Data Center - South Africa

South Africa

Revenue in the Data Center market is projected to reach US$1.21bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$0.73bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 4.67%, resulting in a market volume of US$1.52bn 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

Region

Region comparison

Currency

Analyst Opinion

South Africa has been experiencing a noticeable growth in its Data Center market, reflecting a global trend towards digital transformation and increased reliance on cloud computing solutions.

Customer preferences: Customers in South Africa are increasingly seeking secure and reliable data storage solutions, as well as scalable infrastructure to support their growing digital needs. This mirrors a broader shift in the global market towards data centers that offer high levels of security, energy efficiency, and connectivity options.

Trends in the market: One of the key trends in the South African Data Center market is the rise of colocation services, where multiple customers share space within the same facility. This trend is driven by the cost-effectiveness and flexibility it offers to businesses of all sizes. Additionally, there is a growing demand for edge computing capabilities in South Africa, as businesses look to reduce latency and improve the performance of their applications.

Local special circumstances: South Africa faces unique challenges in terms of power supply and connectivity infrastructure, which directly impact the Data Center market. The country has been investing in improving its electricity grid and internet connectivity to support the growing demand for data storage and processing capabilities. Additionally, regulatory requirements around data sovereignty and protection play a significant role in shaping the Data Center landscape in South Africa.

Underlying macroeconomic factors: The development of the Data Center market in South Africa is also influenced by broader macroeconomic factors, such as GDP growth, foreign direct investment, and technological advancements. As the economy continues to grow and businesses invest in digital technologies, the demand for Data Center services is expected to increase. Moreover, South Africa's strategic location as a gateway to other African markets positions it as a key player in the regional Data Center landscape.

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.