728 x 90

Building and leasing of data center space

Building and leasing of data center space
Photo by Thomas Jensen- Ask Nigeria

Current data centers have less than 30% capacity despite $200M investment.

Data Centers are created for accommodation of a large amount of IT equipment used for storage and processing of essential data and applications. A data center is made up of servers, routers, uninterruptible power supplies, fire control equipment, external network connections, storage sub-systems, firewalls, cooling systems and backup generators. While some data centers are created and purchased for personal use of one organization, other data centers have rental options open to various organizations for storage of data.

In Africa, the Nigerian data center industry is one of the rapid-growing markets. Investments in the sector are acquired by digitization, rising e-governance, increased demand for data services and improved infrastructure. GlobeNewswire’s Nigeria Data Center Market Investment Report 2021-2026 states that over 90 percent of Nigeria’s data is stored abroad owed to the preference of public institutions to host their data abroad. Currently, there are 11 data centers in Nigeria and notwithstanding the strive to meet predicted increase in demand and investment of over USD200 million in data center operations, the present capacity utilization of existing data centers is not up to 30 percent.

Building data center spaces require high capital and quality time.

Recent regulations enacted by the government for betterment of local data hosting project that companies and government Ministries, Departments and Agencies (MDAs) will ensure development of personal data centers or lease space provided by data center infrastructure providers. The decision to acquire or build a data center will involve identification of suitable commercial real estate, negotiation of the land and building purchase, conduction of due diligence, development of the data center, staffing, collection of development permits and operational licenses, installation of the appropriate infrastructure, security and others. These construction steps require quality time and high capital although it gives companies control and better security regarding access to the facility.

The steps and phases of constructing a data center require quality time and high capital although it gives companies control and better security regarding access to the facility. However, leasing space from a data center provider leads to avoidance of actual difficulties with requirement of little time and lesser capital. Usually, companies and government parastatals do not have required technical workforce and resources for management of a dedicated data center space for a whole year.

Leasing data center space has more advantage over building a data center.

The problem of management is solved by leasing data center space as provision of manpower and resources required for seamless management of the data and IT needs of businesses is catered for by the vendors. Also, there are usually regular introduction of disruptive technologies to foster changes in business operations. Technologies like AI, machine learning, and big data analytics have a new set of requirements that are best provided, maintained and managed by data center providers. It has been proven that there are more advantages to companies leasing data center spaces compared to building and operating a data center.

In Nigeria, there are no specific laws governing the leasing of data center spaces, however it is important that potential investors in the data center sector consult proper advice from legal practitioners with professionalism in real estate, intellectual property, data security, taxes, corporate and commercial, energy infrastructure financing and construction, regulatory compliance and dispute resolution. Some major legal and business terms to put into consideration in data center leases include licensing which is done by the National Technology and Development Agency; rental; space size and equipment, and others.

There should be legally addressed considerations before lease.

Other necessary considerations for data center leases include service level agreements, cooling, power, data capacity, humidity, and connectivity. Maintenance and repair for identification of the party responsible for maintenance and repair of the data center infrastructure; term and renewal for assurance of stability and security of tenure; liability, data protection and security, indemnification, intellectual property and other significant clauses need to be legally addressed. Recommendations include legal and regulatory framework, sale and lease buy back, tax incentives and cheaper power solutions.


Related Link

Primedatacenters: Website

The content on AskNigeria.com is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. AskNigeria.com accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.

Fact Checking Tool – Snopes.com

0 0 votes
Rate This Article
21 comments
21 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Admin
1
10 days ago

Building and leasing of data center spaceCurrent data centers have less than 30% capacity despite $200M investment. – Express your point of view.

Abusi
Member
8
10 days ago

Data centers are credible places where we can have access to enough data supply. It will be better to lease them, it will help have maximum productivity.

Member
8
10 days ago

In order to accommodate a huge quantity of information technology (IT) equipment that is required for the storing and processing of crucial data and applications, data centers are developed.

Member
8
10 days ago

Although some data centers are built and purchased exclusively for the benefit of a single company or organization, others offer data storage space for rent to a number of different companies and organizations.

Member
8
10 days ago

Latest restrictions that were passed by the government in order to improve the local data hosting project that companies and government Ministries are working on

Member
8
10 days ago

Regardless of whether you choose to buy or construct a data center, the next step will be to look for appropriate commercial real estate.

Member
8
10 days ago

Whether you want to buy an existing data center or construct a new one, you will need to locate an appropriate piece of commercial real estate.

Member
8
10 days ago

It has been demonstrated that there are greater benefits for businesses to rent space in a data center rather than constructing and operating their own data centers.

Member
8
10 days ago

Companies and government agencies typically lack the necessary manpower and resources for the management of a dedicated data center space for an entire year. This is especially true for longer periods of time.

Member
9
10 days ago

Building and leasing of data center space. Technology building of data is very important to us. It increases business productivity

Member
8
10 days ago

Instead of building and managing their own data centers, firms would benefit more from renting space in one.

Member
8
10 days ago

It will be better to lease these data centers, with them we will enough data supply and all consideration should be legally addressed before lease.

Member
8
10 days ago

It will be a great idea to lease these data centers so the firm can benefit from it if is lease rather than constructing their own it will increase the business growth and productivity

Member
9
9 days ago

I’m in total support of leasing data space centre then building because Nigeria lack management culture,we find it so hard in managing anything we own which tends to be used anyhow and later deteriorated.

Member
8
9 days ago

Leasing these data centers is the best option; doing so will ensure that we have an adequate supply of data, and any and all legal concerns should be resolved before we sign the lease.

Member
8
9 days ago

Companies and government agencies generally do not have the required amount of staff or resources to run a dedicated data center space for a whole year. This holds true, in particular, for extended stretches of time.

Member
8
9 days ago

Renting space in an existing data center is a more cost-effective option for businesses than constructing and operating their own own facilities.

Member
8
9 days ago

Building and managing data centers are multitasking, considering so many tech things involve : security, software and hardware needed for the constant running of data centers.They are too expensive to setup.

Member
8
9 days ago

The running of data centers is expensive. Despite the $200M investment the storage capacity didn’t exceed 30% is a prove that it requires large capital and better managerial skills.

Member
8
9 days ago

Nigeria’s data center sector is one of several in Africa that is expanding quickly. Digitization, growing e-governance, expanding need for data services, and improved infrastructure all attract investments to the sector.

Member
8
8 days ago

Businesses and governmental organizations frequently lack the personnel and funding needed to run a dedicated data center space for a whole year. For longer times, this is especially true.

0 0 votes
Rate This Article