The data center industry is evolving in Kenya with the development of largest hyper-cloud ready campus of East Africa’s in Nairobi

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1. COVID-19 has accelerated the usage of data resulting in increased demand for internet facilities as well as storage capacities.

There was sudden boost in online communication platforms like Zoom, Skype, FaceTime and Google Hangouts because people spend more time at home to avoid the spread of coronavirus. As many employees have started working from home, cloud services have become essential to ensuring they can access their work materials remotely. The convenience and security of cloud services have increased their popularity immensely. During the pandemic, as people spend more time cooped up at home, they have turned to online music and video streaming services for entertainment. This further increased the growth of Data Center Market post COVID.

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2. Shifts in creative media content towards content delivery networks, cloud services, AI and the roll out of 5G are driving the demand for data consumptions

Additional data consumption will be considerably supported by shifts in creative media content toward Video Delivery Networks (CDN), such as YouTube, Netflix, Amazon Prime, and gaming solutions, as well as the anticipated move to 4K and 8K content. Using wireless connectivity with medical devices like blood pressure cuffs enables artificial intelligence to enable speech recognition, decision-making, and language translation in addition to these other capabilities. Businesses of all sizes will increasingly adopt cloud-based services as the standard. While business is moving quickly to the cloud, this is likely to be hindered by hybrid IT solutions that combine cloud, colocation, and on-premises solutions to provide cost-effective IT solutions.

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3. Demand for BFSI and IT sector in Kenya is driven by local and international businesses’ with growing adoption of cloud-based services, and rising data usage.

Data center networks provide secure, stable, and high-quality connections to accelerate digital transformation, simplify the customer journey, and improve digital operational efficiency at banks and financial service companies. With the advent of mobile money and integration with the formal banking systems, the number of Kenyans with access to electronic financial services has grown rapidly. Online transaction has been used to offer medical insurance, microloans, transfer money to a pre-paid credit cards and others. Thus, benefit in overall growth of Data Center Market in Kenya.

4. Due to the presence of 19 DC facilities, the Kenyan data center market is anticipated to earn more than $ 100.0 Mn in revenue by the end of 2027F.

Atos and other multinational IT service providers intend to build data centers at the Mwale Medical and Technology City (MMTC) in Butere, Kenya. Large AI clusters are being built for healthcare and agriculture, which will open up opportunities for Kenyan engineers and businesspeople in the data center sector. In the upcoming years, new players will significantly accelerate market expansion by meeting the demands of regional businesses and cloud service providers. Additionally, due to a readiness to make payments online or through a mobile money account, e-commerce has a lot of potential in Kenya.

For more insights on the market intelligence, refer to the link below: -

Kenya Data Center Market Outlook to 2027F: Ken Research

Kenya Data Center Market is forecasted to grow further into USD ~130.0 Mn opportunity by 2027F: Ken Research

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The development of the Kenyan data center market will be largely influenced by factors such as increasing demand from SMEs and increasing internet penetration rates in the country.

Robust growth of data centers: More than half of African online shoppers came from Nigeria, South Africa, and Kenya. Over the past few years, e-commerce in Kenya has grown dramatically, especially among small and medium-sized firms, which has aided in the expansion of data centers in the area. Additionally, the industry expanded as a result of the increased investment in Kenyan data center companies. The Kenyan data center market experienced rapid expansion as a result of rising digitalization, cloud-based technologies, big data analytics, and the use of smart devices.

Increase in Cloud-Based Services and Shift Towards CDN: Businesses of all sizes are increasingly adopting cloud-based services as the standard. While business is moving quickly to the cloud, a hybrid solution that combines cloud, colocation, and on-premises solutions to give cost-effective IT solutions is likely to have an impact. The predicted move to 4K and 8K content, together with shifts in creative media material toward Content Delivery Networks (CDN), such as YouTube, Netflix, Amazon Prime, and gaming solutions, greatly support increased data consumption.

Digital Transformation with Critical Connectivity Across East Africa: Kenya is undergoing a digital transition, and Nairobi, Africa's "Silicon Savannah," is teeming with technopreneurs and international corporations looking to profit from the country's and the region's technological and digital change. The most connected data center facility in East Africa is East Africa Data Centre, which is situated in Nairobi's Sameer Industrial Park. Due to its accessibility to carrier networks throughout the area, it is referred to as the "ideal hosting location".

Lack of focus from foreign investors: A large amount of electricity is required for data centers. Government support is necessary to meet Africa's needs for data center infrastructure in terms of water, land, and power. However, the Eskom situation is not being effectively managed by African countries. In addition, one of the main problems in Kenya's data center business is a lack of investment. Kenya is the least connected country in the world, which causes foreign investors to give it little attention.

Analysts at Ken Research in their latest publication “Kenya Data Center Market Outlook to 2027F - Growing Demand from SMEs, Rising Internet Penetration Rate and Rising Number of Facilities to Drive the Kenyan Data Center market in the near future” observed that Kenya Data Center Market is in a growing phase. Improvement in network connectivity, government support, and rapid growth in the adoption of big data, and IoT services are some of the factors that will contribute to the Kenya Data Center market growth over the period of 2022-2027F. It is expected that the Kenya Data Center Market will grow at a CAGR of 21.6% for the above-forecasted period.  

Key Segments Covered in the report

      Kenya Data Center

• By Vertical
• Managed
• Co-Location
• Hyperscale

• By Type of Co-Location
• Retail
• Wholesale
• by End User Industry
• BFSI
• IT/ITES
• E-Commerce
• Government
• Others

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Key Target Audience

• Data Center companies
• Cloud providers (Domestic and Global)
• Managed data center companies
• Co-location data center companies
• Private Equity and Venture Capitalist
• Industry Associations
• Data Center Constructors
• Technology providers

Time Period Captured in the Report:

• Historical Period: 2017-2022
• Base Period: 2022
• Forecast Period: 2022-2027F

Companies Covered:

• io
• IX Africa
• Africa Data Centers
• PAIX (Pan African IX Data Centers Kenya Ltd.)
• Safaricom
• Telkom Kenya

Key Topics Covered in the Report

• Market Overview and Genesis of Kenya Data Center Market
• Cross Comparison of the DC Market in Kenya with Other Countries (Based on Market Stage, Competition, Number of Data Centers, and Major regions)
• Market Size Analysis, 2017 to 2022
• Market Segmentation of Kenya Data Center Market
• End User Analysis Kenya Data Center Market
• Challenges and Bottlenecks in Kenya Data Center Market
• Enablers & Growth Drivers in Kenya Data Center Market
• Trends and Developments in Kenya Data Center Industry
• Reseller Mechanism in the Data Center Market in Kenya
• Competition Framework of Kenya Data Center Market
• Pricing Analysis of Kenya Data Center Market
• Impact of COVID-19 on Kenya data center
• Future Outlook of Kenya Data Center Market
• Case Study
• Analyst Recommendation

For more information on the research reports, refer to below link:

Kenya Data Center Market Outlook to 2027F: Ken Research

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