Mid this year, American company, Roha Group, through their subsidiary- First Brick Holdings (FBH) announced construction of their Raxio Data Centre – the first of up to 5 data centres planned in the East and Southern Africa region by 2022. Raxio Data Centre Ltd in Uganda – is currently under development and is scheduled to commercially launch in 2019. We caught up with James Byaruhanga, the Raxio General Manager to tell us more about the data centre business and what benefits it ushers in for the economy.
In lay man’s terms, define what a carrier neutral data center is.
It’s a data hosting or IT environment that’s not attached specifically to a given telecom carrier or internet services provider or an owner that’s already participating in the telecom business. It’s open to anyone to be able to either bring in their own IT equipment or host infrastructure so basically it’s neutral. It’s not biased and ensures the widest choice of suppliers and therefore, the best quality of service.
If you had to get this service from telecom operator, there is as much flexibility. It doesn’t quite give the same opportunity to people to utilize it. Sometimes it is restrictive on the service provider that you can use and it is always perceived as this telecom’s thing or that ISPs ‘thing’. Carrier neutrality is important, so as to allow customers to choose which telecom to use for connectivity or which provider to use for which hosted service etc. In summary, carrier neutrality means the right to choose.
But isn’t there already a right to choose?
Not necessarily. If you’re, for instance, in a telco specific data center, you have to use only their infrastructure, their fibre connections and their cloud service. So you’re there on their terms and at their prices and effectively locked in. But here it’s a competitive environment so people can choose what prices to charge and then they compete with each other. So you can have your main connectivity option with one carrier and back-up with another.
It’s up to you really.
Why do you think Raxio’s investors chose Uganda first before other countries in the region?
First, because there is currently no Tier III carrier neutral data center in the country so the opportunity is good. Secondly the digital transformation is taking over on all fronts of this country. Everything is moving from traditional manual systems to more digital systems. The need for business critical systems is also increasing. Gone are the days when companies didn’t care too much about service uptime. Now there’s too much opportunity and the market is highly liberalized so every business has too much competition. There are over 25 banks, over 70 insurance companies and or brokers. Uganda has the highest number of telecom operators in Africa, the hotel/hospitality sector is bustling; everything is highly liberalized.
With all this liberalization, then you have competition in the quality of service rather than just having the offering. Having business continuity is now no longer an option, it is a must have. That creates an opportunity for facilities that can ensure this happens.
There has also been significant movements on the e-government front. If you look at traditional documents that we used to have here or government requirements such as driving permits, IDs, passports, national voters registers etc., they are all digitized. So there is a need for the service; it’s no longer an option, so the timing is just perfect.
Is there anything for the telecom operators themselves that you can offer?
First of all, they will be getting new business which they probably didn’t have before and secondly they get to benchmark their competitors in the market because they will know what they are offering since they compete for the same customers.
Three; they will get access to an enterprise market that they don’t have right now since many customers may not even know they need disaster recovery services. Telecom companies can now offer disaster recovery as a value added service. They can offload value added services to a given location, and keep their core business at their primary sites. So if I already have a link to a data center like Raxio in this case, I can decide what else I want to offer e.g. do I want to offer a hosted antivirus solution so that a large enterprise like a bank doesn’t have to go and buy an individual antivirus solution for each of the laptops or desktops but rather use a hosted service which might be cheaper and more efficient, manageable and stable?
Who is set to benefit from the Raxio data center?
Pretty much everyone will benefit.
One of the key benefits of data centers like ours, is the idea of shared infrastructure which ushers in economies of scale that drive lower operating costs for all involved. If I have a service or products installed somewhere and I can share it across as many customers as possible, then per unit cost to the person should basically drop.
If you look at the last consumer who is a normal average person, the same thing applies. They will benefit and get increased value for themselves. Whether it is hosted email or applications that people can utilize, the consumer gets to benefit from that because the services get closer to the consumer.
If you look at the internet perspective, pricing will drop because the internet gets closer to the consumer. The cost of the internet, which is what many people don’t understand is why they pay. What you pay for is not the internet but the transit or transport or both. Let’s say you’re trying to send an email or trying to read news online, what is actually happening is that between your device and where the information is sitting, there are many layers in between so you pay for the layers and transporting (request and receipt) between the two devices.
The further away the information is, the more expensive it gets because there are many more people in between. So if you can reduce the number of people in between and get the information to sit nearer to the requesting device, then the cost becomes a whole lot less. Now for you to be able to bring that content nearer, the person or hosts of the information must be confident that when they set up the content, the infrastructure here is stable and won’t crash.
What makes it difficult for them to come now is that the environment isn’t available so they opt for Nairobi or South Africa or Dubai where it is available meaning that you still need to pay for the cost of transport from Kampala to there. So if we can bring the environment closer, then the price drops because we’ve cut out international transit.
