South Africa: Amazon Web Services and Google to Extend Their Footprint in South Africa

Due to strong investment incentives, Africa’s internet access is growing at one of the fastest paces in the world. Africa’s youthful population and rapid urbanization are strong drivers of digitalisation demand.

Africa has the world’s youngest, fastest-growing, and increasingly urbanized workforce, which is driving a rapid increase in its consumption of online services. Increased connectivity, in turn, creates more opportunities for innovative entrepreneurs with new technologies. However, digital transformation can only be fully realized if high-quality access to communication networks and services is made available at affordable prices.

Accelerating the type and pace of investments into digital infrastructure in Africa will be critical to ensuring the growth of Africa’s economies and livelihoods for years to come.

  • Two of the biggest players in the cloud space, Amazon Web Services (AWS) and Google, are planning to enhance their presence in South Africa.
  • Retailer Pick n Pay migrated its entire on-premise information technology infrastructure to Amazon Web Services (AWS).
  • On the other hand, Google is planning a cloud region in Cape Town with a data centre likely to be housed inside an upcoming Africa Data Centres (ADC) facility.

Two of the biggest players in the cloud space, Amazon Web Services (AWS) and Google, are planning to enhance their presence in South Africa.

Amazon and its cloud computing arm AWS have announced opening a new office in Johannesburg. The office will aim to bolster South Africa’s burgeoning cloud market and provide a range of cloud-based services to organizations of all sizes.

AWS says that the new office continues Amazon’s growing investment in South Africa, which began in 2004 in Cape Town with the launch of a development centre to pioneer technologies focused on networking, next-generation software for customer support, and software programs used by AWS, among other technologies.

Mobile cellular coverage in Africa, referring to the percentage of the population that lives within reach of a mobile cellular signal, is estimated by ITU to be at 88.4 per cent. Just over 77 per cent of the population is now within reach of a 3G signal, and 44.3 per cent is within reach of a long-term evolution (LTE) mobile broadband signal.

The percentage of individuals using the Internet increased from 24.8 per cent in 2017 to 28.6 per cent by the end of 2019, with households that have Internet access at home increasing by 0.1 percentage points from 14.2 per cent in 2017 to 14.3 per cent by the end of 2019.

Both fixed and mobile broadband markets have shown some growth over the last four years, with active mobile broadband subscriptions outpacing fixed broadband subscriptions.

According to an article by IT Web, Peter DeSantis, senior vice-president of global infrastructure and customer support at AWS said: “We have a long history in South Africa and have been working to support the growth of the local technology community for over 15 years. During that time, builders, developers, entrepreneurs, and organizations have asked us to bring an AWS Region to Africa. Today, we are answering these requests by opening the Cape Town Region. We look forward to seeing the creativity and innovation that will result from African organizations building in the cloud.”

In 2020, Amazon launched the Africa (Cape Town) Region, the first AWS Infrastructure Region in South Africa. However, plans for the construction of a new Cape Town-based Amazon Africa headquarters were blocked earlier this year by the Cape Town High Court as Amazon had allegedly not gone through the proper process to acquire the land.

Meanwhile, retailer Pick n Pay migrated its entire on-premise information technology infrastructure to Amazon Web Services (AWS).

In a statement, AWS says Pick n Pay worked with Lemongrass Consulting, an AWS Premier consulting partner with migration and SAP Consulting Competencies, to migrate its on-premises SAP environment to AWS and implement a modern SAP HANA platform.

According to the US-based cloud computing giant, moving to the cloud will enable Pick n Pay to streamline its operations and modernize the supply chain network for its stores, develop new digital customer experiences in omnichannel grocery, and expand into new areas of business.

Chris Shortt, chief information and technology officer at Pick n Pay said: “Leveraging the cloud to achieve greater operational efficiency and improved customer experiences is a game-changing strategy for Pick n Pay and the South African retail sector. The cloud will help us stay relevant and accessible in a high-volume, low-margin marketplace that demands efficiency above all else.”

“In addition, the new cloud-based business intelligence platform enables us to make even more data-driven decisions that can help us deliver lower prices and more value to our customers,” he added.

The retailer uses AWS cloud services, including computing, storage, databases, analytics, and business intelligence, and AWS Marketplace to automate Pick n Pay’s operations, deliver real-time insights, and identify and purchase AWS Partner Network offerings.

According to AWS, the retailer can forecast demand by analyzing data in the cloud, identifying customer patterns and sentiments, and improving customers’ in-store and online shopping experiences.

“We are seeing a fundamental change in how consumer goods companies run their technology infrastructures,” says Chris Erasmus, country manager of South Africa at AWS.

“Pick n Pay is the first South African retailer to join the thousands of customers that run SAP on AWS.

“We look forward to working with Pick n Pay on its SAP and digital transformation strategies that will help speed the introduction of new cloud-based customer experiences like its mobile app, tailored shopping, and personalized offers that deepen the consumer relationship.”

On the other hand, Google is planning a cloud region in Cape Town with a data centre likely to be housed inside an upcoming Africa Data Centres (ADC) facility.

The Data Centre Dynamics website says the 20MW facility will cover 15,000 square meters in eight data halls. Work is set to start on the site in the last quarter of 2022. Completion is scheduled for the end of 2023.

In March 2019, Chinese telecommunications giant Huawei started offering its cloud services in South Africa. The company is leasing a data centre in Johannesburg from a partner, from where it is deploying localized public cloud services based on local industry policies, customer requirements, and partner conditions.

US-based enterprise software company Oracle in September same year also announced plans to launch data centres in South Africa. Google is the last of the major US cloud players to enter the South African data centre market. This, however, is rather timely news given that Google’s new Equiano cable linking Portugal to South Africa went live last week.

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