Can you tell us more about the Data center operations, what you do there and how it helps the economy?
Generally, when we look at data center, we realize that today we are growing into the knowledge economy and information age. Before now we did not have need for so much information, because the market was not ripe for it. When you talk about knowledge economy, you are talking about mobile applications, e-banking, and online surfing. So there is a lot of information. For instance, banks have access to your information. In fact, there is no boundary anymore; everywhere you go there is information. Those information need to flow and be kept somewhere; so data center comes in within the ecosystem. Data centers, basically, are structured controlled computer rooms where you provide cooling, power and security for all your equipment. Data center is a place where all your information is stored and connectivity is provided to the network.
What does it take to set up a Grade A data center and why did you decide to go into providing the Grade A type?
The first reason is the need of our customers. We have a target market consisting of companies and large enterprises that want reliability and availability for their system. There are certain businesses that cannot afford a down time. For instance, banking today is 24/7 and no longer 8 to 5. The same way, service in the oil industries requires availability 24/7. Every minute counts for them. We considered those spaces and our parent company provides connectivity which is also 24/7. Hence, we understand the need for reliable data center that is always available 24/7. That is why we decided to address that business. Our customers that fit into this are banking industries, oil companies, and so many businesses that require 24 hours services. We have OTT (Over the Top) operators which require 24/7 highly available data centers for their businesses.
There is always this confusion about MDXI and MainOne; we would like you to tell us whether it is a subsidiary of MainOne or a separate company.
MDXi is a brand name of a company named Main Data Nigeria limited. It is separately registered under the Corporate Affairs Commission (CAC). MDXi is also a fully owned subsidiary of MainOne that is focused on providing Grade A data center co-location and cloud services across the West African region. The product line is different from that of MainOne.
MDXI appears to be the current data center project you have or are there others?
We have other projects. When we started in 2015, we started with the Lekki data center which we commissioned in the year 2015. At that time it had an investment of about $25 million. Between 2015 and 2017 we invested another $10 million in expansion to second quarter. This year, 2018, we are investing another $6.8 million which is about N2.5 billion. You saw those equipment the last time we went there. Altogether, we have spent close to $40 million. We expect that by the time we are doing the final expansion fitting out we would be spending about $3.2 million. The projection for the Lekki data center is $41 million.
We have Shagamu coming up which is our second project. We have commenced work there in January this year. We have a projection of fourth quarter (Q4) this year or Q1 2019 depending on a couple of things. Shagamu is going to be a different approach. We have a large campus of 4.5 hectares of land and we intend to have a full campus in there.
Apart from Shagamu, we also have Accra, Ghana. Of course you know our parent company has operations there, we have some marine cable. Just like this place started with some of customers coming in to say you have provided reliable connectivity can I also put in my equipment in there and I will have one less thing to worry about. That is also what is driving the Accra data center. We are starting collocation business this year 2018 in Accra.
We also have Cote d’Ivoire. It is part of our expansion project planned for 2019 and we have actually started planning applications. We are also going to Senegal.
The whole idea of the roll out and the coverage is for us to be the reliable partner in West Africa not just providing the reliable connectivity that our parent company has but also to this regional interconnection point across West Africa so that we can offer services to our customers.
Why the growing investment in data center?
Firstly, it is the upsurge in the use of ICT. Today everyone has internet. Mobile Broadband is growing; everyone now surf on their phones even the lowest type of phones. There is also the migration towards the digital economy. We have bloggers now who do their work online. Also, we have the E-governance initiative and the ease of doing business which the Federal Government is embarking on; of which the parent company, MainOne pioneered. Then, there the many other initiatives of government, like the ID card, the biometric, and voting which is also driving the quest for data center. The other thing is that enterprise business are looking for a more efficient way of delivering services to customers so much that today you can no longer go into a banking hall to make transfer or transactions as all transactions are done from our phones. This also drives the quest for data center especially collocation and cloud services.
How many data centers can effectively cover a country 36 states with a population of 180 million?
Data center, generally, is a function of so many things and I would not look at it from population or geographical spread. Rather, I would look at it from digital adoption to project the number of data centers required. Where we are today as a country; when you go to the ministries you see people still doing paper work. No matter how big we are, if we still do things in the traditional way then we really do not need data centers. But if you want to move to the real digital economy where things are done seamlessly like in other parts of the world, for a population of 200 million people depending on the capacity of the foot print, we would need much more than about a million rack space of data center for us to be able to meet up with what we need as a country and advance forward.
Some countries like the UK and India have national data center. What level of involvement is required of the government to help the uptake of data centers in Nigeria?
Firstly, it is adoption. The federal government or the government of any nation needs to first adopt the digital method which is the new way of doing things as it would cut all inefficiencies away and secondly, we would have reliability because then the information is available when it is required. People do not need to travel to Kano from Abuja. The government should adopt the digital way of doing things, one that would encourage the use of data centers and off course penetration.
Also, government as regulators also need to ensure that apart from adopting that method of working, make a regulation that Nigerian information must reside in Nigeria. Those countries you referred to got to where they are today because of regulation. Without effective regulation in terms of both setting up the law and enforcing the law, it will not work. With that people would be forced to localize. Today more than half of Nigeria’s information is hosted outside the country which exposes us to a lot of risk.
Can you tell us some of the risk of leaving your information outside the country?
Talking about the risk of getting your information out there, the Snowden situation and the wikileaks show that governments monitor a lot of online information. By hosting data offshore, other country’s intelligence agencies can gather critical information and possibly instigate an attack. When you have people’s information, you can manipulate them. There is also security, when your information is in the hands of the enemy, he can use it to his advantage.
Another thing is job creation. Government says it wants to create job opportunities but if the government does not enable businesses like this how can it create jobs because when you allow the ecosystem work within Nigeria it would drive job creation?
How can growth in data center services help broadband penetration in Nigeria?
Like I mentioned, connectivity is one thing the information you are passing across is another. With broadband you can pass large amount of information or data across. So if the data centers are encouraged in Nigeria and the data’s domiciliation is available, it means that if the National Bureau of Statistics (NBS), for instance, needs any information they can get it anywhere they are. For example, if the information is available in Abuja and it is needed in Lagos it means connectivity is strengthened and so connectivity needs to spread. Then someone would see the need to engage in providing connectivity and of course you would have more operators coming in to provide the connectivity and more people in the data center thereby expanding the data centers.
We are in the age of third platform, people are talking about internet of things (IoT), cloud services, how do you help your clients especially those in the tech ecosystem grow the digital economy?
To help the digital economy, there is a part which the operators and the government need to play. Big data analytics, IoT, would depend largely on data center and connectivity. From the point of data center, we have big enterprise data centers. As operators we also need to look at what I call the Edge Data center. These are smaller data centers which would be closer to the users. Tomorrow we would have self drive vehicles, smart homes that would depend on data from one point to the other; it needs to be close to the users because of latency issues. This means that MDXi in Lekki might not be enough so there is going to be another data center. One will be in Ikeja and another one in Victoria Island. We need to continue to invest.