Q&A: Teraco

Lex van Wyk, CEO of Teraco, on the significance of the cloud for business, the state of connectivity in SA and why digital infrastructure should be centralised

Q&A: Teraco


Q: SA generally has poor connectivity yet is praised for its IT services. Why is there such a disparity?
A: The state of connectivity in SA has improved dramatically over the past four years and we are now seeing a true convergence of IT services.

There are currently multiple undersea cable operators and low-latency, high-quality network infrastructure operators from which clients are able to choose. With continued growth in underlying ICT infrastructure, Africa has become an attractive market for the distribution of IT services. An ever-growing appetite for content and applications by consumers is uncovering new revenue streams and increasing margins.

However, due to the lack of reliable power and infrastructure in Africa, an opportunity exists to establish Southern Africa as a central hub from which international connectivity and cloud service providers are able to support the balance of the continent’s needs.

Q: What is the current status of big data in SA – is it sufficient, what is the ideal and what are the challenges?
A: Big data is here and growing. Having matured in significance over the years, big data is no longer just about the amount of data captured but rather what to do with it.

This means that the value lies in how companies choose to use this information to make better-informed decisions, improve or completely change client experiences, while also looking at ways to reduce costs and improve business efficiencies. However, one of the challenges – and this is where Teraco is a notable colocation provider – is data management. As a result of big data, virtualisation has become a significant trend and as a data centre, Teraco plays a vital role in assisting clients with implementing a virtualisation strategy onsite.

Q: What market growth is expected?
A: Connectivity and broadband adoption is one of the foundational drivers of the demand for colocation services. While penetration remains broadly low, access has become more pervasive. Indications are that the African broadband market is in its early phase of expansion and at the very inception of the age of data.

In a recent report that looked at the future of mobility in Africa, indications were that the mobile data user base is set to more than double over the next five years. Penetration of the mobile base will reach approximately 60% and within the next two years (by 2017), it is anticipated that Africa will have more 3G/4G data subscriptions than 2G data subscriptions. Likewise, it is estimated that 70% of mobile data subscriptions will use 3G at a minimum by 2020 – up from 35% in 2014 – with around half a billion subscriptions actively driving data traffic.

Better metro connectivity will also have a positive impact. Adequately priced fibre was once one of the most significant obstacles to business connectivity in Africa. Today, nearly all central business districts in SA’s largest urban economic centres are well served by fibre to their buildings. While prices remain high, clients can now obtain line connections in excess of 100 Mbps, with the requirements for gigabit connections becoming more common.

Price points remain a challenge but metro competition is helping. Johannesburg, Cape Town and Durban currently have a dozen fibre providers, and are able to offer metro fibre connections.

In most of Africa’s largest economies, at least two-thirds of businesses with 50 staff or more have a broadband connection. Penetration in smaller businesses is also accelerating, largely thanks to easily accessible mobile broadband. Businesses are slowly but gradually adjusting to the digital era and this is evident in the way they market goods and services, interact with their clients, and produce services. This is Africa’s digital age.

Q: How can ISP services be expanded and improved on for the future. And how is Teraco planning to cater for developments in this regard?
A: Teraco is currently building a second site in Isando that will more than double its capacity in Johannesburg, which is currently 4 000 m2. Offering 16 MVA of power and storage of 130 000 litres of diesel, Teraco is catering for demand as its current site is approximately 90% utilised. By offering more white space in its Isando campus, Teraco enables clients from all business sectors to join its highly connected community.

Financial colocation clients will naturally benefit as they have access to the lowest latency service, e.g. in the heart of the internet. Aside from benefiting from guaranteed uptime and security, clients can also peer at NAPAfrica – Africa’s largest IXP [internet exchange point]. NAPAfrica is four times the combined size of the entire continent’s exchanges and services multiple countries regionally, including SA.

ISPs and other clients benefit from the existing client base at the IXP, as well as the other services we offer. The benefits of peering at NAPAfrica go beyond pricing or convenience. It is a strategic decision that holds immense value for each member in terms of cost savings and access to content.

There is no doubt that being part of this impressive local and international network will assist businesses to grow successfully.

QnA2 PQ3

Q: Describe what Teraco’s Cloud eXchange provides for SA businesses?
A: Teraco is Africa’s only vendor-neutral data centre and once construction is completed in December this year, we will also be the continent’s largest data centre. In being a cloud-neutral data centre, Teraco – while it does not offer cloud services – will provide introductions to any of its colocated cloud services providers within the cloud ecosystem.

As the most connected data centre in Africa, with in excess of 6 000 physical cables running in the buildings and growing exponentially every month, our clients can easily connect to multiple service providers and countries within a single infrastructure deployment. No longer will a client need to install high capex infrastructure in multiple countries where it may not be secure or have unreliable infrastructure. Clients can truly centralise their infrastructure to service multiple markets, not only in Africa but globally.

They also have direct access to low-latency service providers, cloud operators and the largest content operators such as Akamai, Google, Microsoft, CloudFlare and Netflix. This service, known as the Teraco Cloud eXchange, offers a low-risk entry point for cloud providers to host their platform in the most connected and resilient data centre environment in Africa.

With direct access to African terrestrial fibre and satellite connectivity providers, submarine cables and an open market for interconnection, cloud providers are now able to distribute their services to more than 50 African countries with a single deployment. Other benefits include free peering through NAPAfrica, cost-effective interconnects, access to all licensed local carriers, major international carriers, significant content providers, SLA-guaranteed resilient power, 24/7 support and the highest levels of security.

Q: What is Teraco’s Cloud eXchange’s coverage/penetration in Africa and how will Teraco grow this service?
A: A client can service the entire continent directly from Teraco by working with multiple African carriers such as Seacom, WIOCC, Openserve and Liquid Telecom. Through Cloud eXchange, we continue to support large content players investing in Africa, and it remains the fastest environment in which to connect to any cloud provider, operator, ISP or services integrator.

No longer will a client have to wait weeks, months or even years to connect to their operator of choice – it now takes just 72 hours to be up and running with any of our clients.

Q: How important are fast, sophisticated data centres to development of the cloud in Africa?
A: The advent of the cloud is driving growth and further significance of data centres. There is a definite move towards using colocation data centres rather than duplicating infrastructure resources –evidence of which lies in Gartner’s predicted growth of $107 billion between 2013 and 2017. We see this in the enterprise, where organisations are heading towards Layer 3 IT strategies and making a decisive move away from capex to opex, which is essentially a pay-per-use model.

Cloud-neutral data centres are probably one of the most important criteria for the delivery of a successful cloud strategy. Leveraging the network and services of an existing data centre ecosystem to build a unique service delivery solution makes the evolution to cloud so much easier. We already have in excess of 20 cloud providers in our ecosystem that take advantage of the low-cost interconnect pricing, pay-as-you-go pricing and high availability.

The ability to interconnect with other providers and specialist cloud service providers is critical to business growth and cloud strategy leverage, especially for clients wanting to access white label services to expand their own offering. Being in a neutral data centre immediately provides them with a key competitive advantage and gives them prominent positioning in the cloud.

Cloud infrastructure is more than just a service – it is multifaceted and involves many different, yet codependent layers. It calls for expert knowledge of your business and application requirements. It will address support from hardware, software and services perspectives and in a combination of public, private and hybrid clouds.

If a cloud strategy is to be considered, then clients need to understand their future power and connectivity requirements, and have a plan for where future revenues will come from.

Utilising leading providers of infrastructure for cloud computing is not a nice-to-have but a necessity.

By Kerry Dimmer
Image: Matina Steyn
 Lindsay Cockcroft