> While setting up a data center can cost millions of dollars, small Nigerian teams have found a workaround to this with “colocation”
Isn't that what everyone does when starting up a hosting company?
Looking at the websites of those companies, I also wouldn't characterize them as AWS or Google Cloud competitors. They offer Virtual Private Servers, FTP storage, maybe an S3 equivalent and Kubernetes. Maybe we can talk about S3 and Kubernetes being AWS-like, but those that offer only Virtual Servers and FTP space are competitors to "boring" web hosting services, no matter how often they use the word cloud.
It's cool that these services also exist in Nigeria, and I think it's right that Nigerian websites use Nigerian infrastructure. But the article does a poor job talking about it
We're pretty far into the "ditching cloud" hype cycle at the moment. While I think both sides have valid arguments, I think the whole drama tends to lead to unhelpful titles like this one.
Using this same criteria, I'm "building an affordable alternative to AWS" in my house by deploying an HA instance of Proxmox.
I don't think revenue numbers reflect that we are in a ditching the cloud hype cycle, particularly given emerging political risks.. At any given time there is hype for every possibility with controversy or ramifications and the software market is so much larger than what many of us were used to that any group seems large enough to be most of the market.
> The number of AWS customers that could survive on these services alone is likely higher than we'd suspect, especially for small companies
They could, but they will not.If your AWS is small there is no real motive to look for alternatives. Just stick with the brand you know.
Even a lot of developers are very resistant to using something 'non-standard'.I have had "thats a weird thing to do" reactions to suggestions such as running Postgres on EC2 because it would be easier than using RDS for a small DB.
Yeah...you're not really building an 'AWS' until you're building a hyperscaler and leveraging massive economies of scale. This is more "we're building a service that addressed local reality with local solutions", and that's a pretty awesome thing just in itself.
>you're not really building an 'AWS' until you're building a hyperscaler
AFAICT there's no claim that they're "building an AWS" (or attempting to). The title is "Nigerians are building affordable alternatives to AWS and Google Cloud".
So, these are alternatives and a skim of the article seems to follow.
I think we've been cloud-indoctrinated here (until recently) to believe viability means fullly-scalable cloud infrastructure.
> She would pay AWS in dollars even as Okra earned in naira because American cloud providers did not accept payments in local currency at the time.
> The payments to AWS gradually skyrocketed as the naira depreciated around 70% against the dollar between 2020 and 2024.
> Combine that with Nigeria’s economic challenges — rising inflation and forex volatility
> Ashiru took things into her own hands, and Okra set up cloud infrastructure with servers in data centers in Nigeria and South Africa in 2024
But the servers will also be priced in a more stable currency than the naira, so I'm not sure what the win is. I also googled "nigeria electric grid" to learn if they'd see how much pricing would be driven by inflation, but before I got there, saw that the national grid had 12 collapses in 2024. Generators and fuel are also priced in more stable currencies.
The data sovereignty argument is interesting. I know there are EU companies that only use EU data centers. We might see (if it's not already a thing) AWS have a nominally independent EU subsidiary that can ignore US regulators.
The AWS bill comes once a month whereas you buy servers maybe once a year or w/e and then you own them. This alone means that buying servers hedges you against inflation at least to some degree. If inflation is around 20% a year, those savings could be considerable.
12 collapses seems incredibly generous, I don't think I ever had fewer than five blackouts in a day for the few months that I stayed there. Maybe it's better for data centers than hotels but I really don't believe that there's a big difference.
The data sovereignty argument is likely more than just interesting, but can be essential to their startups surviving in the future. Who can look at and do what with the data, can be the difference between a country or region keeping a thriving infrastructure or having to outsource an entire related chain to somewhere else that can dictate terms or not be in their best interest.
Just as EU companies have the option of using only EU data centers, African countries can make the same argument for equivalent options, where AU companies (African Union) do the same.
>> She would pay AWS in dollars even as Okra earned in naira because American cloud providers did not accept payments in local currency at the time. The payments to AWS gradually skyrocketed as the naira depreciated around 70% against the dollar between 2020 and 2024.
