Hosting war in SA
The South African data centre environment became very competitive over the last two years with Vodacom Business, Neotel, BCX, Teraco and others unveiling high-end hosting environments. Financial institutions like Standard Bank, ABSA and Discovery Health are also involved in what is believed to be their own Tier 4 hosting environment.
New data centres opening
New and existing players have invested in high end hosting facilities, with Business Connexion (BCX) being the first player to build a true Tier 4 data centre. Business Connexion CEO Benjamin Mophatlane said that data centres are a big growth area for the company, and that they have spent a fair amount of money to build one of the only six Tier 4 data centres in the world. “[Tier 4 is] certainly quite a selling point with most of our clients,” said Mophatlane in a Moneyweb interview.
In June last year Neotel launched its new data center at its premises in Midrand, with the aim of opening a second one in Cape Town soon. “The Neotel data center is an example of a fresh new approach in the South African market – our data centers are modular in design, with high energy efficient technologies allowing the highest data center cooling density,” says Rajeev Sinha, head of product and solutions at Neotel.
In late 2008 Vodacom Business launched its R100-million hosting facility in Midrand which boasts various impressive facilities, including biometric security systems, video surveillance, on-site security officers and surplus power. Teraco followed with its vendor neutral data centre in Cape Town in March 2009, and is set to open its 3800 square meter Johannesburg data centre this month.
Cybernest planning to shake things up
Telkom has previously not been particularly aggressive in the hosting environment while many of its competitors like Internet Solutions, Verizon Business (now MTN Business) and BCX have developed very strong hosting businesses. Telkom is however planning to change this with its Cybernest business unit.
In November last year Telkom launched its ‘green data centre’, called Bellville 2, in Cape Town under a new brand offering called Cybernest. At the time the hosting business unit was called Telkom Data Centre Operations (DCO), but this was collapsed into the new Cybernest business unit.
Cybernest currently has in the region of 10 000 square metres of hosting space spread across data centres in Gauteng, Cape Town and Hartbeespoort. Many of these data centres are connected via multiple-Gbps connections which are often used to provide real-time redundant solutions to clients.
Cybernest currently has 83 non-Telkom clients, but is planning to significantly increase its clients base – not only in South Africa but also internationally. Cybernest will therefore not focus solely on the local hosting environment, but has business plans for the SADC, Pan African and European markets. Telkom’s partnership with AT&T – as well as potential acquisitions in the data centre market – may form part of the company’s strategy to gain market share in markets other than South Africa.
Locally Cybernest will focus their business on corporate high end clients, offering custom solutions tailored to fit the client’s needs. The company groups its offerings as basic hosting, managed hosting, virtual hosting, disaster recovery, email and application solutions and IT security solutions.
One of the lesser known facts about Cybernest is that its boasts two TelePresence facilities which are offered to clients free of charge. These facilities are currently not available to outside companies, but this is something which may change in future.
With Telkom Cybernest, Neotel and Teraco’s entrance into the local data centre business market one can expect pricing to come under pressure. This has already happened over the last few months in terms of hosting bandwidth rates, and this trend may well continue as the different hosting providers battle it out for market share.
Data Centre was in SA – comments and views
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