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Business Management

Barry Gill (Africa) - Lessons Learned: The Challenges of IT Innovation in Africa

In 2004, when we opened an operation in South Africa, things were still a little shaky for internet-based services, thanks to the bursting of the dot-com bubble and the general failure of Application Service Provider models, which were still very fresh in everyone's minds. In addition to that, the extremely high cost of co-location hosting services, bandwidth and server hardware left everyone with a recipe for a struggle to get any technology business up and running.

During that time, a seemingly simple product that consisted of various capabilities that were license-based made it easy to bill based on user counts and provide a simple flat fee model to customers.

In 2005, the cost of hosting a single server and providing a mere one gigabyte of metered data to it was significantly more than the revenue generated by a handful of customers in South Africa. As customer bases gained traction in the region, the cost of provision increased as metered billing from our co-location service provider increased. Companies then realized that the flat fee billing model would simply not work in the long term with these costs spiraling, so they had to redesign their infrastructure models.

As a company with several other territories in the UK and US, we couldn't simply use the same model as our other locations. We had no choice but to create a cost/pricing model that was specifically designed for South Africa because of the challenges of setting up our technology in Africa. From an infrastructure perspective, we were not able to run our standard multi-datacenter architecture because of the high costs and over the years we were continually driving our service providers to innovate to provide us with services we needed. We even offered to purchase high speed microwave equipment and donate it to a service provider that had a license to use that type of equipment so that we could get some affordable distance between our nodes, but nobody was prepared to take our offer.

Throughout our process to architect our servers, we negotiated with new providers all the time to both push our current costs down, as well as to find services that were closer in nature to those we were making use of in developed regions. We faced roadblocks that were not even present in the UK or US, such as extended power outages, cooling system failures, lack of available datacenter space and many more.

For example, the security of datacenters and equipment in transit in Africa has always been taken very seriously for reasons you wouldn't expect. There are serious concerns about people crashing trucks into datacenters to load up all the full cabinets they could and drive them off into Africa for resale. In short, the problems we experienced and the challenges we faced over the years setting up our business in Africa, were extensions of the concerns of our other operating areas and we had to move quickly to address them every time. Moving hundreds of servers and networking infrastructure without impacting quality of service to customers is no simple task, but infrastructure capacity, availability and reliability in conjunction with cost management, has driven us to change co-location partners many times over the past eight years.

Africa is developing and is still growing and changing. With it, the infrastructure that underpins the service needed to be able to grow and change in order to adapt a business' infrastructure to the environment the company resides in. If a new fiber is available to provide lower latency connections between datacenters, if we need more space for growth, or growth in an area outstrips what the electricity company planned - we have to adapt, pack and move to another provider.

Any organization that wants to be able to operate effectively in this region will have to ensure that they are prepared to react quickly to rapidly changing circumstances. Buyers are also keeping their ears to the ground looking for new and innovative ways to provide the best service possible, while also reducing costs, risks and complexity, and they are by no means afraid to move from one provider to another to make this happen.

 

By Barry Gill, Product Marketing Manager, Mimecast

 

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