1. TERACO AN AFRICAN STORY
THE JOURNEY OF A VENDOR NEUTRAL DATA CENTRE
Andrew Owens, Teraco Data Environments
For SAFNOG 2018

2. TERACO CT1 CAPE TOWN: CIRCA 2009
BACKUP GENERATORS
DATA CENTRE

3. TERACO JB3 ISANDO CAMPUS Johannesburg: 2018

4. 2008: WHY THE TIME WAS RIGHT BEFORE 2008 TODAY
By 2008 the teleco market in South Africa had reached a pivotal point, resulting in the optimal environment for the establishment of a vendor neutral data centre operator:
BEFORE 2008
Single fixed line operator
Single operator licensed to build infrastructure
High connectivity costs - $4000 per Mbps
Large Telco’s not peering
Limited subsea capacity (2 cables: SAT3 & SAFE)
Limited international content available locally
TODAY
Over 350 registered ASNs
ECNS license holders build out own infrastructure
2 established IXP operators
Multiple high capacity subsea cables (EASSy, WACS, SEACOM, SAT3 & SAFE)
6/10 top content providers available locally
6/10 top CDNs available locally
LARGEST INTERNET COMPANIES
LARGEST GLOBAL PEERS 1 2 3 4 5 6 7 8 9 10
1.) In a historic case defended by Telkom, Altech challenged in court that its Autopage subsidiary-which held a VANS (value added network services) license should be able to build its own infrastructure. The high court ruled in Altech’s favour and, by doing so, ruled against the status quo in South Africa’s telecom markets.
2.) The high court decision meant that all VANS license holders in South Africa, which numbered over 300 at the time , could now ‘self-provide’ or build their own networks. They were no longer obliged to lease backbone capacity from either the country’s two fixed-line operators (Telkom and Neotel), or the three mobile network operators (Vodacom, MTN and Cell C). The Next Generation Network was born. 3.) The providers are licensed by the Independent Communications Authority of South Africa (ICASA) they are issued with individual electronic communications network service (I-ECNS) licenses.  4.) These licenses began being issued in 2008 The old value-added network services (Vans) licenses originally held by all the early providers have been converted to I-ECNS where applicable.

5. TERACO INVESTMENT TIMELINE3
SERIES B

6. GROWTH TIMELINES 4
As CDN operators started deployment ( ) in Africa we saw a huge spike in capacity requirements across all products - power,space,cabling

7. 2,800 INTERCONNECTS 12,500 INTERCONNECTS
INTERCONNECTIONS AS AT JUNE 2014
2,800 INTERCONNECTS
INTERCONNECTIONS AS AT SEPTEMBER 2018
12,500 INTERCONNECTS
34.5x
3.8x
2.4x
5.2x
3.2x
ENTERPRISE
CARRIER / ISP
CONTENT
OUTSOURCER / MSP
FSP
Customers
Carrier / ISP
103
Outsourcer / MSP 34
Enterprise 16
Content 6
Financial Services Provider
Total
165
Customers
Carrier / ISP
230
Outsourcer / MSP 94
Enterprise 54
Content 22
Financial Services Provider 41
Total
441

8. Broken down per market GDP our data centre builds and growth have been primarily focused within Johannesburg with Cape Town following and Durban only emerging recently. Therefore be careful on over investment in data centre builds. As a neutral data centre operator our first review is on available networks and through deregulated markets drive carrier growth and therefore as a colocation operator a larger addressable market.

10. TRENDS DRIVING DC GROWTH IN AFRICA6
Content is moving closer to the edge (user)
Accelerated migration to the Cloud
Infrastructure capex
Lack of resources (skills)
On premise DC cost escalation
Access to connectivity
Lower connectivity (capacity) costs
The Cloud is local
Improved security
Data sovereignty
Lower latencies
Emerging market
Access to multiple networks
Access to peering (NAPAfrica, JINX, etc.)
Enterprise is becoming digital
eCommerce
Online everything

11. THE CLOUD IS HERE
11 July 2018
Amazon Web Services (AWS) Direct Connect is now live in South Africa and located at Africa’s only vendor neutral data centre, Teraco. AWS Direct Connect enables clients to directly connect to their AWS resources in an AWS region. The service is accessible via a direct cross-connect within Teraco or from the Teraco Cloud Exchange platform in Johannesburg and Cape Town.
2 November 2017
Teraco Data Environments, Africa’s largest neutral data centre, today announced it will be a Microsoft Azure ExpressRoute Connectivity partner, providing clients high performance private network connections to Microsoft Azure and other Microsoft Cloud Services. Teraco will be one of the first companies to offer access to the Microsoft Azure ExpressRoute sites in Africa, when Azure becomes generally available in 2018.

