3 ms·

Elephant in the room here -> There's no money to be made there (yet)

by scurvy 11y ago

Epenthesis 11y ago
The question then: Is there sufficient first-mover advantage that a far-minded company setting up a datacenter there now could reap the benefits when there is money to be made?
- scarmig 11y ago
  I think this leaves out something critical: information infrastructure isn't merely something you deliver to a region to extract profits from it, but something that accelerates growth and helps build a civil society and flourishing middle class. If I had a couple billion dollars to blow, I'd be spending it on that. Though, maybe that's why I don't have a couple billion to blow =)
- scurvy 11y ago
  Far-minded and deep pocketed. Opening a POP in any new country requires a lot of capex, opex, and human capital (legal, coordination, ops, etc). This glosses over the fact that your service even can geo-scale well over high latency and high jitter networks.
- notahacker 11y ago
  Judging by how quickly certain African countries have taken to mobile payments - in the cases of much of the population, skipping banking altogether - there's plenty of money for those with the right vision. The profits from serving ads for consumer goods will be pretty slim though.
Apocryphon 11y ago
Continent with the fastest growing middle class, though.
- scurvy 11y ago
  I'd love to put a POP in joburg (and one in Sao Paulo), but the economics just don't work out for us there. The usual stuff, plus the incremental internationalization costs for the product (more translations, more payments, more support, etc). Like any business, we'll get the low hanging fruit first, then move on to the higher, harder to reach branches. We'll improve Internet service in Africa, but not before the time is right.
akhatri_aus 11y ago
You're grossly mistaken here I'm afraid. Check out the prices from vendors. Also, check out the profits. Also the margin! from the ISPs. Take into account the Capex too. Everything will seem odd, except the volume of data consumed per user [which is related, or better said limited to the maximum actual bandwidth] Safaricom which is well known for its MPESA platform is the most profitable firm in sub saharan africa [not south africa or nearby] and it's all because of data. Datacenters are difficult: - Higher cost of electricity - Unreliable electricity (blackouts and under-rated voltage) - Costs of acquiring equipment/servers - Heating/Cooling is on the harder side - Lack of competition means pricing is farther up on the higher end - Back down to cost of data, which is really expensive per GB or to lease the fiber required. Another thing is there is a large latency chunk added as the vast majority of consumers use 3G which adds another chunk of latency in. This is slightly disincentivising to add in local datacenters. It may be worth noting AWS is actually run in great part from Cape Town. Everyone uses their data centers in Virginia yet does anyone wonder why AWS doesn't offer anything in South Africa when it's being built here?

Elephant in the room here -> There's no money to be made there (yet)

by scurvy 11y ago

Elephant in the room here -> There's no money to be made there (yet)

The question then: Is there sufficient first-mover advantage that a far-minded company setting up a datacenter there now could reap the benefits when there is money to be made?

scarmig 11y ago
I think this leaves out something critical: information infrastructure isn't merely something you deliver to a region to extract profits from it, but something that accelerates growth and helps build a civil society and flourishing middle class. If I had a couple billion dollars to blow, I'd be spending it on that. Though, maybe that's why I don't have a couple billion to blow =)
scurvy 11y ago
Far-minded and deep pocketed. Opening a POP in any new country requires a lot of capex, opex, and human capital (legal, coordination, ops, etc). This glosses over the fact that your service even can geo-scale well over high latency and high jitter networks.
notahacker 11y ago
Judging by how quickly certain African countries have taken to mobile payments - in the cases of much of the population, skipping banking altogether - there's plenty of money for those with the right vision. The profits from serving ads for consumer goods will be pretty slim though.

Apocryphon 11y ago

Continent with the fastest growing middle class, though.

scurvy 11y ago
I'd love to put a POP in joburg (and one in Sao Paulo), but the economics just don't work out for us there. The usual stuff, plus the incremental internationalization costs for the product (more translations, more payments, more support, etc). Like any business, we'll get the low hanging fruit first, then move on to the higher, harder to reach branches. We'll improve Internet service in Africa, but not before the time is right.

akhatri_aus 11y ago

You're grossly mistaken here I'm afraid. Check out the prices from vendors. Also, check out the profits. Also the margin! from the ISPs. Take into account the Capex too. Everything will seem odd, except the volume of data consumed per user [which is related, or better said limited to the maximum actual bandwidth] Safaricom which is well known for its MPESA platform is the most profitable firm in sub saharan africa [not south africa or nearby] and it's all because of data. Datacenters are difficult: - Higher cost of electricity - Unreliable electricity (blackouts and under-rated voltage) - Costs of acquiring equipment/servers - Heating/Cooling is on the harder side - Lack of competition means pricing is farther up on the higher end - Back down to cost of data, which is really expensive per GB or to lease the fiber required. Another thing is there is a large latency chunk added as the vast majority of consumers use 3G which adds another chunk of latency in. This is slightly disincentivising to add in local datacenters. It may be worth noting AWS is actually run in great part from Cape Town. Everyone uses their data centers in Virginia yet does anyone wonder why AWS doesn't offer anything in South Africa when it's being built here?