So this is really a forex hedging problem.
Although there's an interesting twist with the local colo et al. competition who presumably have capital costs still denominated in foreign currencies (e.g. servers, generators, etc).
What should a foreign-currency-denominated cloud pricing do, when a customer's local currency depreciates?
It should be really not that hard to price in local denominations. Netflix charges different subscription costs in different countries and they have their infra built on other cloud providers.
Cost of hardware is constant. And the generator, fuel, local electricity, wages etc. CAN be denominated in local currency if the datacenter is local. Obviously if you’re using a server in the US region while sitting in Nigeria, you have no other discourse than pay USD, but for other regions, you should be able to charge in local currencies.
So if AWS prices in naira, and the naira loses 70% against the dollar, does AWS change their pricing? Or just take a 70% haircut on their Nigerian revenue?
I get local businesses want cost stability, but it seems like inflation will happen both ways: it'll just take longer to cascade through the supply chain with local-owned, local-priced providers.
The premise of the article seems a bit flawed: Nigerians are not replicating hyperscalers, but more like building local Hetzners. And that is a fine idea!
A big problem for people doing this, however, is that peering is pretty much nonexistent in Nigeria (and, for that matter, most of Africa). So, traffic from, say, Airtel (where a lot of consumers are) to Globacom (which hosts a lot of major businesses), will not stay on the continent, but go via London or Marseille instead. And, also worth keeping in mind, from Lagos to those destinations, Joburg or Cape Town are actually double the distance, even though they might 'sound' closer.
So, yeah, I wish everyone involved all the best, but it will be an uphill battle. Convenience and latency make 'big tech' pretty hard to avoid, and 'strong crypto' would be my bet over 'local facilities', but, yeah...
Yes that's crazy. I didn't know there was serious lack of peering in Nigeria and other countries on the continent.
In South Africa however, peering is excellent and has been for decades. I also love using services hosted in-country. I pinged a service now and got 4ms RTT, try that with a London based server.
Indeed Africa has some of the highest wholesale internet prices in the world.
Having said that, there's a couple of new subsea fiber optic cables going live in Africa imminently.
I would expect wholesale prices to drop substantially.
> from Lagos to those destinations, Joburg or Cape Town are actually double the distance
As the crow flies, Lagos is slightly closer to Cape Town than London, though Marseille is indeed closer than virtually any part of South Africa (though not by much).
Sun had their 'modular data center' concept[1], which was a self contained DC in a standard shipping container. You could chain them together. It wasn't obscenely expensive relatively speaking as I recall. I'm not sure if Sun was 'first', but these days there are all sorts of companies that do the same thing (I was recently in one from Delta). I don't know if they are applicable to the reality on the ground in Nigeria.
As others mentioned “everyone” has done variations of havac-and-racks-in-teu for the past 25 years. Heres Amazons version circa 2010, https://www.datacenterdynamics.com/en/news/amazon-sheds-ligh... You find them in old satellite photos of places like us-west-2. You still need site prep to support the weight, you still need power, external CRAC/H and/or water supply, and access & repairability sucks.
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Isn't that what everyone does when starting up a hosting company?
Looking at the websites of those companies, I also wouldn't characterize them as AWS or Google Cloud competitors. They offer Virtual Private Servers, FTP storage, maybe an S3 equivalent and Kubernetes. Maybe we can talk about S3 and Kubernetes being AWS-like, but those that offer only Virtual Servers and FTP space are competitors to "boring" web hosting services, no matter how often they use the word cloud.
It's cool that these services also exist in Nigeria, and I think it's right that Nigerian websites use Nigerian infrastructure. But the article does a poor job talking about it
Using this same criteria, I'm "building an affordable alternative to AWS" in my house by deploying an HA instance of Proxmox.
I'd say they're more "alternatives" at this point, as the article's title states.
But...
>They offer Virtual Private Servers, FTP storage, maybe an S3 equivalent and Kubernetes.
The number of AWS customers that could survive on these services alone is likely higher than we'd suspect, especially for small companies.
Throw in an RDS-equivalent and maybe load-balancing, and the number rises dramatically.
