Kenya’s data centre market is expected to generate over $100 million (Sh12.5 billion) by the end of 2027 driven by the country’s growing e-commerce, a new report says.
The Kenya Data Centre Market Outlook to 2027 report released by research and advisory firm Ken Research reveals that the growing demand from SMEs coupled with increasing internet penetration has placed the country’s data centre market on a growth trajectory.
The report further says that an improvement in network connectivity, government support and targeted growth in the adoption of big data and the Internet of Things (IoT) are some of the factors that can be tapped to speed up the growth.
A data centre is a facility that centralises an organisation’s shared IT operations and equipment for the purposes of storing, processing and disseminating data and applications.
Among notable names in the local market include Africa Data Centres (ADC), Pan African IX Data Centres Kenya Limited (PAIX), IX Africa and icolo.io.
According to the report, new entrants are set to significantly accelerate market expansion in the coming years by meeting the demands of regional businesses and cloud service providers.
“Nairobi and Mombasa are the booming data centres market which continues to attract heavy investment as internet and mobile data usage continue to grow,” reads the report.
Last month, ADC received a Sh3.7 billion in funding from the US government to expand its Nairobi-based data centre in a development that will see the existing facility’s capacity swell to an extra 15 megawatts (MW) of IT load up from the current 5MW.
The growth, the report notes, is set to open opportunities for e-commerce vendors with innovative delivery solutions to expansively explore the country’s underdeveloped transportation and distribution infrastructure.
Mobile money and its subsequent integration with formal banking systems have seen the number of Kenyans with access to electronic financial services grow rapidly in recent years pointing to an even larger potential in the local e-commerce landscape.
President William Ruto’s Kenya Kwanza regime has set an ambitious plan to lay an additional 100,000 kilometres of national fibre optic cable in efforts to speed up Internet connectivity across the country.
The government has also announced plans to set up 1,450 digital hubs across all Kenya’s wards as well as 25,000 free Internet hotspots in major markets across the country to facilitate e-commerce.