Regulation and Law

Kenya Needs a Well Coordinated Data Centers Investment Policy and Strategy

The growth of online content consumption fueled by the trinity of cheaper smart phones, social media and 4G is evident everywhere you look. Your average mama mboga, office workmate, spouse is today a regular consumer and producer of content such as video clips, photos (mostly memes) and posts to social media more often. The popularity of Facebook, Instagram, TikTok, WhatsApp, YouTube, video and audio streaming such as Netflix, Showmax and Viusasa says it all.

This therefore means that content providers need to ensure higher levels of service quality by improving their systems to cope with the demand and deliver the expected experience. One example is that these days YouTube Videos rarely buffer like they did 6 years ago because YouTube is storing those popular videos in Nairobi and not in a data center in Europe or the US.

This drive to deliver a good user experience by the providers means that they have to depend more and more on the public cloud infrastructure. This infrastructure is run by cloud providers such as Google, Amazon Web services (AWS), Microsoft, Alibaba, and many more. These cloud providers on the other hand, lease data centers (DCs) from private investors such as the Africa Data Centers and iColo.
The reason why these content providers use the public cloud is because of how it is designed to be fault tolerant and always avail services at the expected quality.

Cloud Infrastructure 101

The public cloud is designed in such a way that cloud services are provided as close to the consumers as possible without compromising service levels and availability. To do this, cloud providers have points of presence where they avail cloud services from. These points of presence are region based, so there would be Asia North region, Asia South, Africa North, Africa South, Europe East etc. Within these regions, they have city regions or zones. For example Africa South region can have Capetown, Durban and Johannesburg zones.
Within these zones they have data centers that are at least 60miles apart from each other and interconnected with high speed cables. To ensure high availability, many cloud providers usually have at least data centers in a zone. so using the example above, there would be three data centers in Durban area separated by at least 60 miles, same for Capetown and Johannesburg

Is Kenya ready?

With the example above, it means that for Kenya to be attractive to cloud operators, we must invest in DCs in a way that will make it attractive for providers seeking reliable infrastructure to provide content from. At the moment, when I take stock of our status, I believe there is room for improvement in as far as preparing the country to being a destination to cloud providers. The location of current DCs and future planned ones doesn’t inspire confidence on the service reliability from these DCs by would be customers.

The Africa Data Center- ADC at Nairobi (Mombasa road) is by far the best run and largest data center in East Africa, closely followed by the iColo data centers in Mombasa and Nairobi (Karen). Safaricom also runs a Data center in Thika town. There is ongoing investment by Huawei and a local partner in a Data center in Mombasa and also the government DC in Konza that is currently in makeshift modular structures as a proper one is being set up.
All these are investments in the right direction, but I think we are dragging our feet as far as investing in world class data center services is concerned. I sometimes imagine what the situation would be if all the Kenya’s empty malls investors had put money into DCs instead? We would become the regional cloud hub for East and Central Africa by virtue of having a more stable economy and political climate and better infrastructure and power supply by far.

Kenya needs to coordinate and catalyze the investment into data centers by private investors for example by giving tax concessions and incentives to anyone investing in a DC at a predetermined location or region. By this I mean that government policy makers can map out how Kenya can coordinate the investment into DCs to ensure that we become attractive to the large cloud players.

This year, Microsoft and Google announced that they intend to be carbon free by the year 2030. By this they mean that their services will run off offices, data centers and networks that rely 100% on renewable energy sources. This of course means that will stop using coal power and opt for greener sources such as solar, wind and geothermal. With Kenya sitting in a region where all these are abundant, there is no reason why Naivasha should not turn from a flower town on the decline into the DC capital of Kenya. Its closer to EA regions than Mombasa, has abundant geothermal and a lake to cool the DCs. Instead, Djibouti is eating Naivasha’s lunch as it’s fast becoming the regional DC go-to city.

The reason I am calling for central coordination on this is because so far, the investments have been driven by other factors other than suitability of the DC locations in relation to other nearby DCs and the investment levels have also been very low. For example, the iColo DC in Karen is too close to the Africa DC on Mombasa road, this doesn’t meet the minimum distance DCs should be separated from each other. A natural disaster or major power outage on Mombasa road would likely affect Karen but not Thika town or Mai Mahiu town where I think the next DC in ‘Nairobi’ zone should be.

With content consumption expected to grow even faster with the adoption of 5G, cloud computing as we know it will also slowly morph into a hybrid of true cloud and edge computing. In the later, the content is hosted very close to the user than before. In the Nairobi case, instead of the content being hosted in a DC on Mombasa road, it would also be hosted in multiple locations near consumers such as at mobile base stations or nearest malls that will offer DC space for Edge computing services.

Please don’t get me wrong, I am not calling for regulation of the DC space in Kenya per-se. I am calling for government incentives akin to the Export Processing Zones (EPZ) concept but on DCs. So as an investor, I stand to gain tax breaks for example if I build my DC at Makindu town to supplement the DCs at Konza. I am however free to chose where I also think I should set it up as long as I am compliant to the existing laws and makes business sense. Saying that Konza Technopolis will answer my call above is missing the point as we cannot have all DCs located in one place. They will not be attractive to customers seeking high reliability and availability of services.

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