Huawei Cloud becomes one of the top three cloud service providers in South Africa

Competition in the cloud space is heating up. According to Africa Analysis Huawei is one of the companies worthy of our attention.

Huawei Cloud has become one of the top three cloud service providers in South Africa, according to Africa Analysis’ "2024 South Africa Cloud Computing Market Growth Forecast Report."

Despite only entering the cloud market in South Africa six years ago, Huawei has rapidly ascended the ranks.

This achievement is particularly notable as nearly one in five surveyed users are running significant workloads on Huawei's platform, showcasing the company's strong competitive strategy in the region. The report indicates that the cloud market, valued at approximately R35 billion in 2023, is expected to grow to over R113 billion by 2028, highlighting the substantial growth potential and Huawei's significant role in this expanding market.

“This report finding bodes well for the investments we have made in growing digital infrastructure in South Africa. We are starting to reap the rewards of our strategy because we entered the market at an opportune time and focused on working with local partners in SA when establishing our data centres,” says Steven Chen, Managing Director of Huawei Cloud South Africa.

The "2024 South Africa Cloud Computing Market Growth Forecast Report" examines the latest developments in the local sector as they relate to technology and cloud service providers, as well as end users of these products and services.

As public cloud services continue to dominate the market, the private cloud segment is experiencing the fastest growth, projected to expand by a third between 2023 and 2028. Among the leading service providers, Huawei Cloud distinguishes itself by offering a unique solution: its public cloud capabilities as an on-premise private cloud, entirely independent of public cloud infrastructure. This approach empowers enterprises with complete control over their data and applications, ensuring compliance with stringent regulatory requirements and enhancing security.

“Our latest Cloud Stack 8.3 offering, launched recently in South Africa, is designed to address the burgeoning demand for private cloud solutions,” says Chen. “It not only facilitates seamless integration with third-party providers but also leverages Huawei's robust cloud architecture to deliver unparalleled performance and scalability.”

How new technologies, digital transformation and data centres are driving market growth

Africa Analysis highlights that three factors are driving growth in the South African market. First are the investments of global cloud providers or hyperscalers, like Huawei. Secondly, governments and corporations are hungry to transform into cloud-first organisations and lastly, growth is also coming from increased investments in data centres that capacitate cloud computing, artificial intelligence (AI) and big data analytics.

The report states hyperscalers have made investments in South Africa that are driving a surge in demand for colocation data centres in the country. This means organisations view servers and network infrastructure as critical assets to own, but they are seeking services that help them keep costs low while maintaining exceptional reliability.

“Infrastructure that enables the country’s digital transformation is a priority. We have invested in foundational software and hardware technologies, and we are leading the way when it comes to introducing IT hardware that is green and low-carbon,” says Chen.

The internet economy is expected to make up between 7% and 9% of South Africa’s GDP by next year and digital transformations in the private and public sectors are driving this growth. As organisations want to take advantage of AI, big data analytics, and machine learning they are coming to terms with the difficulties of developing and deploying these on-premises. This leads them to colocation data centres as they seek help to migrate their workloads to the cloud.

Data sovereignty laws that require certain kinds of data to be stored and processed within the country are also driving the presence of data centres in SA. These centres are enabling high-speed internet access and more reliable information processing which are essential to cloud services. “As more companies adopt hybrid multi-cloud strategies, the criteria for selecting cloud vendors are expected to evolve,” the report says.

“Huawei will play a pivotal role in this industry evolution. Our reliable and secure cloud solutions have contributed to a growth of more than 110% in our customer base and allowed us to add more than 65% year-on-year (YOY) growth in partners over the past two years. Our revenue has also grown significantly by more than 80% YOY and we have grown from two to three availability zones in this region. We also service more than 5 500 government and enterprise customers around the world,” says Chen.

In alignment to the above, a recent Gartner infrastructure as a service (IaaS) market report ranked Huawei Cloud as the third biggest provider in SA by revenue in 2022.

As the country’s maturing ICT sector and growing tech-savvy population adopt advanced technologies like 5G, AI and big data analytics, more investments can be expected to improve data centres and cloud computing capacity. These driving forces can sustain the positive outlook on the country’s cloud sector.

Chen adds that Huawei is ready to drive growth in South Africa’s digital economy. “Not only have we made significant investments to become the leaders in 5G, our first-in-class ICT infrastructure will enable us to fully support the intelligent development of industries in this new era defined by AI.”

South Africa’s cloud computing market is growing and continued investments in infrastructure, skills development and further adoption of new technologies put the country in an ideal position to become a global leader in the near future.