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South Africa Data Center - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026 - 2031)
Market Report I 2026-02-09 I 161 Pages I Mordor Intelligence
South Africa Data Center Market Analysis
South Africa Data Center Market size in 2026 is estimated at USD 0.67 billion, growing from 2025 value of USD 0.58 billion with 2031 projections showing USD 1.44 billion, growing at 16.35% CAGR over 2026-2031. In terms of installed base, the market is expected to grow from 5.54 thousand megawatt in 2025 to 7.81 thousand megawatt by 2030, at a CAGR of 7.11% during the forecast period (2025-2030). The market segment shares and estimates are calculated and reported in terms of MW. Rapid hyperscale cloud investment, new submarine cables, and data-sovereignty mandates are the primary drivers of growth. Johannesburg remains the core hub, though Cape Town and special economic zones attract new builds that balance capacity across the country. Operators are increasingly integrating onsite or wheeled renewable power and advanced cooling to address grid reliability concerns while meeting corporate carbon goals. Consolidation is accelerating as well-capitalized companies acquire or outbuild their rivals, raising competitive thresholds and supporting large-scale, high-efficiency facilities that can host AI and high-performance workloads.
South Africa Data Center Market Trends and Insights
Growing Cloud Migration by Local Enterprises
South African banks, retailers, and public agencies are accelerating cloud adoption after regulatory clarity on data residency. TymeBank migrated the bulk of its digital banking stack to AWS, reducing the time-to-market for new services. The May 2024 National Data and Cloud Policy requires 99.995% uptime for government workloads, thereby boosting demand for certified local facilities. Enterprises also seek hybrid architectures to hedge against currency-related cost swings for imported cloud services while keeping sensitive data within national borders.
Accelerated Submarine Cable Landings Boosting Bandwidth
The 45,000 km Africa cable and Google's Equiano system both became fully operational in 2024, providing 180 Tbps of additional capacity and lowering latency from South Africa to Europe and the Middle East. Reliable international bandwidth encourages hyperscalers to launch local regions, underpinning edge caching and streaming platforms that require nearby compute nodes.
Chronic Grid Instability and Load Shedding
Eskom improved its energy availability factor to 60% in 2024; however, operators remain exposed to unplanned outages that increase diesel and security costs. Mobile carriers collectively spent more than USD 295 million on backup systems since 2020, illustrating the broader infrastructure fragility that also burdens data center margins.
Other drivers and restraints analyzed in the detailed report include:
Renewable Energy Commitments by Hyperscale OperatorsSurge in AI and High-Performance Computing DemandRising Construction Costs Due to Import Tariffs
For complete list of drivers and restraints, kindly check the Table Of Contents.
Segment Analysis
Large sites controlled 86.40% of the South Africa data center market share in 2025 and are on track for an 7.64% CAGR through 2031. This dominance reflects scale economics that offset high land, power, and security costs. Teraco's JB7 project, financed through a ZAR 8 billion facility, will add 30 MW on a single campus. Medium facilities cater to mid-market enterprises that require dedicated suites but cannot justify hyperscale footprints. Small and edge sites, while still niche, gain relevance as 5G adoption grows and latency-sensitive services proliferate. The South Africa data center market size for large facilities will therefore expand faster than other categories, reinforcing consolidation among operators with access to capital.
Large-facility concentration also supports national connectivity goals. Inter-campus fiber routes, coupled with submarine cable landings, position Johannesburg and Cape Town sites as regional exchange points. Smaller regional builds frequently partner with big-campus operators for cloud on-ramp services. Combined, these tiers form an architecture in which large sites anchor capacity and smaller nodes distribute workloads closer to end users.
Tier 3 captured 89.05% of 2025 revenue because enterprises demand at least 99.982% uptime and concurrently maintainable systems. Government mandates further elevate minimum standards, pushing greenfield projects to design at Tier 3 or Tier 4. Hyperscalers are increasingly stipulating Tier 4 electrical topology for AI clusters, driving the segment's 7.08% CAGR outlook. Meanwhile, Tier 1 and Tier 2 remain limited to edge or disaster recovery roles, where brief outages are tolerated.
In practice, Tier 3 facilities often over-engineer critical paths beyond baseline to mitigate grid instability. Operators add redundant transformers and reserve diesel storage exceeding 48 hours. This proactive investment yields premium pricing while securing long-term contracts from banks and global cloud tenants. The South Africa data center market size tied to Tier 3 therefore rises steadily, while Tier 4 uptake accelerates as mission-critical workloads migrate off legacy on-premises rooms.
The South Africa Data Center Market Report is Segmented by Data Center Size (Large, Massive, Medium, Mega, and Small), Tier Type (Tier 1 and 2, Tier 3, and Tier 4), Data Center Type (Hyperscale or Self-Built, Enterprise or Edge, and Colocation), End User (BFSI, IT and ITES, E-Commerce, Government, Media and Entertainment, Telecom, and More), and Hotspot. The Market Forecasts are Provided in Terms of IT Load Capacity (MW).
