Microsoft’s Azure Cloud Data Centers Expands to South Africa

Cloud computing giants Microsoft and Amazon are setting their sights on Africa, a continent that until recently was largely bypassed by the data center building boom elsewhere across the globe.

Microsoft said Wednesday that its opening two new cloud computing data center “regions” in Cape Town and Johannesburg, South Africa. Data center regions consist of interconnected data centers that are designed to provide computing resources to companies and organizations in the surrounding area.

Although many big enterprise technology companies already operate in South Africa, Microsoft claims it’s the first one to open a major cloud data center region in South Africa akin to the ones it operates in the U.S.

In 2017, Microsoft announced its planned data centers in South Africa, saying at the time that they would be ready in 2018. But the opening was delayed until this year.

Jason Zander, Microsoft’s executive vice president of Azure, declined to specially explain why, but emphasized that “there are a lot of moving parts” and that some customers have already been running their corporate infrastructure in the new facilities as a test, or preview.

Several other companies also plan big cloud or technology initiatives in Africa. Amazon said in October that it would open an AWS data center region in Cape Town during the first half of 2020. Meanwhile, Huawei said its new cloud computing facility that is leased from a local provider is now operational in Johannesburg. Google, which doesn’t currently operate an African data center, opened an A.I. research center in Ghana last year.

Companies are investing heavily in Africa because of the potential economic growth of the continent as Internet connectivity expands in rural areas. Zander said that Microsoft projects that spending in South Africa on cloud resources would triple in the next five years from an unspecified number and that cloud computing could end up creating 112,000 new jobs by the end of 2020. That number counts not only jobs at Microsoft, but also third-party companies including startups because the data centers make it easier for them to build apps and setup their corporate infrastructure.

“As soon as you have an Internet connection, then you will be able to leverage the cloud,” Zander said.

Microsoft declined to comment on how many Microsoft jobs the new South African data centers will generate in the area. Generally speaking, data centers employ a few dozen workers.

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Zander declined to address why so many technology companies other than Microsoft are investing in Africa, only to say that Microsoft has “invested in the continent of Africa for a long time.” The new data centers represent Microsoft’s “continued expansion” in the area that involves a lot of “heavy construction” and spending, Zander said.

“It is not something that one can simply snap your fingers and you’re good,” he said.

Some of the companies and organizations that will be using Microsoft Azure, the name for the company’s corporate cloud services, include African financial services firm Nedbank, the conservation group Peace Parks Foundation, and a water and sanitation service for a local municipality.

The Azure cloud computing is the first product available from the new data centers. Office 365 work software suite will be available in the third quarter while Dynamics 365 business apps collection will go online in the fourth quarter.