Why and How to Bring More Data Centers to the Developing World

Data center operators are missing out on opportunities by not investing more in data centers located in developing nations.

Christopher Tozzi, Technology Analyst

July 20, 2023

4 Min Read
three workers in a field looking at a smartphone

One of the main reasons to choose a private data center or colocation facility for hosting workloads is that data centers provide more flexibility regarding the physical location where your workloads exist. In turn, data centers make it easier to place workloads closer to specific groups of end users in order to reduce latency and improve performance.

But if your end users are not based in North America, Europe, or certain parts of Asia, your ability to select a data center location close to them will be limited. The reason why is simple: Most data centers are concentrated in wealthy countries, not the developing world.

Therein lies both a challenge and an opportunity for the data center industry, which has good reason to consider investing more aggressively in data centers within developing countries. Here's why, along with what needs to happen to increase the number of data centers outside of developed nations.

Why the Developing World Needs Data Centers

The developing world does have some data centers. There are about 93 colocation centers in Africa, for example, and about a dozen data centers in central Asia.

Compared with parts of the world with higher GDPs, however, these are tiny numbers. California, for example, counts 239 colocation facilities, well over double the number in Africa, despite the fact that Africa is nearly seven times larger and home to around 30 times as many people as California. The story is similar if you compare most other locations in the United States or Europe with parts of the developing world.

Related:5 Factors to Consider When Selecting a Data Center Location

That means that end users in Africa, where about 650 million people own smartphones, and other developing nations are likely to encounter lower-quality digital services than those in a region where there are more data centers. With far fewer data centers to choose from, service providers can't place their workloads as close to users.

What Businesses Gain From Building More Data Centers Abroad

It's not just end users in a developing country who lose out when the data centers that they depend on are located mostly in distant countries. Data center operators and the businesses that depend on them are also missing opportunities by not investing more in data centers located in developing nations.

Specifically, they're missing out on benefits such as the following:

  • Lower real estate costs in developing countries, which translates to lower costs to build a data center.

  • The ability to take advantage of renewable energy sources, like solar and hydropower, that are available in the developing world.

  • Opportunities to build data centers in locations less prone to natural disaster.

Related:Things to Keep in Mind When Building a Data Center in 2023

Not every location in every developing country offers these advantages, of course. But by focusing on wealthier nations when deciding where to build new data centers, the data center industry narrows its ability to place data centers in opportune places from a cost, sustainability, and reliability perspective.

Challenges to Data Centers in the Developing World

What will it take to induce the industry to build more data centers in developing nations? The answers are not especially surprising. They boil down to creating the political, educational, and operational infrastructure necessary to incentivize more data center construction in developing countries.

Governments in these countries can help, according to the NGO CUTS Geneva, by establishing stronger regulations and policies to help incentivize data center construction. The group points to India as an example of a country outside of the West that has been successful in attracting data center construction thanks in part to favorable government policies.

The group also says that investment in training local workforces to operate data centers is important. So, of course, is ensuring that sufficient energy infrastructure exists to power data centers.


Solving challenges like these is important for attracting virtually any type of industry to developing countries. In that sense, the data center industry is not unique with regard to its presence (or lack thereof) in the developing world.

Still, expanding that presence will require active investment by data center operators and their partners in overcoming the challenges described above. They can't bring better digital services to people in developing countries or benefit from the cost, sustainability, and resiliency advantages of developing-world data center locations until they acknowledge what needs to be done and start working on solutions.

About the Author(s)

Christopher Tozzi

Technology Analyst, Fixate.IO

Christopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.

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