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Mainframe Solutions

Out of (South) Africa

by Dr.Steve.Guendert on ‎07-12-2013 06:01 AM - last edited on ‎10-28-2013 09:05 PM by bcm1 (3,130 Views)

I recently returned from a week long business trip to South Africa.  I typically go to South Africa every 12-15 months to meet with our OEM partners, and our FICON/mainframe customers.  Brocade has a great two man team in South Africa with Nick Pateman and Carlos Isidro.  On this most recent trip I met with several FICON customers as well as IBM, HDS, and EMC.  Our meetings consisted of a general Brocade FICON update: how our new technology enhancements with FOS 7.0 and 7.1 work, a product roadmap discussion, and usually some more technical Q&A.  I will be going back in late November to teach our FICON architect certification course.


One of the things I have noticed since my first trip to South Africa in early 2008 is the growth in the IT industry.  The three OEM partners I work with most often (IBM, HDS, EMC) are all experiencing tremendous growth in their business.  The same is true for Brocade.  This growth from our OEMs is not just in South Africa-it is in the entire African continent.  They already have, or are opening offices and facilities in Kenya, Morocco, Namibia, Nigeria, Tanzania, Senegal, and Cameroon.  IBM is even apparently opening a mainframe skills center in Johannesburg to cover the continent and train new mainframers.  Africa is the next great growth market for the IT industry, and with that it is the next great growth market for mainframes, mainframe attached storage, and SAN.  It could even be thought of as the last frontier of IT.  And the growth is being driven from South Africa.


Here are some interesting facts:


According to the Harvard Business Review:

1) Over the past decade, Africa’s real GDP grew by 4.7% a year, on average—twice the pace of its growth in the 1980s and 1990s.

2) By 2009, Africa’s collective GDP of $1.6 trillion was roughly equal to Brazil’s or Russia’s.

3) Telecom companies in Africa have added 316 million subscribers—more than the entire U.S. population—since 2000.

4) According to UN data, Africa offers a higher return on investment than any other emerging market.


How important is Africa to IBM?  According to an article in the February 16, 2013 issue of The Economist

1) Since mid-2011 it has set up shop in Angola, Mauritius and Tanzania, as well as Senegal.

2) IBM now boasts a presence in more than 20 of Africa’s 54 countries.

3) Last August IBM opened a research lab in Nairobi, one of only 12 in the world.

4) And between February 5th and 7th 2013, Ginni Rometty, IBM chief executive, and all who report directly to her met dozens of African customers, actual and prospective, in Johannesburg and the Kenyan capital. It was, Mrs Rometty said, the first time the whole top brass had assembled outside New York since she became the boss just over a year ago.


According to a February 21, 2013 Bloomberg Business Week article titled For IBM, Africa Is Risky and Rife With Opportunity":


"IBM’s global revenue dipped 2.3 percent, to $104.5 billion, in 2012, about the same level it was in 2008. Of that, sales out of Africa kicked in about $400 million and are forecast to more than double and surpass $1 billion in 2015...... That’s faster growth than IBM saw in India, where it started a push in 1992 and surpassed $1 billion in revenue in 2007, the person said."


Here is a slide from a recent IBM Investor Briefing:





Over the past three years, IBM has new mainframe customers in Senegal, Cameroon, Ethiopia, Nigeria, and Namibia.  Financial institutions in Africa are rapidly realizing what the rest of the world has known since April 1964: the mainframe is the best platform to run mission critical business applications. 


Africa truly is the next great frontier for IBM mainframes, as well as mainframe storage and its connectivity. And, it's being driven out of South Africa.  Brocade is right there.


I look forward to future trips to South Africa, and meeting many of the new mainframers in other African nations.


Dr. Steve