Managing Director of Rack Centre, a Tier 111 Data Centre service provider, Mr. Ayotunde Coker, spoke with Emma Okonji on the company’s business model targeted at raising the confidence of business owners. Excerpts:
The Minister of Communications, Adebayo Shittu, during his recent visit to Rack Centre facilities in Lagos, stressed the need for organisations to host their data in Nigeria. How will hosting of big data in Nigeria impact on the Nigerian economy?
Like the minister rightly said, the hosting of data outside Nigeria by organisations operating big data in Nigeria, amounts to economic waste.
The minister has condemned the rate at which corporate organisations and some government agencies, export their data outside the country for hosting in foreign lands. He said such foreign hosting of data constitutes monumental economic loss, running into billions of naira, and this is true. We have good data hosting centres in Nigeria and Rack Centre is one of them, and we operate a Tier 111 data centre that is certified by UpTime Institute, which is a global body for data centre certification. Organisations operating in Nigeria can get good value when they host their data with us in Nigeria and this will save them a lot of money and it will also boost government revenue generation.
The minister commended Rack Centre for its world class Tier 111 Data Centre, which he said, could be matched in standards and quality, with foreign data centres.
He said organisations like Rack Centre needed the encouragement of Nigerians and the Nigerian government to increase its data centre capacity to accommodate more data from other organisations and government agencies, in order to discourage Nigerians from hosting their data outside the country.
However, we still have a lot of organisations, including government agencies that still host their data outside the country when we have a world class data centre at the Rack Centre that addresses all security issues associated with data hosting. Millions of naira have been lost to Nigeria in the area of exporting data outside the country for hosting purpose, according to the minister.
The minister needs to be commended for his observation and comments on the need to host local data locally, which I agreed with him, will save Nigeria and organisations a lot of money.
The minister talked about government support for organisations like Rack Centre. What is your organisation doing to win customers confidence in hosting their data with Rack Centre?
We have a business model that is focused at measures that will help raise the confidence of business owners in Nigeria to believe in the Nigerian project and invest in Nigeria. The model is about adding value to customers’ business and making them see reasons why they should invest in Nigeria, instead of investing outside Nigeria. For example, some organisations that operate big data prefer to host their data outside Nigeria, which the minister has expressed his displeasure about. We are working on our expansion plan to ensure that we have enough capacity to serve as many organisations that are willing to host their data in Nigeria. Recently we doubled our capacity from 199 racks to 225 racks to enable more organisations host their data with Rack Centre, and we are still expanding.
We can also expand our capacity to 600 racks, depending on demand, because we have the facilities to do that. Going forward, we intend to build a world class data centre capacity of over 3000 racks in the next four years. We have the blue print and we can to provide that capacity for the country.
Jagal Group, which is our parent company, is committed to continually increase the capacity of the Rack Centre as it views data as being strategic to the development of Nigeria and other African countries.
So what is your impression about the minister’s visit and what value has the visit added to your organisation?
We were truly delighted that the minister visited us and made a tour round our world-class facilities. According to the minister, he was surprised at the facilities he saw during the tour, because he never expected to see a world-class Tier 111 Data Centre in Nigeria. The value he brought is that he was able to tell the world through the media that there is a standardised world-class data facility centre at Rack Centre. He said of all the data centres that he had visited, ours is the most sophisticated that he has ever seen. His visit is a call for technology infrastructure development in Nigeria.
For example, the Internet Exchange Point of Nigeria (IXPN), which hosts all local internet traffic in Nigeria, has its data hosted in Rack Centre and not many people know that Rack Centre has a lot of capacities to host data. So the visit of the minister has helped to make this known and clear to people.
How do you assure your customers of data security, when you actually offers collocation services that allow customers to share infrastructure?
We have ten levels of security at our data centre premises, beginning from the gate to the final rack in the centre. Again we backup our rack systems and at every point, there are secured access control and biometrics and we have the CCTV footage being recorded everywhere. Any operator that comes to our centre will be rest assured that we do not compromise our security and it is second to none.
Apart from physical security, we also have in place, a well – connected software security that addresses issues of connectivity.
How economical is it for organisations to build their own data centre to host their data privately?
It is possible for organisations that have the money to build their own data centres and host their data privately, but it is not economically viable in the sense that it is capital intensive to build and operate than to allow the data to be managed by operators like Rack Centre. For us, security is key and we will encourage organisations to host their data in a collocation centre where security is guaranteed, instead of spending so much money in building and maintaining a data centre.
What is the economic value for business owners that decide to host their data with Rack Centre instead of building theirs?
