{"id":559624,"date":"2021-01-27T03:45:13","date_gmt":"2021-01-27T03:45:13","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/egypts-data-landscape-pt-ii-whats-driving-data-center-growth\/"},"modified":"2021-01-27T03:45:13","modified_gmt":"2021-01-27T03:45:13","slug":"egypts-data-landscape-pt-ii-whats-driving-data-center-growth","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/egypts-data-landscape-pt-ii-whats-driving-data-center-growth\/","title":{"rendered":"Egypt\u2019s data landscape Pt II: What\u2019s driving data center growth?"},"content":{"rendered":"

<\/a> Egypt\u2019s data landscape Pt II: What\u2019s driving data center growth?<\/strong> Late last year Hardhat looked at Egypt\u2019s existing data infrastructure<\/a>, and found that its current cluster of data centers is not enough to transform it into a regional \u2014 or even global \u2014 data hub. This could be changing though, with Telecom Egypt set to start work on Egypt\u2019s largest center and several international firms establishing facilities of their own. Egypt itself is playing an important role in the African data center market, which is expected to grow at double the rate of the global average by 2025. But what is driving this growth?<\/p>\n

We have major data centers under construction, <\/strong>including the New Capital facility<\/a> being built by Orange \u2014 which is set to host over 400 servers \u2014 in cooperation with industry vendors including Dell EMC, Cisco, and Nokia, Orange Egypt\u2019s Chief Enterprise Line of Business Officer Hisham Mahran tells Enterprise.<\/p>\n

One of these \u2014 state-owned <\/strong>TE\u2019s Smart Village data center<\/a><\/strong> \u2014 would be considered hyperscale, <\/strong>says one source speaking off the record, adding that it will be Egypt\u2019s only hyperscale data center once it\u2019s up and running. The data center is expected to be commissioned in early 2021, and will have access to all the global submarine cable systems that land in Egypt. It\u2019s set to have 1600-2000 racks, but TE hasn\u2019t disclosed how many servers it will house. Hyperscale facilities usually have<\/a> a minimum of 5000 servers linked with an ultra-high speed, high fiber count network. They require at least 1000 racks (approximately four megawatts of electricity), another source previously told Enterprise.<\/p>\n

More hyperscale data centers are exactly what Egypt needs to become a data hub, <\/strong>sources indicate. They\u2019re essential for attracting Cloud Service Providers (CSPs) and OTTs (streaming media services offered directly to viewers via the internet).<\/p>\n

Meanwhile, TE\u2019s future plans span investment in infrastructure, and more international partnerships,<\/strong> the company says. TE is investing in new subsea landing stations and crossing routes, and new subsea stations, the company says, without giving details on the size of these investments. It plans to have 12 landing stations and 12 diversified routes by 2022 \u2014 up from the 10 stations and routes it already owns and operates \u2014 as well as setting up international nodes (connection points) in countries including Jordan, Singapore, Italy, and France.<\/p>\n

And hosting content:<\/strong> TE plans to set up more colocation data centers, in addition to the six it currently owns and operates. And it intends to set up more partnerships with global organizations, similar to its existing partnership with Microsoft offering Egypt Azure cloud services, and sign more agreements like its existing ones with Subspace<\/a>, Zenlayer<\/a>, and Wangsu Science & Technology<\/a>, to deliver online content.<\/p>\n

Egypt already has some significant advantages driving overall data center growth, <\/strong>which could encourage more companies to set up hyperscale data centers here: <\/strong><\/p>\n

#1- \u201cIdeal\u201d geographic positioning:<\/strong> Egypt links Europe with Asia, so data traffic currently has to pass through us to get from one continent to the other. Under the right circumstances, this could make Egypt the Suez Canal of data traffic, say multiple sources, including former ICT Minister Khaled Negm. \u201cEgypt is a prime location for potential hyperscale data centers,\u201d says Sherif Elmasry, managing director of tech company Cornet Elevated<\/a>.<\/p>\n

#2- Our abundance of internet submarine cables: <\/strong>A total of 13 subsea cables land in Egypt, and data then crosses the country through the 10 subsea landing stations and 10 diversified land routes owned and operated by TE. As an internet subsea cable hub, Egypt is the natural conduit for data traffic, which could enable us to become a data hub, says Youssef Amin, market data director at Egypt for Information Dissemination (EGID)<\/a>, a joint venture between the Egyptian Exchange (EGX) and NASDAQ, which owns and operates one of Egypt\u2019s 13 colocation centers. Subsea cables are usually owned<\/a> by telecom operators, or sometimes by content providers like Facebook and Google, with smaller players renting bandwidth. The large number of subsea cables passing through Egypt should allow us to bolster capacity and bandwidth, we reported in July 2020<\/a>.<\/p>\n

#3- TE\u2019s participation in projects like the 2Africa submarine cable project:<\/strong> TE is teaming up<\/a> with seven other big-name parties to lay a giant 37k-km subsea cable \u2014 one of the world\u2019s largest \u2014 linking Europe (via Egypt), the Middle East (via Saudi Arabia) and 16 countries in Africa. TE is present in over 60 countries, delivering \u201ca complete range\u201d of telecom services across continents, representatives tell Enterprise. In 2018, TE signed an agreement<\/a> with Liquid Telecom to complete a fiber optic network to connect southern African countries with the rest of the world. It also signed an MoU<\/a> to expand and service submerged fiber optic cables in the region. And a recent agreement between TE and Google (pdf)<\/a> will grant Google capacity<\/a> on TE\u2019s Mediterranean submarine cable, TE North. The project is expected to go live in 1H2021.<\/p>\n

#4- Surplus electricity and the relative affordability of data center construction:<\/strong> Egypt\u2019s surplus electricity<\/a> offers ample resources for energy-intensive operations like data centers, says Amr Farouk, who heads up the Future of Data Centers summit. Electricity generation capacity stands at around 58 GW<\/a>, but peak demand ranges from 30-32 GW. Egypt can also provide cost-effective technical and operational support to data center construction, Farouk adds.<\/p>\n

#5-<\/strong> New data protection laws:<\/strong> Laws covering data protection and cybercrime are important in attracting investors, and with the recent ratification<\/a> of the Data Protection Act<\/a>, Egypt now has that vital legal framework, Farouk believes.<\/p>\n

But will this be enough to fulfil Egypt\u2019s data hub ambitions? Not alone,<\/strong> say sources. So far, the landscape is still too small to be a hub. The only way to leverage our advantages is by making the infrastructure more cost-effective and reliable \u2014 in part, through private sector-government partnership, they argue. We discuss this in detail next week.<\/p>\n

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