Teraco CEO Jan Hnizdo on building new data centres in South Africa

Teraco recently announced it was building a second data centre facility in Cape Town, called Teraco Cape Town 2 (CT2).

The new 30MW facility follows the company’s recent announcement of a 60MW expansion of its Johannesburg data centre campus in Isando.

Teraco CEO Jan Hnizdo said the investment in the facility is driven by the growth of cloud in the region – resulting in increased demand from cloud providers, enterprises, and sub-sea cable operators.

To find out more about Teraco’s expansion plans for South Africa, MyBroadband spoke to Hnizdo.

Which specific factors encouraged Teraco to open a new data centre facility in Cape Town?

It was a combination of factors. Teraco’s first Data Centre facility (CT1) was established in Cape Town some 11 years ago in Great Westerford.

We have had multiple expansions over the last 11 years. Our most recent expansion is in the process of being completed, but once filled, we won’t have the ability to further expand as we have maximised the power available to us in the building.

Our new facility is being built with longer-term planning in mind to provide sufficient capacity for the more medium to longer term. These facilities take close on two years to develop, so this is being built with 2022 and beyond in mind.

We see increased demand from enterprises who have existing data centre or computer room infrastructure. Many of these facilities are end of life and need to be expanded, upgraded, or made more resilient.

For many CIOs it does not make sense to further invest in non-core data centres, especially when more and more key work streams are being moved into the cloud.

We see many financial services and other enterprises moving into the hybrid deployment world where some of their processing is moved into a public cloud environment and the rest of the processing moved into a private cloud environment.

One where the private cloud deployment is being moved into a facility like Teraco’s which enables lower-cost access to and ease of connecting to global cloud providers, managed service providers, content providers, and telcos.

We have a deep and rich ecosystem that makes Teraco very attractive from a deployment perspective. We also see demand increasing from key content providers, be it social media, search, or streaming, where quality of service is key and they wish to move their key content nodes closer to the end-user to allow for more efficient distribution and better overall user experience.

Going forward, can we expect to see more data centres built in South Africa to not only serve the local market but the rest of Africa?

Yes. We are also busy at present expanding the campus with Phase 2, additionally, I have no doubt that we will see more data centres being built in more African countries.

There are new developments being built in Nigeria and Kenya, and many more regular announcements over the last year from other African countries. We see data centres expanding on the continent over time.

Cape Town

How has NAPAfrica handled the large increase in traffic over the past two months?

We have seen a huge capacity spike driven by work from home and increased content streaming.

We have been working together with a number of the large key global Internet exchanges and global content providers to ensure that capacity constraints are mitigated on NAPAfrica.

To this extent, we had heavily invested in the exchange a few weeks prior to lockdown by upgrading our core and backbone infrastructure to deal with spikes in traffic.

What impact are the COVID-19 pandemic and lockdown having on South Africa’s data centres, in terms of dealing with expansion/maintenance plans which need to be carried out?

COVID-19 is presenting challenges, even from a day-to-day operating perspective. We have introduced various health and safety and operating protocols to ensure we are able to continue to provide services in an uninterrupted way.

To this extent, we have split our operating teams into Lions and Leopards, have increased cleaning protocols, sanitizers throughout, but most importantly we are enforcing screening on entry.

We have deployed screening stations at all our facilities to enable health-related screening and temperature checks.

These protocols are extended to our expansion areas.

With the nationwide lockdown causing large increases in broadband usage and remote working being punted as a long-term play for companies, what role will data centres play in ensuring South Africa “stays online” and adapts to more a more digital way of working and living?

Data centres play a massive role since they are at the core of the meeting of content, cloud, and connectivity. Working from home is only one component of that.

Prior to COVID-19, there was already a massive drive towards digital transformation, be it through cloud, hybrid deployments, remote working, and content streaming.

All these trends are likely to accelerate as enterprises start to accelerate their digital migrations paths that they were already on.

Data centre REITs have seen strong growth in the US, and are a popular investment choice. Do you think more data-centre focused investment vehicles will become available in the future, particularly for South Africans?

The market is fairly niche and the US data centre REITs are all global players.

The South African market would not be big enough for focused investment vehicles – investing in overseas REITs would be the better alternative from an investment perspective.

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Teraco CEO Jan Hnizdo on building new data centres in South Africa