Data Center - Kenya

Kenya

Revenue in the Data Center market is projected to reach US$589.20m in 2024.
Network Infrastructure dominates the market with a projected market volume of US$245.10m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 6.93%, resulting in a market volume of US$823.70m by 2029.
In global comparison, most revenue will be generated in the United States (US$123.20bn in 2024).

Key regions: United States, Germany, India, Japan, China

Definition:

The Data Center market is a critical segment of the technology industry focusing on supplying and managing physical infrastructure necessary for hosting and operating IT systems, primarily servers, storage, and network equipment. This market spans from traditional in-house data centers to sophisticated facilities offered by specialized providers, covering services like hosting, shared data center facilities, and managed data center solutions. It targets a diverse client base, ranging from small businesses to large enterprises, offering flexible, scalable solutions for their IT infrastructure needs. This sector is integral to the efficient functioning and security of IT operations in various organizations.

Structure:

The Data Center market is structured in three markets based on the services model provided by the companies.

The Server market covers the resources and services related to servers, integral for hosting websites, managing databases, and supporting cloud computing.
The Storage market covers the resources and services related to data storage systems, crucial for archiving, data backup, and ensuring data recovery.
The Network Infrastructure market covers the resources and services related to network hardware essential for ensuring connectivity, data transmission, and network security.

Additional Information:

The Data Center market includes revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Market values represent revenues paid to primary vendors at the manufacturer price level either directly or through distribution channels (excluding VAT). Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in the Data Center market include companies such as Dell, HPE, Huawei, and Ericsson.

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Market

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Analyst Opinion

The Data Center market in Kenya is experiencing minimal growth, influenced by factors such as slow adoption of digital technologies, limited health awareness among consumers, and challenges in online health services. This is reflected in the sub-markets of Servers, Storage, and Network Infrastructure.

Customer preferences: With the rise of e-commerce and remote work, there is a growing demand for reliable and secure data storage and processing solutions. This has led to an increase in the adoption of data centers in Kenya, driven by the need for efficient and cost-effective digital infrastructure. Additionally, with the country's growing tech-savvy population and advancements in technology, there is a shift towards cloud-based solutions and managed services, reflecting a preference for convenience and flexibility in data management.

Trends in the market: In Kenya, the Data Center Market is experiencing a surge in demand for cloud computing services, driven by the increasing adoption of digital technologies and e-commerce. This trend is expected to continue as more businesses and organizations shift towards digitalization and remote working. Additionally, there is a growing trend of green data centers, with companies investing in renewable energy sources to power their data centers. These trends are significant for industry stakeholders as they present opportunities for growth and innovation, while also addressing environmental concerns. However, the rapid growth of the market may also lead to challenges such as infrastructure limitations and cybersecurity risks.

Local special circumstances: In Kenya, the Data Center Market is experiencing rapid growth due to the country's strategic location as a gateway to East Africa. With a high demand for digital services and a growing tech-savvy population, the market is also bolstered by the government's initiatives to improve internet connectivity and promote the adoption of cloud computing. Additionally, Kenya's supportive regulatory environment and favorable tax incentives for data center investments have attracted foreign companies to set up operations in the country. This unique combination of factors has positioned Kenya as a key player in the African data center market, driving its growth and development.

Underlying macroeconomic factors: The Data Center Market in Kenya is influenced by macroeconomic factors such as technological advancements, government support, and investment in digital infrastructure. Countries with favorable regulatory environments and strong investment in digital technologies are experiencing faster market growth compared to regions with regulatory challenges and limited funding. Additionally, the increasing demand for data storage and processing capabilities, driven by the growth of digitalization and e-commerce, is fueling the growth of the data center market in Kenya. This is further supported by the country's stable economic growth and growing investments in ICT infrastructure.

Methodology

Data coverage:

The data encompasses B2B enterprises. Figures are based on hardware-related expenses of businesses for setting up and maintaining an IT infrastructure.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports and national statistical offices. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of digitization. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques, such as exponential trend smoothing and the S-curve function, is based on the behavior of the relevant market.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.