Raxio on course to launch new Tier III carrier-neutral data centre in Uganda – its investor First Brick Holdings wants to launch four more by 2021

16 August 2019

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Africa’s new digital life needs cloud services and the data centres to host them. Uganda took one step forward with the announcement of a new Tier III carrier-neutral data centre called Raxio in January 2020. Russell Southwood spoke to Robert Mullins, the Executive Director of its operator and investor First Brick Holdings.

The backers and investors in Raxio are First Brick Holdings, a company set up by the Roha Group. The latter was set up by Brooks Washington, a Harvard-educated American who used to work with McKinsey & Co in Nigeria where he “coordinated much of McKinsey's private equity work in Africa.”

As Mullins told me, Roha Group focuses on “areas we identify as having unsupplied demand.” Its first major play was to set up Juniper Glass Industries in Ethiopia, something the country lacked. It has now also gone into an equipment leasing business in the same country.

The third area it has identified with unsupplied demand is data centres:”We think one of the missing pieces is data centers. In order to have a functional and energetic digital economy, one essential piece is a data centre.”

This general proposition is unarguable but why Uganda, as its one of Sub-Saharan Africa’s smaller digital economies?:”We scanned the continent. Our investment sweet-spot is US$50-100 million but that’s probably not a single investment. So we’re looking at something multi-country or pan-regional.”

“We looked at which countries we could address most rapidly. Things moved quicker in terms of local partnerships and there was a pent-up demand there. It will be an independently operated data center based on best practices with neutrality as a key characteristic. That will be both carrier and cloud service neutrality. From our first customers we’re seeing local and international cloud providers.”

Some of those cloud services will come from carriers who have seen their traditional business eroded and want to expand their enterprise services portfolio with a cloud offering.

The data centre will be able to house up to 400 racks, delivering 1.5MW of IT power at final phase. Located 15 kms from Kampala in Namanve Industrial and Business Park, Raxio will meet the requirements for both primary and disaster recovery sites and will sit along one of Uganda’s principal fibre routes to ensure connectivity. Mullins says they are on target for an opening at the beginning of January 2020:”The civils are fully under way and the parts needed for the design are on order.”

So who is going to use the data center?:”Initially most demand will be local. The most obvious category is the banking sector, which is increasingly going online, often with a regulatory component to it. They have a need for uptime and in order to maintain uptime, you either make a considerable investment in your own data centre or you use an external provider.”

“One of the interesting developments from disaster recovery is now some banks are talking about making our facility their primary data center and having their disaster recovery elsewhere.”

There are also pure cloud play service providers and those with enterprise portfolios who want to add in cloud services: one of the first signed up local customers is Hamilton Cloud Services. There are also potentially media providers who are dealing with online content generation and who have “search problems and storage issues.”

A key feature is that Raxio will become a ‘meet point’ for the industry:”We already have 10 carriers who will have active equipment in the facility. The ability to interconnect with others in the facility is very important.”

The final element of potential demand are the international OTTs:”People like Akami and all the rest. It’s about being closer to their eyeballs and content needs to be cached locally for quality of service.”

So what are the prospects for Uganda’s digital economy?:”I’ve been involved in this project for a year. We’re just at the beginning. The way content is being consumed and the way business and Government are digitalizing is already happening. The country as a whole has immense possibilities. Reliability will increase the provision of digital services.”

“There’s a push in East Africa for shared provision of cross-border services. This will enable businesses to transport business concepts across borders.”

So where’s it going to set up next?”We already have an office and a team in Kenya but there are already several data centers there so we’ll see how things play out there. We’re looking closely at Rwanda, Tanzania and Ethiopia. At the moment, Ethiopia is top of our list. From a demand perspective, there’s a bigger pool there than in other countries.”

He sees the announced liberalization as a factor in accelerating its planning and has already had good discussions with the Government:”New (telco) entrants will provide better connectivity and the plans for a national (fibre) backbone are also important.”

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