London — The data centre and cloud space in Sub-Saharan Africa is steadily growing and becoming more complex. In a perverse way, the current Covid-19 crisis is acting as a growth factor as larger numbers of Africans go online while at home. Russell Southwood spoke to Andrew Cruise, Managing Director, Routed about why he went the vendor neutral route.
Cruise was educated in the UK and then worked in consultancy and for a company doing managed hosting. In 2014, he decided to come back to South Africa and started thinking about what he might do there:"Initially South Africa was behind the rest of the world on these things. With improved connectivity, Cloud could become a product and it happened more quickly than I thought".
"The idea was to become a cloud operator and offer this on a self-service basis. We chose to be a vendor neutral cloud, being the underlying service provider to other cloud operators. We also wanted to be enterprise rather than developer-focused. There's no point in competing with the likes of AWS and Microsoft on this.".
He worked for South African ISP RSA Web and met his future business partners and directors: Malcolm Siegel (who built out RSA Web's fibre network) and Benjamin Coetzer (RSA's cloud specialist).
"There was a bigger market for existing opportunities. This included companies that used to have data centres on the premises and those doing co-lo and rented hardware. We're a cloud operator that is vendor neutral focused on traditional workloads. We're similar to AWS and we're targeting some customers for different workloads. They use us for one thing and have other arrangements for another."
Its racks are located in South Africa's largest data centre, Teraco and is has two locations for disaster recovery, the larger in Johannesburg and the smaller in Durban:"Teraco hosts all our internal infrastructure for customers".
Its customer base is exclusively cloud service providers including internal operations departments in larger businesses (one has been spun off as an independent entity, Altech Cloud Systems (for disaster recovery) and it provides virtual machines for a couple of managed service providers offering accountancy software Sage and Pastel. There are also a few ISPs like CyberSmart, for whom they do "internal workloads" and companies like eNetworks (now part of Datacentrix).
Being a vendor neutral cloud service operator means that he currently has no competitors:"Cloud service providers are our customers. All the rest are vertically integrated". So why is there only one vendor neutral provider?:"VMware says you can count the number of companies this kind of offer on the fingers of one hand. There are high barriers to entry in terms of capital and skills. Effectively you start with no customers unlike someone migrating an existing customer base who would by definition not be independent. There are lots of people running VMware clouds but it's as part of another business. Also it's risky running cloud in addition to other businesses. It's our sole focus".
The company has had three years of positive cash flow and over the current crisis notwithstanding wants over the next 3-5 years to make most of the existing cloud providers in South Africa its customers.
It is also cautiously eyeing expansion:"We're establishing ourselves in South Africa and are taking it little steps at a time. We're self-funded and that's an advantage right now with the economic downturn".
"Once Africa starts on developing more data centres and co-location spaces, things will start to move. VMware is already referring cloud providers to us. We will happily build and manage in the future. It's our sole expertise. I like the idea of being in South Africa and the rest of Africa. I don't want to go back to the UK and Europe". It was VMware's first verified cloud provider in Sub-Saharan Africa when it was accredited in the autumn of 2019 and there are now two others in South Africa and one in Nigeria.