We have a framework where we sit down with the operators and we do a cost benefit in all of these, and they have since discovered that it is more cost effective to collocate with existing data centre than building and managing data centre. In the first instance, it takes not less than 18 months to set up a facility that will host big data. Waiting for 18 months will not allow any operator to focus on their core business.
What is the relationship between Rack Centre and the Jagal Group?
The Jagal Group is a parent company of Rack Centre and it has invested in diversified businesses in Nigeria, including the Niger Duck, Atlantic Aviation, Information and Communications Technology (ICT), among others. Everything Jagal does is about world-class and it has a global touch in all its businesses in Nigeria.
How can economies meet the demand for technology growth?
There is no industrial economy in the world that actually succeeds without core Information Technology (IT). Any economy that is succeeding has data centre collocation facilities built around IT.
Nigeria needs such dependency on technology to be truly industrialised. If you look at the addressable market today, you will find out that there is a significant addressable market in the Nigeria market space and there is need to unlock that addressable market, hence we have the modular approach to all of that. We at Rack Centre are building in modules to double our capacity. As the market is unlocked, we will build even more capacities.
The market is available and we are building capacities to unlock the market, and if this is achieved, the Nigerian economy can successfully meet the demand for technology growth in the country.
Aside Nigeria, what other markets do you serve and how can data centre business generate money for economies?
I have been to Senegal during the West and Central Africa Regional Network conference. I was also at the African CEO Summit in Abidjan in Cote d Ivoire and what I saw in those travels was a significant opportunity for us to provide that core infrastructure in West Africa. For example Rack Centre is connected to all the undersea cables that pass through most of the West African countries from Europe. We are connected to ACE, Glo1, MainOne, MTN WACS, and others. This means that we can be connected to any African country that is connected to the undersea cables. So we are warming up to operate outside Nigeria where the undersea cables operate and we see business opportunities in Ghana, Senegal, Cote d Ivoire and other African countries. So there is need for shared infrastructure capability across Africa and other African countries are looking up to Nigeria to take the lead in the shared infrastructure capability. So we can actually generate money for the Nigerian economy, the way others could generate money for their various economies.
So what could be the implication of hosting data outside Nigeria?
The implications are huge. In the first place the latency of hosting data abroad is higher than hosting in Nigeria and when the latency is high, it means more risk in managing the business and more money will be spent to manage it. From a foreign exchange point of view, it is more expensive to host data outside the country than hosting it within the country. If we are selling our services outside the country, we will be earning foreign exchange that could be used to invest in the expansion of our local facilities.
So how will you compare the parading shift of hosting data abroad and hosting data in Nigeria?
Yes, there are people and organisations who still host their data outside the country, but some are beginning to realise the need to host their data in Nigeria because of the importance and we are still raising that awareness. One thing that is clear is that the Nigerian environment is increasingly becoming highly technology savvy and they are beginning to realise the importance of hosting big data in the country.
Data centre is the bedrock of technology development and banks are even beginning to realise this and majority of them have their data being hosted in Nigeria.
Internet of Things (IoTs) and Big Data are the next things that will revolutionise the globe. How prepared is Rack Centre for this?
You are quite correct of the imminent global revolution that will be driven by IoTs and Big Data. Rack centre is prepared to be part of the revolution and we are doubling our capacities to accommodate more data from our customers and also to meet our customers’ needs in this regard, because the revolution will definitely drive increase in data usage and hosting.
How is the current economic hardship affecting data centre business in Nigeria?
The economic situation is affecting all kinds of businesses in the country, including the data business. What we are doing is to run our operations completely on diesel because we cannot afford to have downtime in the business as a result of poor electricity supply. Data centre business needs constant cooing system of the racks and this means that power supply must be constant. But the efficiency of our facilities helps us to manage our power consumption rate. For instance we run at 1.5 power usage efficiency, which is a global standard rate. We are currently working with the Ikeja Electricity Distribution Company to bring and install for us, a dedicated 33 KVA line that will enable us have constant power supply from the Power Holding Company of Nigeria. We will also have a base transceiver station also known as base station and all these will enable us attain 80 per cent reliability on power. We are looking at having it installed in our premises by July this year.
What does it take to manage a Tier 111 Data Centre in Nigeria?
It takes a lot to efficiently manage a Tier 111 Data Centre in Nigeria because of several environmental factors. It takes a lot of skills to manage an efficient data centre. We run project office, we have finance department, audit department, project department and all these departments work tirelessly together to manage the Rack Centre Tier 111 Data Centre. We also combine them with enterprise risk management and try to mitigate risks in the process, and we are passionate about it.