The Chief Executive Officer, Rack Centre, Ayotunde Coker, speaks on the data sovereignty, management of data centres and data security in this interview with IFE OGUNFUWA
What has been the impact of your data centre in Nigeria?
Rack Centre has been in operation since August 2013; seven years. In that time, we have transformed the data hosting industry, set a new bar for quality and customer service. We have also put Nigeria on the global map for data centre services.
Companies can now have access to reliable world-class hosting in a carrier neutral environment which gives access to a great ecosystem of carriers and ISPs that businesses need to be connected to.
It means that capital that would be spend by large companies on data centre facilities can be better targeted in the business, the barrier to entry for reliable technology is lowered and with the availability of locally hosted cloud services, broader access to technology to SMEs with the lowered barrier to access high quality tech.
This will have a significant impact on the efficiency of businesses in Nigeria. For large companies, being at Rack Centre typically saves 20 per cent or more in connectivity and ISP costs given the efficiency we provide.
Rack Centre is now positioning Nigeria as the heart of digital data hosting infrastructure in West Africa Sub Sahara Africa. We are doubling our scale to 1.5MW of power, the largest carrier-neutral facility in West Africa and we are looking at further expansion on the same campus beyond that.
Carrier-neutral data centres underpin the digital economy, and that is what we do in Nigeria and West Africa.
The perception during this coronavirus crisis is that IT companies are benefiting a lot financially. This must apply to your line of business.
The impact on IT companies has been a mixed bag, some positive, some neutral and some negative.
During the lockdown, our customers continued to enjoy reliable services running out of Rack Centre, and we offered some services such as remote hands where we tend to customer infrastructure remotely. This has ensured our customer staff do not have to travel or worry about keeping IT infrastructure running.
During the lockdown, we did not onboard new customers. However, onboarding has now resumed. The upside is that our customers have realised the benefits and we are growing footprint. Other companies are now actively considering colocation as the benefits have been so clearly proven, so we see a firming of growth into the future.
What regulatory interventions are needed to ensure data centre operations are sustainable?
We need the enforcement of the data sovereignty laws for critical classifications of data. Given the size of the Nigeria economy and population, this should attract global technology platforms to host in Nigeria. Continuing to improve the ease of doing business ranking and improvement in the international reputation of the country would be a significant help, including action on customs duties on critical data centre infrastructure.
Has the awareness of the importance of data centre improved in the country in the past one year?
It has been increasing progressively over the past six years, and has certainly increased more significantly through the COVID-19 pandemic.
We still have data centres concentrated in commercial areas like Lagos, Abuja and Port-Harcourt. What is hindering the spread of data centres to other states in the country?
With highly connected data centres like Rack Centre, we do not need data centres in every state. We host banks that service branches all across Nigeria and even Africa. The key thing is to optimise location, efficiency of scale and proximity to the point of use. It is a balance between the commercial and the demand. You strike a balance between where the consumption is and where you locate your data centre.
Data centres are capital intensive infrastructure; you spend millions of dollars because the things you buy are not available in the country. There is no point in putting something in Maiduguri if the demand in that area is not that high.
Also, you know that if you are located in Abuja, the distance to Maiduguri is only milliseconds, you optimise between your location and where your consumption is.
We host many of the big banks for instance and those banks have branches all around the country. We are able to connect all the branches regardless of their location.
How are you addressing power generation challenges for your data centres?
We built our own power infrastructure. We have been running for seven years without one second of downtime because we have invested in very sophisticated power off-grid. Right now, because we are expanding significantly, we are looking at a whole range of power options.
The heart of data centre is power; if the power is down, the data centre is down. If the data centre is down, everything else is down.
We absolutely have to get power supply right to operate optimally. That is a really important core competence for us; how to make power reliable. That is one thing we have innovated on in a very challenging environment like this.
One of the things we do is to worry about power but for our customers in Rack Centre, all they need to do is worry about their business.
The companies who have their own data centre worry about power supply and availability of diesel.
With many organisations adopting the remote work mode, how are you ensuring there data remain accessible and not compromised during this period?
Because we track and monitor external forces, we prepared ahead when the COVID-19 started. By last week in February, before the index case came in, we tracked global patterns and we put in place COVID-19 action plan. Coincidentally, after we implemented the action plan, the index case arrived.
We spent some money to get our PPE in place, engaged our supply chain because of all the spare parts and everything we needed for the power generation. We bought all the masks that were required and sanitisers upfront. By the first week of March, we had done everything including all the networking that we needed to put in place to monitor the facility remotely for our people working from home.
We had started working from home a week before the lockdown. We sent a note to our customers to say we were prepared for the coronavirus requirements.
What we did regularly was to send notes to companies hosting their data with us to ensure that they were aware of all the protocols we had put in place.
What challenges does your business face in Nigeria?
A stumbling block in our growth phase was the recession mid 2015 to 2017 which affected our growth trajectory.
However, the converse benefits are that businesses then preferred to preserve capital and not build data centres. So that has been good for our growth.
The high tech nature of our business is that we have to import our technology which is subject to import duties. We operate in a global market for the cost of our services, so this immediately makes us less capital efficient. Access to efficient capital has been a challenge and of course, we do track the currency value very closely.
How are you addressing them?
We continue to work through the proper channels to bring awareness to the economic impact we have with efficient technology infrastructure in the country, and therefore have beneficial rates for importing our technology. On the question of access to capital, we have had the investment in Rack Centre with Actis, the UK private equity company with expertise in emerging markets and other investments in Nigeria take a majority stake in Rack Centre.
This has been a great achievement for us, a testament to the quality of the brand and governance and key platform for growth into the future.
You mentioned that import duty is a challenge. In what way is this affecting your business?
We have a global platform that we compete with. If a company cannot host with me, they can host in Ghana or elsewhere. If in Europe, they have access to the equipment they require locally and they are not paying duties, if I have to pay between 20 to 25 per cent duty, immediately, it affects competitiveness in terms of cost of building infrastructure. Because we build infrastructure for the digital ecosystem, which is now critical for the country, we need to look at how we can have special rates for bringing in the technology so that we can grow our broadband and digital ecosystem.
With many businesses operating remotely, what is the best way to manage and secure their data?
Businesses have to ensure that they engage the right expertise to ensure comprehensive protective platforms and software are in place for anti-virus, anti-phishing monitoring and regular updates are as frequent as required.
A key aspect of securing assets is employee and making people aware of what to look out for, typical phishing and hoax email patterns, and the important discipline of updating software on end-point devices such as computers, tablets, phones, etc.
Core systems have to have the strongest protections in firewalls, protective monitoring and intrusion management. Absolute diligence and discipline is a must. Infrastructure hosted at Rack Centre is subject to the highest levels of physical security.
What has been your experience sourcing for foreign exchange for your business?
We make sure we manage the issue of currency well. It is something we explain to our customers on why there is a connection to dollars in what we do. We work with our shareholders when we have capital projects to ensure that we have structures in place to access dollars ahead of our expansion. It is something we plan carefully with our shareholders.
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