List of Companies Covered in this Report:
Teraco Data Environments Pty Ltd Africa Data Centres (Liquid Intelligent Technologies) Amazon Web Services South Africa Pty Ltd Vantage Data Centers LLC Alibaba Cloud Intelligence South Africa Google Cloud South Africa (Alphabet Inc.) Microsoft Azure South Africa (Microsoft Corp.) Business Connexion Pty Ltd NTT Ltd Digital Parks Africa Pty Ltd Open Access Data Centres (WIOCC Group) Telehouse International Corporation of Europe Ltd MTN Group Ltd RSAWEB Pty Ltd Technology Corporate Management Pty Ltd Dimension Data Pty Ltd Seacom Ltd Internet Solutions Pty Ltd Huawei Technologies South Africa Pty Ltd Iron Mountain Incorporated South African State IT Agency (SITA)
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET LANDSCAPE
4.1 Market Overview
4.2 Market Drivers
4.2.1 Growing cloud migration by local enterprises
4.2.2 Accelerated submarine cable landings boosting international bandwidth
4.2.3 Renewable energy commitments by hyperscale operators
4.2.4 Data sovereignty mandates under POPIA
4.2.5 Surge in AI and high performance computing demand
4.2.6 Special economic zone - based tax incentives
4.3 Market Restraints
4.3.1 Chronic grid instability and load shedding
4.3.2 Slow permitting for new grid connections
4.3.3 Rising construction costs due to import tariffs
4.3.4 Limited skilled workforce for advanced facility operations
4.4 Market Outlook
4.4.1 IT Load Capacity
4.4.2 Raised Floor Space
4.4.3 Colocation Revenue
4.4.4 Installed Racks
4.4.5 Rack Space Utilization
4.4.6 Submarine Cable
4.5 Key Industry Trends
4.5.1 Smartphone Users
4.5.2 Data Traffic Per Smartphone
4.5.3 Mobile Data Speed
4.5.4 Broadband Data Speed
4.5.5 Fiber Connectivity Network
4.5.6 Regulatory Framework
4.6 Value Chain and Distribution Channel Analysis
4.7 Porter's Five Forces Analysis
4.7.1 Threat of New Entrants
4.7.2 Bargaining Power of Suppliers
4.7.3 Bargaining Power of Buyers
4.7.4 Threat of Substitutes
4.7.5 Industry Rivalry
5 MARKET SIZE AND GROWTH FORECASTS (MEGAWATT)
5.1 By Data Center Size
5.1.1 Large
5.1.2 Massive
5.1.3 Medium
5.1.4 Mega
5.1.5 Small
5.2 By Tier Type
5.2.1 Tier 1 and 2
5.2.2 Tier 3
5.2.3 Tier 4
5.3 By Data Center Type
5.3.1 Hyperscale or Self-built
5.3.2 Enterprise or Edge
5.3.3 Colocation
5.3.3.1 Non-Utilized
5.3.3.2 Utilized
5.3.3.2.1 Retail Colocation
5.3.3.2.2 Wholesale Colocation
5.4 By End User
5.4.1 BFSI
5.4.2 IT and ITES
5.4.3 E-Commerce
5.4.4 Government
5.4.5 Manufacturing
5.4.6 Media and Entertainment
5.4.7 Telecom
5.4.8 Other End Users
5.5 By Hotspot
5.5.1 Johannesburg
5.5.2 Cape Town
5.5.3 Durban
5.5.4 Rest of South Africa
6 COMPETITIVE LANDSCAPE
6.1 Market Concentration
6.2 Strategic Moves
6.3 Market Share Analysis
6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials as available, Strategic Information, Market Rank or Share for key companies, Products and Services, and Recent Developments)
6.4.1 Teraco Data Environments Pty Ltd
6.4.2 Africa Data Centres (Liquid Intelligent Technologies)
6.4.3 Amazon Web Services South Africa Pty Ltd
6.4.4 Vantage Data Centers LLC
6.4.5 Alibaba Cloud Intelligence South Africa
6.4.6 Google Cloud South Africa (Alphabet Inc.)
6.4.7 Microsoft Azure South Africa (Microsoft Corp.)
6.4.8 Business Connexion Pty Ltd
6.4.9 NTT Ltd
6.4.10 Digital Parks Africa Pty Ltd
6.4.11 Open Access Data Centres (WIOCC Group)
6.4.12 Telehouse International Corporation of Europe Ltd
6.4.13 MTN Group Ltd
6.4.14 RSAWEB Pty Ltd
6.4.15 Technology Corporate Management Pty Ltd
6.4.16 Dimension Data Pty Ltd
6.4.17 Seacom Ltd
6.4.18 Internet Solutions Pty Ltd
6.4.19 Huawei Technologies South Africa Pty Ltd
6.4.20 Iron Mountain Incorporated
6.4.21 South African State IT Agency (SITA)
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