A data centre is not a cloud platform: Why the distinction matters

Many people mistakenly use the terms "data centre" and "cloud" interchangeably. While they are related, they are distinct concepts with different implications. A data centre is a physical building designed to house and secure computers, providing a stable power supply, cooling, security, and internet connectivity to keep the systems running continuously.

Conversely, a cloud platform is a service that allows customers to rent computing power, storage, and networking resources on-demand, scaling up or down as needed and paying only for what they use. Think of an airport and an airline: the airport provides the infrastructure, while the airline offers the actual service to passengers.

Not all data centres offer cloud services, and not all cloud services are hosted in a data centre. Data centres are graded based on their reliability, with four levels ranging from Tier I, which has no backup equipment and any fault results in downtime, to Tier IV, which can survive any single failure. Companies that rent space for their servers in another facility are engaging in "colocation."

Companies must be certified by the Uptime Institute to be considered Tier III or higher. When a Nigerian bank claims its data is "in the cloud," it often means the data is stored outside the country. This distinction is crucial as regulators, such as Nigeria's Central Bank, aim to keep payment data within local infrastructure by 2027.

Building local data centres and cloud platforms with Tier III reliability is essential to meet these demands. Nigeria currently has around 26 operational data centres, with projections of up to 300 MW of capacity by 2030. While infrastructure is strong, the next step is developing cloud platforms to leverage these resources effectively.

Policymakers and business leaders should focus on both having enough data centres and establishing cloud platforms to utilize them fully.