also in the financial industry Experts

  11. CLIENT Data Center Market Analysis | KenyaData Center Overview Big data center* xxx Deploid Built Planned 640 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Logo Logo Logo Logo Logo Logo East Africa Data Center Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX PUE Power per rack NOC SOC owned by telco Small data center* Logo Logo Logo Logo Logo Logo Logo Logo Logo Logo Logo Logo Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Data Center XXX Source: The Consulting Academy Analysis *Government data center and data center of financial institutions are *excluded due to lack of reliable data

  12. CLIENT Data Center Market Analysis | KenyaNOC and SOC KPI 1 KPI 2 Description of KPI 1 Description of KPI 2 Outcome 1 Outcome 1 Outcome 2 Outcome 2 Outcome 3 Outcome 3 *Serianu Cyber Security Report 2016 Source: http://www.serianu.com/downloads/AfricaCyberSecurityReport2016.pdf

  13. CLIENT Data Center Market Analysis | KenyaImplications The client might provide consulting services (technical expertise) for currently entered independent collocation provider that do not have experience Implication 2 Implication 3 Implication 4 Implication 5 Implication 6

  14. CLIENT Data Center Market Analysis | KenyaMethodology Desk Research Primary Research Expert Interviews … To deepen the general overview and for crosschecking the information, interviews with two experts were conducted. … all data centers were called in a second state to confirm already researched information and to fill information gaps … As a first step data center in the internet were researched. As only big data center have detailed and reliable information …

  15. Agenda Management Summary Market overview Big Data Center Profiles Small Data Center Profiles

  16. CLIENT Data Center Market Analysis | KenyaEast Africa Data Center (I/II) Data center photo Data Center facts Overview 1.000 640 450 224 224 224 70 Size Power Resource utilization level • Floor 1 and 2 almost 100% used • Floor 3 and 4 empty • Currently only using 1.5 MW 0% 100% 0% 100% Small Big Medium 0% 100% • Own power substation: 97% grid power • No plans for solar cells etc. at the moment Green energy low high Maturity level Connectivity Positioning & USP Short description National International The East Africa Data Center became the only Data Center certified as Tier III by Uptime Institute in East Africa when it built its own power substation. It is the oldest Data Center in East Africa with more than 300 racks and has potential to grow with two more floors. BMS P SOC O NOC P nat. intern. 8 in total 20 in total small big • Only provide physical connection check and monitor power, do not check data on network • User/ISP provider will notice problems before EADC • Competitors claim EADC to have an SOC Focus on international as well as national companies with a minimum of half a rack space

  17. CLIENT Data Center Market Analysis | KenyaEast Africa Data Center (II/II) Managing Director Operator facts Overview 1.000 640 450 224 224 224 70 Product portfolio and industry Global footprint and Data Centers P Internet Service Provider • IP provider in eastern, central and southern Africa Fiber Network Provider P • Africa’s largest fiber network (over 21 000 km) Mobile Network Operator O Carrier Wholesale P • fibre optic, satellite and international carrier services  P • Liquid Telecom Payments (6 countries) Payment Solutions • outsourced and wholly owned/operated hosting facilities P Hosting Service 4 collocation Data Center in Africa • official Microsoft Cloud Service Program (CSP) partner Cloud Service P • e.g. ipidiTV Home Entertainment P

  18. CLIENT Data Center Market Analysis | Kenya Profiles of all other big data centers

  19. Agenda Management Summary Market overview Big Data Center Profiles Small Data Center Profiles

  20. CLIENT Data Center Market Analysis | KenyaKiboto and Eldoret Data Center (short profile) Operator facts Data Center facts Data Center facts Size Size East African footprint and Headquarter Nairobi, Westlands Small Big Small Big Medium Medium Maturity level Maturity level BMS BMS N/A N/A SOC SOC P P NOC NOC P P • Same SOC as for Thika Data Center • Same SOC as for Thika Data Center

  21. CLIENT Data Center Market Analysis | Kenya Profiles of all other small data centers

  22. CLIENT Data Center Market Analysis | KenyaContact Details Johannes Nyari Marius Juergensen Project Controller Project Leader johannes.nyari@ theconsultingacademy.co.ke marius.juergensen@theconsultingacademy.co.ke +49 176 61444365 +49 157 37280153

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  24. CLIENT Data Center Market Analysis | KenyaTimeline and capacities Capacity in racks of the seven in this project investigated big data centers in Kenya 2013-2022 3.312 Planned Built 1.676 … 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2022 … First Tier IV data center in Africa First big data center in Kenya starts operation First big data center in ZA Microsoft enters market Safaricom extends Thika Data Center IBM enters market in Africa Icolo.io and Kooba enter market, MTN extends activities < Capacity in Kenya in racks by provider Deploid Built Planned • In the recent years, many big firms entered the data center market in Kenya • There are also several data centers in planning while existing data centers expand their capacities xxx 640 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Logo Logo Logo Logo Logo Logo

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