As Microsoft Unveils Datacenters in Africa, Price War Heats for MainOne, RackCentre, Vodacom and MTN

As Microsoft Unveils Datacenters in Africa, Price War Heats for MainOne, RackCentre, Vodacom and MTN

I discussed the Cloud business in Nigeria last year. I noted the positions of MainOne, MTN Cloud, Rack Centre and Vodacom.

There are four main cloud providers in Nigeria –  MainOne, MTN Cloud, Rack Centre and Vodacom. Two of these companies, MainOne and Rack Centre, have cloud services as one of the key components of their businesses. Sure, MainOne sells bandwidth, delivering connectivity services, but cloud service is a key business. MTN is known for its voice telephony and the broadband services, across Nigeria and beyond. Vodacom Nigeria is largely there to serve enterprise customers, since it is not operating any voice telephony service, yet.

In that piece, I dropped these lines: “Amazon is coming. It is never a good thing when Amazon comes into town or in any sector, globally and locally. They have this ruthless business efficiency model that makes everyone look lost”. Interestingly, instead of Amazon arriving first, it is Microsoft Azure that won the race into Africa on datacenters. Yes, Microsoft has opened first datacenters in Africa with general availability of Microsoft Azure.

Simply, the challenges of latency will disappear and many companies will have options now that hosting is in Africa. This is a game-changer in a market where most startups and non-regulated companies prefer Amazon, Google and Microsoft, over their local competitors. Also, with the datacenters in Africa, Azure will help many firms overcome compliance issues which require data to be stored locally; local cloud firms have used that compliance provision to keep some businesses. With that localization advantage gone, expect price war to heat up, in the sector, as local players will have to reduce price to compete.

Today, Microsoft announced the opening of its first datacentres in Africa, with the general availability of Azure from the new cloud regions in Cape Town and Johannesburg, South Africa. This makes Microsoft the first global provider to deliver cloud services from datacentres on the continent, which will help companies securely and reliably move their businesses to the cloud while meeting compliance needs.

“Microsoft Azure is now available from our new cloud regions in Cape Town and Johannesburg. The combination of Microsoft’s global cloud infrastructure with the new regions in Africa will create greater economic opportunity for organisations in Africa, accelerate new global investment, and improve access to cloud and internet services,” says Yousef Khalidi, corporate vice president, Azure Networking, Microsoft.

The Challenge before MainOne and Rack Centre

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