12. TOP 25 AFRICAN RETAILERS, FY13 REVENUE GROWTH (Y-O-Y)
2018: THE ADVENT OF PUBLIC CLOUD INFRASTRUCTURE 7
WHY ARE THEY HERE?
RANK '16
RANK '15
COMPANY
INDUSTRY
COUNTRY 1
Sonatrach
Petroleum
Algeria 2
Sonangol
Angola 3 4
The Bidvest Group
Diversified
South Africa
Sasol
Chemicals 5
Eskom
Utilities 6
MTN Group
ICT/Telecoms 7
Steinhoff International Holdings
Wood and paper 8
ShopRite
Holdings Retail 9 10
BidCorp (ex Bidvest Foods)
Agribusiness
Imperial Holdings
TOP 25 AFRICAN RETAILERS, FY13
RETAIL REVENUE RANK
NAME OF COMPANY
HEADQUARTER COUNTRY
CORE RETAIL SEGMENT 2013
REVENUE (US$ MILLION)
REVENUE GROWTH (Y-O-Y)
FY11-FY13 REVENUE CAGR 1
Shoprite Holdings Ltd
South Africa
Food and beverage
9 852,50
10,5%
11,1% 2
Massmart Holdings Ltd
General merchandise
7 529,90
9,8%
8,7% 3
Pick n Pay Stores Ltd
6 343,30
65,0%
6,8% 4
The SPAR Group Ltd
5 166,70
10,7%
11,5% 5
Woolworths Holdings Ltd
Clothing and accessories
3 827,80
12,7%
17,8% 6
The Foschini Group Ltd
1 594,10
13,6%
11,7% 7
Mr Price Group Ltd
1 557,70
15,0%
14,1% 8
Clicks Group Ltd
Health and personal care
1 349,70
7,9%
6,7% 9
JD Group Ltd {Steinhoff International Holdings Limited)
Furniture and home furnishings
1 141,30
-5,8%
2,5% 10
Truworths International Ltd
1 008,20
7,1%
8,8%
Africa is the next emerging market with large revenue opportunities for cloud operators. Especially focused on our growing financial sector. Due to resource + capex constraints uptake on migration into the cloud has been expedited

13. WHY SOUTH AFRICA 1 Large Addressable Market 2 Internet Freedom 38 1
Large Addressable Market 2
Internet Freedom 3
Broadband Penetration 4
Stable Power Infrastructure 5
Favourable Regulatory Environment
JHB – CPT = 16ms
JHB – London = 155ms
JHB – Nairobi = 52ms
JHB – Lagos = 168ms
London – Nairobi = 135ms
London – Lagos = 94ms
CPT – London = 128ms
CPT – Nairobi = 72ms
CPT – Lagos = 151ms 6
Stable Political Climate 7
Stable Economic Climate 8
Geographic Location (Furthest Point South from European Hub)

14. WHAT DOES THAT MEAN FOR ENTERPRISE BUSINESS?
CONSIDER THIS:
Are you using or planning to implement some form of cloud?
Is the private cloud is a more attractive option than the public cloud?
Is your organization moving to the cloud without an adoption strategy in place?
Does your firm anticipate reaping great benefits from the cloud?
Do you know what the cloud means?
Are you planning a hybrid cloud implementation of some sort?
Have you reviewed open source? It is an important strategic component for the majority of cloud adopters.
Are you going to rely on your current providers for migrating into the cloud?
Are you reviewing sophisticated cloud configurations and implementations?
Are you concerned about data security?
Is multi-cloud a part of your strategy?
What are the enterprises currently considering – key opportunity for carriers and managed service providers to become part of the consideration process and drive strategy. This will however require new product development and a focus on keeping Africa routes in Africa and resolving cross border issues.

15. WHAT ARE CLOUD ON-RAMPS?
DEFINITION
The dedicated network interconnection point to Cloud Operators e.g.
AWS Direct Connect
Microsoft Express Route
Google Cloud Connect
FEATURES
Predictable Performance
High Throughput
Service Level Agreements (SLA)
Redundancy

16. LIVE AFRICA CLOUD ON-RAMP LOCATIONS – More on the way!
CT1 | CAPE TOWN
Region: South Africa West
JB1 | JOHANNESBURG
Region: South Africa North
Currently on live in South Africa however more to go live in Kenya and Nigeria

17. EXAMPLE - HOW TO CONNECT FROM TERACO
Cloud On-Ramps
REGION
CORPORATE DATA CENTER
Virtual private gateway
Client/Partner
router
CLOUD ON-RAMP LOCATION (TERACO)
JB1 | Johannesburg CT1 | Cape Town
Teraco Cloud Exchange
Client router/firewall
Public Cloud Services
PRIVATE VIRTUAL INTERFACE
PHYSICAL CROSS CONNECT
PUBLIC VIRTUAL INTERFACE

18. THE NEXT 10 YEARS IN AFRICA
Vendor neutral DCs will proliferate across the major tech hubs (SA, Nigeria, Kenya) 2
Global tech brands will adopt a local approach to these markets 3
5G accelerates connecting the continent 4
Africa’s informal economy becomes digital 5
Cloud becomes mainstream 6
Corporate/enterprise investment in African technology increases

19. THANK YOU The world connects here. www.teraco.co.za
Teraco Data Environments (Pty) Ltd 5 Brewery Street, Isando, 1600     Phone / +27 (0)