Of course, this also assumes the connective tissue is also in place (e.g. VPC, security groups, etc).
EDIT: I should've said "the number of AWS customers that currently survive on these services alone..."
They could, but they will not.If your AWS is small there is no real motive to look for alternatives. Just stick with the brand you know.
Even a lot of developers are very resistant to using something 'non-standard'.I have had "thats a weird thing to do" reactions to suggestions such as running Postgres on EC2 because it would be easier than using RDS for a small DB.
AFAICT there's no claim that they're "building an AWS" (or attempting to). The title is "Nigerians are building affordable alternatives to AWS and Google Cloud".
So, these are alternatives and a skim of the article seems to follow.
I think we've been cloud-indoctrinated here (until recently) to believe viability means fullly-scalable cloud infrastructure.
Dead Comment
> The payments to AWS gradually skyrocketed as the naira depreciated around 70% against the dollar between 2020 and 2024.
> Combine that with Nigeria’s economic challenges — rising inflation and forex volatility
> Ashiru took things into her own hands, and Okra set up cloud infrastructure with servers in data centers in Nigeria and South Africa in 2024
But the servers will also be priced in a more stable currency than the naira, so I'm not sure what the win is. I also googled "nigeria electric grid" to learn if they'd see how much pricing would be driven by inflation, but before I got there, saw that the national grid had 12 collapses in 2024. Generators and fuel are also priced in more stable currencies.
The data sovereignty argument is interesting. I know there are EU companies that only use EU data centers. We might see (if it's not already a thing) AWS have a nominally independent EU subsidiary that can ignore US regulators.
Just as EU companies have the option of using only EU data centers, African countries can make the same argument for equivalent options, where AU companies (African Union) do the same.
So this is really a forex hedging problem.
Although there's an interesting twist with the local colo et al. competition who presumably have capital costs still denominated in foreign currencies (e.g. servers, generators, etc).
What should a foreign-currency-denominated cloud pricing do, when a customer's local currency depreciates?
Cost of hardware is constant. And the generator, fuel, local electricity, wages etc. CAN be denominated in local currency if the datacenter is local. Obviously if you’re using a server in the US region while sitting in Nigeria, you have no other discourse than pay USD, but for other regions, you should be able to charge in local currencies.
So if AWS prices in naira, and the naira loses 70% against the dollar, does AWS change their pricing? Or just take a 70% haircut on their Nigerian revenue?
I get local businesses want cost stability, but it seems like inflation will happen both ways: it'll just take longer to cascade through the supply chain with local-owned, local-priced providers.
A big problem for people doing this, however, is that peering is pretty much nonexistent in Nigeria (and, for that matter, most of Africa). So, traffic from, say, Airtel (where a lot of consumers are) to Globacom (which hosts a lot of major businesses), will not stay on the continent, but go via London or Marseille instead. And, also worth keeping in mind, from Lagos to those destinations, Joburg or Cape Town are actually double the distance, even though they might 'sound' closer.
So, yeah, I wish everyone involved all the best, but it will be an uphill battle. Convenience and latency make 'big tech' pretty hard to avoid, and 'strong crypto' would be my bet over 'local facilities', but, yeah...
In South Africa however, peering is excellent and has been for decades. I also love using services hosted in-country. I pinged a service now and got 4ms RTT, try that with a London based server.
Having said that, there's a couple of new subsea fiber optic cables going live in Africa imminently. I would expect wholesale prices to drop substantially.
As the crow flies, Lagos is slightly closer to Cape Town than London, though Marseille is indeed closer than virtually any part of South Africa (though not by much).
So Hetzner is a term now lol. Soon we may also have the verb 'hetznering'...
"Have you people hetznered your datacenter?" "Why, yes we have!"...
When does it become feasible for poorer countries to start building them?
Seems that could have a dramatic impact on bringing these within reach.
[1] https://en.wikipedia.org/wiki/Sun_Modular_Datacenter
Does not seem cheap though by the first of it.
Also, pointing the MX record to smtp.google.com will not help with receiving email.