Data centre business strategy planning

The problem

To improve its early cashflow, a national Tier III data centre in East Africa needed to maximise its enterprise cloud and data centre services revenue, so that it could meet its lender's financial repayment schedule. Analysys Mason was asked to develop a commercially sustainable business plan and strategy to meet these objectives.

The solution

We undertook competitive analysis by consulting the private sector and government agencies to understand current/future demand for data-centre services. We also made site visits to verify the data centre's capabilities in terms of space, capacity for expansion, fibre resilience and backup power.

We developed a portfolio of cloud-based services which were most in demand and devised a roll-out strategy for these services, using an in-house take-up curve to reflect local demand.

Based on this information we:

• proposed a pricing strategy that offered a discount to government agencies and charged a premium for private-sector customers wanting high-availability SLAs.
• developed a financial model to provide an EBITDA estimate and cashflow breakeven analysis, and validate the commercial sustainability of the data centre
• established the key principles of operation for the data centre, including organisational structure and staff numbers, shift patterns, management of customer care, and compliance with any regulatory requirements.

The result

The client was satisfied that, even under pessimistic scenarios, the data centre was commercially viable and could meet its long-term financing commitments.

The data centre has used our business plan as a guide to pricing its services and managing budget expectations.