Lagos Datacenter to cut costs by 50%: Venema


Dick Venema is the Chief Executive Officer of Venema Advies Nigeria Limited, a subsidiary of the Venema Advies Group. The Group is also building the Lagos Datacenter, a Tier 4 data centre.

He speaks about the prospects of data centre business, the challenges and what the firm is doing to enhance local content. KOKUMO GOODIE met him in Lagos.

You are so excited about the Lagos Data centre. Why the excitement?

I am excited because Venema Advies Nigeria Limited has attracted top players in the data centre industry to engineer this project.

One is ICTroom, a Dutch data centre specialist which has worked with Rabobank, Europol, ING and many others. ICTroom engineers data centres conform to the Uptime Institute Regulation.

Zwart Techniek is another Dutch firm which is a top global player in the energy sector. Zwart Techniek has long experience in Africa. The firm has worked for the Telecity, Dutch Army, TANESCO, Rabobank and many others. So, you can see when I beat my chest and say “yea, we got something unique to offer Nigeria” it is not an empty promise. Venema Advies Nigeria Limited has attracted top players in the Datacenter industry to engineer this project.

This is why we can deliver Africa’s most modern data centre to date. Building a data centre is not something you just do. It is certainly not a tea party. Experience is needed. We see too many times that telecom companies build data centres, but they lack the specialisation. TIA-942 is a totally different specification, according to the Uptime Institute.

What is the future of data centre business in Nigeria?

The data market in Nigeria will develop very quickly, especially when it is considered that the economy is growing at 6% a year. The data centre market will grow at twice that rate. Though cloud technology is coming from abroad, Nigerians are gaining more knowledge about Information Technology (IT) so, the market will grow 12% a year and in the next five years, I see the market growing at between 60-70%.

Is it possible to put a figure to gross domestic product (GDP) sector contribution of this technology?

It is pretty difficult to say because everything is so concentrated on the data centre; that is how many people will start programming mobile application because it is suddenly available in Nigeria. It is difficult to calculate how much the data business will add to the GDP but around that technology, there are so many services that people from all over Nigeria will start programming application and earn money from themselves. It is difficult to estimate the number but this will be in several hundreds of millions of dollars.

Your data centre is located in Agbara, Ogun State. It is on the outskirts of metropolitan Lagos. What informed the choice because it appears to take you out of the scheme of things?

Another thing which is important is the location. During an extensive risk analysis, you will see that not every location is suitable for a data centre. For instance Abuja has a risk of bombing and Lekki has a risk of being flooded. Sometimes it is just not good enough to be very close to the city.

The Lagos Datacenter is a classified Tier 4 data centre, which provides the highest level of protection. Payment systems, military operations, medical operations, financial institutions all need a guaranteed 24/7 operation. Together with the Independent Power Plant (IPP), Lagos Datacenter can deliver that to its customers.

Another aspect which differentiates Lagos Datacenter from others is the training centre located next to it. To help our customers hold a grip on technology, it is most important that the local Nigeria workforce achieves the level of highly skilled. Lagos Datacenter Training Center will train employees in Nigeria and help them set up the state of the art infrastructure that IT demands these days. No need any more to bring in costly expatriate consultants, and local content will rise while juvenile deliquency would be banished.

Lagos itself is a difficult location especially if you consider factors like the sea level, traffic and supply of gas. It is better for the data centre to be in a safe environment where it has room to grow especially with the market. Also, Agbara is developing quickly and multinationals are settling down there, creating a secure environment. There is an abundant gas supply. Power supply is a great challenge in Nigeria. The Federal Government is working hard to put the problem behind the people of Nigeria. It is hoped that by the time ongoing power projects are completed, more megawatts of electricity will be added unto the national grid and that will spur the grwoth of business in the country. But for now, Agabara holds the key to overcome the power challenge in the country, especially for our business.

What roles would Lagos Datacenter play in the growth of business?

Data centres will continue to be at the heart of businesses as email grows, as CRM programmes grow, as everybody settles online. Now, everybody is busy with his own traditional system server and in-house devices. This will change radically. The growth of mobile devices, mobile telephony (remember that the total connected mobile telephone lines in Nigeria now is about 120 million according to the Nigerian Communications Commission). This is a tremendous growth opportunity for data centre business. Tied to this is the boom in mobile internet and the rising market of mobile applications developers. Remember too that the new Communications Technology Ministry headed by Mrs Omobola Johnson, is doing wonderfully well in the area of assisting the young software developers to grow through the establishment of software incubation centres in the country.  So, the future is so huge because everything that will be developed regarding software will move around data centre. This will help accelerate the growth of the economy.

But security has been an issue around data centre business in Nigeria?

Security does not have to be an issue as long as you take the appropriate decision from the engineering phase of the data centre to the execution of the data centre. You have to calculate risks but essentially for our data centre, physical security is the most important for the people we will host their services in the data centre. It is important that they develop resilient security system so that all online transaction will be protected.  I advise banks and other financial institutions to look to the PCID system certification. I advise Nigerian programmers to take the issue of security seriously in the course of designing their programmes. There is enough information now available for people to write secure software and deploy secure payment system. So, I think Nigeria can make the difference.

How does it reduce cost to companies?

The cost saving is achieved from a company’s own in-house infrastructure. A firm can reduce between 40 to 50% because first of all, it is shared power. That is, infrastructure is shared, culminating to reduction in energy cost. In Nigeria, it is estimated that power accounts for about 80 per cent of operating cost. So, in the data centre, everybody shares power facilities. Everybody shares UPS facilities, everybody shares the broadband facilities. Ultimately, this dovetails to substantial reduction in cost. Indeed, the cost saving element could be more than the 40-50%.

Some banks are building data centres, what is your take on this?

 There is a general rule in building data centre that everything is costing more so, if you look that every bank is having 40 racks with IG equipment and if you want to build your own data centre with 40 racks, the cost is 1000% higher than when you share it. So what you see is that even the Central Bank of Nigeria (CBN) is interested in banks having shared infrastructure to minimise cost. No matter the data centre you build, if it is too small, it will cost you twice, so sharing is the answer especially these days when companies are looking in the direction of cost reduction in the area of operation. Our data centre is built in such a manner that if bank A does not want to share with bank B, the two banks are physically separated.


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