Barrack ,

 We did a study for a client  last year and  our finding is that the current ones cannot benefit from economies of scale, are not able to attract high volume third party business both local as well as international – should be TIA942 and preferably Tier4 . data centre is a volume business and we need to break  the glass ceiling to compete globally. The fibres that landed in Kenya  will ONLY take away the business  even more efficiently  than  before  unless we have a national strategy or a big operator decides to step in  to  move the country   past the glass ceiling.

Cheers

MM

From: kictanet-bounces+mureithi=summitstrategies.co.ke@lists.kictanet.or.ke [mailto:kictanet-bounces+mureithi=summitstrategies.co.ke@lists.kictanet.or.ke] On Behalf Of Barrack Otieno
Sent: 06 February 2010 09:20
To: mureithi@summitstrategies.co.ke
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Local Content: Cost of Local Hosting

Wes,

Great observation, i know of a number of data centres locally, i wonder whether any research has been done to establish whether they are profitable ventures, as you have mentioned it seems cheaper to host externally however this has its own ramifications that you have rightly quoted.
Regards

On Fri, Feb 5, 2010 at 11:30 PM, wesley kirinya <kiriinya2000@yahoo.com> wrote:

Bandwidth costs seem to be coming down and that's welcome news. However an important area seems to be largely ignored and that's the cost of hosting locally.

A Dedicated server in the U.S/Europe (8 Core Processor, 6GB RAM, 3,000GB Bandwidth, 500GB disk space, ...) costs about $500/month. I believe in Kenya that would cost about 8-10 times more and that's without the 3,000GB bandwidth. With bandwidth becoming cheaper and better quality, it's far cheaper to host the local content internationally, and end-users might not feel a big difference in speed and quality.

Factors leading to high hosting cost might be cost of physical space and electricity (highly priced and unstable). If these are the major reasons why hosting costs are high, then we cannot expect the cost to come down any sooner no matter how many fibres are coming to Kenya.

Local companies (e.g. BPOs dealing with large volumes of data) and local branches of international companies looking for secure off-site back up might also do it from internationally located servers, where the companies running those servers not only offer lower cost but also more experience which leads to better service. As one of such companies puts it ,"98% of replies within 30 mintues, 99.9% Network Uptime Guarantee, ...".

Therefore we are looking at a situation where local content might be hosted internationally.

8~!

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Barrack O. Otieno
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