To cut the costs of doing business; some firms, including telecoms giants, are building their own data centres. LUCAS AJANAKU writes on the benefits and challenges of the concept.
He is determined to reduce operating cost (Opex) by about 50 per cent. To actualise his dream, his firm is building a data centre in Agbara, Ogun State.
Chief Executive Officer of Venema Advies Nigeria Limited, a subsidiary of the Venema Advies Group, Dick Venema, said energy expenditures account for almost 80 per cent of firms’ information communications technology (ICT) Opex.
He said: “The cost saving is achieved from a company’s own in-house infrastructure. A firm can reduce its cost by between 40 and 50 per cent because, first of all, it is shared power. That is, infrastructure is shared, culminating in reduction in energy cost.
He stressed, ‘’in Nigeria, it is estimated that power accounts for about 80 per cent of operating costs. So, in the data centre, everybody shares power facilities. Everybody shares UPS and the broadband facilities. Ultimately, this dovetails into substantial redution in cost. Indeed, the cost saving element could be more than 40-50 per cent,” he said.
Like a damned river suddenly losing its fetters, international IT firms are opening up data centres in the country.Vodacom Nigeria Business, Business Connexion, telecoms firms such as Globacom, MTN and other firms have opened data centre shops. Even those not having data centres in the country such as Oracle Corporation have offshore data centres where their clients in the country host their data.
A data centre, according to Wikipedia, is “a facility used to house computer systems and associated components, such as telecommunications and storage systems. It generally includes redundant or backup power supplies, redundant data communications connections, environmental controls (such as air conditioning, fire suppression) and security devices.”
According to experts, the future of data market in Nigeria will develop fast, especially when it is considered that the economy is growing at six per cent yearly. Its market will grow twice that number. Though it is a foreign technology, Nigerians are gaining more knowledge about it. The market will grow by about 12 per cent yearly and in the next five years, it will notch between 60-70 per cent.
But it’s cumbersome to put a figure to how much the technology will add to the national gross domestci product (GDP).
“It is pretty difficult to say because everything is so concentrated on the data centre. It is not known how many people will start programming mobile application because it is now available in Nigeria. It is difficult to calculate how much the data business will add to the GDP but around that technology, people from all over Nigeria will start programming application and earn money. It is difficult to estimate the number but this will be in several hundreds of million of dollars,” he told The Nation.
He said data centres will continue to be at the heart of businesses as email, Customer Relationship Management (CRM) programme and everybody settles online. Nigeria has about 119 million mobile phone subscribers. With the expansion in the subscriber number is also the expansion in mobile braodband as people move their lives, from wallet (mobile money) to e-health, e-education and others to their mobile phones.
“Everybody is busy with one’s traditional system server and in-house devices. This will change radically. The growth of mobile devices, mobile telephony (remember that the total connected mobile telephone lines in Nigeria is about 120 million, according to the Nigerian Communications Commission (NCC)).
‘’This is a tremendous growth opportunity for data centre business. Tied to this is the boom in mobile internet and the rising market of mobile applications developers,” the data centre expert said, adding that the push of the Communications Technology Ministry at building software incubation centres in the country would also add a fresh fillip to the boom in data centres in the country.
According to a senior banker, banks have been facing financial difficulty in building data centres. “To build a data centre, we will need a minimum of N300million. What the Central Bank of Nigeria (CBN) is encouraging us to do is infrastructure sharing. In Spain, I saw a massive data centre built which all the banks are sharing,” the bank chief said.
Another variant of data centre services is cloud data centre. It is constructed for a different purpose; created at a different time than the traditional data center and built to a different scale.
The cloud data centre has different costs than the traditional data center (such as buying land and construction).
Group Executive, Business Development, Director BCX Group, John Jenkins, said the uptake of the technology in the country is improving.
“We were surprised to see very significant demand for cloud services in large enterprise customers. Larger Nigerian enterprises are clearly leapfrogging their lethargic global competitors by going directly to cloud based IT service models and not taking the traditional long voyage to cloud adoption,” he said.
He said the technology is built on IT infrastructure, virtualisation tools and automation applications and of course the Internet. “So, if Nigeria is willing to get behind cloud services in a way that they take the lead in West Africa and further, Nigeria will develop world-class network engineers, systems integrators and application developers. I cannot see why Nigeria cannot compete globally when it has the right location, lots of entrepreneurship, submarine cable bandwidth, competitive labour rates and a supportive government and labour legislation,” he said.
But security has been an issue for these technologies. Opinions are divided over thie matter.
Jenkins said: “All of the same threats still exist, malware and phishing attacks among others, for which companies must deploy security solutions to defend against. Still, this doesn’t mean that data security should be completely ignored when migrating.
“The justified concern about security stems from the fact that most providers are Internet Service Providers and free services companies who enable IT services where security is the responsibility of the client.”
Venema said security does not have to be a problem as long as the appropriate decisions from the engineering phase to the execution of the data centre are taken.
“You have to calculate risks. But essentially for our data centre, physical security is the most important for the people we will host their services. It is important that they develop resilient security system so that all online transaction will be protected.
‘’I advise banks and other fianancial institutions to look to the PCID system certfification. I advise Nigerian programmers to take the issue of security seriously in the course of designing their programmes. There is enough information now availalble for people to write secure software and deploy secure payment system. So, I think Nigeria can make the difference,” he said.
Former Country Manager, Micorosoft Anglophone West Africa, Emmanuel Onyeje, and Oracle Corporation, Country Manager, Layo Ajayi, argue said there is no need to fear. He added that as long as people open email addresses and use same platfrom and exchange information, there is a measure of data storage in the virtual space.
But as operators scramble to build more data centres, Venema warns: “Location is very important in building data centre. During an extensive risk analysis, you will see that not every location is suitable for a data centre. For instance, Lekki in Lagos is flood-prone. Sometimes it is just not good enough to be very close to the city.”
He blamed the telcos for investing in data centre businesses, saying they lack the technical know-how to run them.
