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What Does the Future of the Cloud Look Like in Developing Markets?

Cloud computing has taken the world by storm in a very short time, with organisations, globally, adopting the technology and making use of its vast potential. Companies across industries in the developed world have seen its immense potential and have been quick in shifting their applications to the cloud. Further, while developing countries were typically slow on the uptake, cloud computing has reached these markets, too. Countries like Russia, South Africa, Kenya, Nigeria and Ivory Coast are catching on to the technology. Although far behind their counterparts in developed countries. Quite a few enterprises in these countries are starting to shift their applications into the cloud.

Current trends

However, it seems that Africa has some way to go on cloud-readiness and full-fledged cloud adoption. In fact, according to a report by Xalam Analytics, a US-based research firm, less than 1% of global public cloud services revenue was generated in Africa. The report further stated that out of the 25 African countries analysed, only five – South Africa, Mauritius, Kenya, Tunisia and Morocco – could be considered cloud-ready, while 11 more are on the cusp of cloud readiness.

Yet, in the countries that have been identified as cloud ready, the tech is already beginning to boom. At least four hyperscale data centres are already operational in the continent, including two from Microsoft’s Azure Africa in Johannesburg and Cape Town, and one of Huawei, also in South Africa. Further, at least two more cloud centres are expected to come up in the coming year, which includes Amazon Web Services’ (AWS). Microsoft, AWS, Google, Huawei and VMWare are all battling for the opportunity to build the foundations of their services in Africa, preparing for the continent’s foray into this technology.

Challenges

All this interest is despite the challenges faced. According to Xalam’s report, countries in Africa do not have sufficient connectivity speeds to support reliable cloud usage at affordable rates. Another major issue is the deep provider distrust among African enterprises, which is not compatible with the cloud’s inherent necessity of reliance on third party providers. The distrust arises partly due to the data sovereignty and compliance laws in many countries, which creates the impression that the public cloud is unsafe. The local compliance laws, themselves, present another obstacle for cloud adoption.  (comment)

Trent Odgers, Veeam’s cloud manager for Africa, was quoted as saying, “Because a number of African countries have data sovereignty and compliance laws that prevent data from leaving the country, it would mean that public cloud providers would need to build an offering for each country.” 

The last major challenge arises due to issues with infrastructure. Although progress has been made, a lot remains to be done before reliable infrastructure is available through the continent. According to Johannesburg-based Altron Karabina’s cloud specialist Corne du Preez, “Although there are a number of fibre connections up the East and West Coast of Africa, the network infrastructure in African countries are either not available, or too expensive to consider.”comment 

Opportunities

Despite all these challenges, the cloud services sector is beginning to blossom in Africa. This is a result of the significant opportunities the sector presents. Even in its early stages of development, the cloud services sector has made a far-reaching impact in Africa. Banks are already investing in Artificial Intelligence and Machine Learning tools to improve customer experience. New financial institutions are emerging with at least a part of their applications based in the cloud. Instances of cloud usage include Kenya’s government-managed Huduma centres, which are using VMWare’s cloud infrastructure to enhance public service delivery, and several African cloud-native start-ups, who are leveraging the cloud with plans to disrupt the entire industry. In fact, Xalam Analytics forecasts revenue from African public cloud services to triple over the period from 2018 to 2023.

All in all, it can be said that the cloud is gaining ground in developing markets like Africa, slowly but surely. Investments are pouring in, and the battle is on between major cloud service providers, to establish their centres in the continent. There are several challenges, of course, but the opportunities are equally plentiful.

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