Microsoft Enters Africa
Africa is catching on with technology as many countries as adopting computers and cloud in a big way. The widespread work of many private organizations, philanthropists and nongovernmental organizations have helped to eradicate poverty and illiteracy in many communities, and this new generation of educated people are turning to technology to improve their lives and those of others in their communities.
With such a trend, it’s only natural for all major companies to make a bee-line to this continent to tap into the new and growing opportunities it presents. Microsoft has announced that it will be opening two data centers here by next year to serve customers who use the Azure cloud platform. This will be one of the largest data centers ever in this continent and Microsoft plans to open them in Johannesburg and Cape Town, both located in South Africa.
The choice of location is a little disappointing from a technology adoption point of view. South Africa is the most developed country in the African continent and has one of the highest rates of literacy. Also, there’s much economic development happening there already. Microsoft could have chosen a developing economy to boost their presence and impact on the local markets.
In their defense though, Microsoft would argue that it’s the nest choice from an economic standpoint. South Africa is a stable nation with plenty of educated workforce, so the data centers are more likely to be safe and secure here. In addition, cloud growth is happening more in this country than other areas in Africa.
According to Data Corp International, the renowned Research Firm, cloud revenue in South Africa was a mere $243 million last year, but is expected to grow by an annual rate of 20% a year through 2021. Considering these numbers, it’s only fair that Microsoft cater to this growing market before expanding to other regions within this continent.
Like Microsoft, Alphabet and Amazon also have been working to capture this potential market, but none have so far opened a dedicated operational center in this continent yet. In this sense, Microsoft has a lead over the other two. But, we can expect both Alphabet and Amazon to follow suit soon.
Reports show that these three major companies combined together have $31.54 billion in 2016 alone for capital expenses and leases. This is a whopping 22% more than what these companies spent in 2015. Though not every penny was spent on cloud infrastructure or data centers, a substantial part of this investment went into their cloud computing line of business.
This entry of Microsoft marks a new beginning for Africa and hopefully it can act as a catalyst for this continent to develop more rapidly. We can hope that these companies will soon move beyond lucrative countries like South Africa and spread their operations in poorer countries too, in order to give every community a chance at development.
Overall, this is a positive move that could transform Africa, like it did for many Asian countries that were grappling with many social and developmental issues.