For the SMEs, what we are trying to do is lower the cost of entry and the cost of access to world class IT infrastructure. SMEs typically have issues with capital and it’s difficult in this market to get access to credit and loans. Without enough capital, they can’t get their hands on adequate systems which can allow them to be competitive in the market place. With shared services, SMEs can have critical systems such as hosted email addresses, websites, accounting systems etc.; basically get access to all IT infrastructure/services that the big companies have, at an affordable fraction of the cost. What shared infrastructure systems do is enable these SMEs to access the same services at an affordable rate. So it’s an enabler for the SMEs.
For the larger corporates, they are more concerned about reliability and business continuity in case anything goes wrong; what will happen to their customers and business? How safe is their confidential business data? So they need a back-up plan. The SME guy also gets this but on a shared platform
In today’s competitive world, customers expect 100% availability of services. You can’t afford to tell your shareholders and or customers that you have lost information or that your critical systems are down 40% of the time. It’s no longer an option. Whether it’s hotels, internet banking, ATM machines, you name it. It’s 24 hours. I can’t drive to a game park and they tell me “our internet is down so we didn’t get your booking”.
For government, it’s a different requirement as well. It’s moving from manual systems to digital systems. Everything is evolving. There’s need for collaboration between systems. If I’m looking at someone’s passport I need to be able to tell where he is born, where he stays, what car he drives, etc. so the systems have got to be integrated. It’s no longer a case of them being comfortable with one of each. So now the deliberate effort is to see can I give this guy one card that serves all purposes instead of several cards? This card, should be able to tell where he/she stays, voter register number, driving permit, you name it.
Historically, when you’d go to for example the lands office looking for a land title, they’d look for it physically. Now when you go there, you just give in your name and plot number and they’ll just type into the computer and get all your details. In future, when our great grandchildren are looking for these documents, they will not be looking for physical files.
What impact will the data center have on security solutions in the country?
Like I said earlier, the Raxio data center is really is about providing an operating environment for mission-critical processes and applications to run in, safely, securely all of the time. Allowing for big data handling, should be able to enable easy integration of all government databases, so that as to establish usable data trends and analyses.
Once this integration happens, and then it is safely and securely stored in a place like the Raxio data centre, where it can be retrieved anytime, then cases of missing files and documents should be a thing of the past.
The availability of ready to use big data will make for example make case solving very easy. For example integrating National ID data with that obtained at issue of driving permit and the data that will be harvested from the cameras being installed under the Safe City Project and other similar security institutions will make it easy to solve crime. If there is a hit and run accident for example, police can easily look at the footage and do facial and car number plate recognition and be able to know who the owner of the car is. This creates the safe and smart city. The only way this can make sense is if the systems can work together.
So imagine an eco system where you have a driver’s permit, passport details, voters register, national ID, all integrated together. But for this to work, there must be a provision for safe storage and retrieval of data.
Under the Safe City project for example, there is supposed to be a camera at almost every junction and busy street. All these will be taking pictures and videos 24-7. For a city of over 3 million day-time population, that’s a lot of data in a year. The challenge isn’t only in the amount of data collected but also making sense of it when you need to do some sort of analysis. If someone asked how many cars come into the city today, we don’t know. If the guys of KCCA or UNRA need to do some planning around how many new roads to open for instance, they need to be able to access and process this data to know how many roads we need to accommodate it. So the information and analytics need to sit somewhere in order for the government to make the right decisions. So the need for data centers is really across the board, both because of the sheer volume of data and because of its criticality and this is just one example of how many others are required.
How secure will the information stored with Raxio be?
This is built to the highest international standards, as a secure facility right from the gate- we are looking at 7 levels of security before you get to the servers. It will only be accessible on appointment and with pre-validated levels of security clearance. Our role will be to protect the facility and our operating systems of the facility. Anything to do with malware protection for the information itself will be handled by the customers directly as it is their data.
At what cost will organizations secure Raxio’s services?
It’s not a one size fits all type of service so cost will depend on the customer’s needs and demands.
What other investment opportunities or gaps have you identified in the IT sector in Uganda that you intend to service in the coming years?
Although our data centre is built with the future in mind, with expansion possibilities up to 3 times its original capacity, we are looking at possibly a secondary data center in the future, that could serve as a back-up site for customers who have their primary data in the first data centre. So we are looking at a geographically dispersed back-up data center for instance in Entebbe type of location because Entebbe is broad or Masaka depending on how much power there is.
We are keeping track of the evolution of technology and thinking about the internet of things and how it can plug into the data center. We’re thinking about blockchain and how it can plug into the data center and how to support the people that work with big data as an evolution, whether to participate directly or work with people trying to do this and of course cloud as a whole. Our main strategy is to be neutral so we most likely will work in a partnership structure but the main thing is that the cost of internet is dropping so fast that Uganda is catching up with the world faster than a normal evolution path. Now the main thing is for us to ensure that the environment is available for all these things to happen.
Any other remarks
You really can’t fight change. The more you resist the internet revolution, the further you lag behind and it’s now critical for businesses to be able to leverage technology to keep competitive. So just get in with the programme. Figure out how you can leverage technology in your own business and be able to better serve your customers, create competitive edges and overall be more efficient.