The fight for Big Tech money in South Africa

Liquid Telecom is careful not to give away any competitive edge it has that could win it business from big multinational “hyperscale” cloud companies like Amazon, Google, and Microsoft.

When Microsoft first announced that it would launch Azure data centres in South Africa, rumours about who had won the business swirled in the industry.

Rumours that Amazon was looking to launch local nodes for Amazon Web Services also immediately reignited.

It is now an open secret that Teraco and Liquid Telecom built the first local nodes for Microsoft Azure in Cape Town and Johannesburg.

However, they are certainly not the only data centre providers after the business of the world’s biggest technology companies.

Internet Solutions, Xneelo, and Telkom are just some of the world-class data centre operators in South Africa that could compete to host nodes for the largest cloud providers in the world.

It is clear then why Liquid Telecom would want to guard any advantage it may have over competitors for as long as it can.

Network modernisation project

Liquid Telecom recently unveiled its network modernisation project, which saw it dramatically increase the capacity available in its core network.

Reshaad Sha, the CEO of Liquid Telecom South Africa, said that the upgrade gave Liquid ten-times more capacity across its entire customer base.

When asked how much capacity Liquid Telecom had in its core after the network upgrade, Sha said that before the upgrade they had a “high water mark” of 90% network utilisation.

Having such high utilisation of available network capacity is a bad thing. It limited the ability for Liquid to grow its network or absorb sudden surges in traffic.

Sha stated that after the upgrade, Liquid’s capacity utilisation is in the single-digit percentages. There is also room for Liquid to light up even more capacity on its fibre network should it need to.

“[It’s] a lot of capacity,” Sha said.

When pressed for more information on the technology used to upgrade Liquid’s core network, Sha did not provide a specific answer.

Sha explained that their core network upgrade currently gives them a competitive advantage, and they don’t want to reveal to competitors how they got that edge.

“We want to be able to deliver that large capacity to multinationals… [such as] hyperscalers and CDN providers,” Sha said.

“It is easier for us to compete if we keep the advantage we have private.”

While Sha could not name the big companies Liquid Telecom has its eye on, there are only a handful of large, multinational hyperscale cloud providers in the world: Amazon, Google, Microsoft.

China’s Huawei and Alibaba Cloud are also aggressively expanding to compete with US cloud giants.

Huawei launched its first data centre in South Africa at the beginning of March 2019. The Huawei Cloud data centre is located in Johannesburg and is being leased from a local partner, the company said.

Microsoft launched its Azure data centres in South Africa a day later. They are located in Johannesburg and Cape Town.

Amazon has announced that it will open data centres in South Africa in the first half of 2020. The AWS Africa Region will be located in Cape Town and consist of three availability zones.

Now read: What local AWS and Azure servers mean for South Africa

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The fight for Big Tech money in South Africa