Nigerian banks spend $264, 000 yearly on data hosting

By Chike Onwuegbuchi |   24 August 2018   |   3:06 am  


Commercial banks in the country having adopted outsourcing model are spending some $264,000 every year on hosting of their data at different tier 111 data centres in the country, Nigeria CommuicationsWeek can now reveal.

This is in compliance with Central Bank of Nigeria (CBN) directive to either upgrade their data centres or host their data at a tier 111 data centre.
Data centre is an information technology infrastructure that houses servers and other storage facilities which are used by banks, among others for their core business processes.

Nigeria CommunicationsWeek investigations revealed that there are rack spaces at a typical data centre comprising of 42U and a 2U in a rack contains between 16 to 18 servers depending on their specifications, and cost $1,000 monthly to host a server at a data centre in the country.

Peter Iwegbu, managing director, Pn Consulting, and former group head, ebusiness and payment, Access bank, offering insight on hosting of server by banks, explained that banks’ servers are based on applications that the bank runs and that a typical bank in the country runs an average of 20 applications which means 20 servers.

“But today the story has changed with virtualization. This means that a bank can have one physical box with partitions inside of the box for the various applications that the bank runs. With this innovation, instead of a bank hosting 20 or more servers as the case was in the past the bank will host only one physical box reducing cost,” he added.

Ike Nnamani, managing director, Medallion Communications, a data centre operator, said that hosting of virtual machine at a tier 111 data centre depending on the specification of the machine and the operator of the data centre cost about $1,000 per month or less.

To this end, 21 commercial and one non-interest bank are spending some $264,000 to house their data at different data centres in the country annually.

James Agada, managing director, CWG plc, said: “From technical and economic considerations it is better for banks to outsource their data centres. But, then banks also consider security and control of their information warehoused in the data centre,” he said.

It was gathered that investing and managing of tier 111 data centre is a huge investment for banks to undertake going by the present economic situation in the country as well as high technical expertise it requires which is the reason they have opt for outsourcing.

Agada added that the specifications of tier 111 data centre is too big and not realistic for banks to adopt, he however, advocated outsourcing which he said some banks have already adopted. This allows banks to host their servers and other storage facilities at data centre of third party operator mostly telecommunications operators that have what it takes to run a data centre effectively.

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