Can cloud computing take off in Africa?

When it comes to information technology in Africa, analysts will tell you, this continent has an amazing ability to leapfrog.

Forget old-school landlines and desktop computers. Many in sub-Saharan Africa have skipped directly to mobile devices. And while Africa, like other emerging markets, has been slow to embrace cloud computing, it is starting to take off here, with tech experts touting the cloud’s big and perhaps unseen potential.

Cloud computing may in fact prove ideal for Africa, where there is little traditional internet infrastructure, unreliable electricity grids in many areas — making on-site storage impractical — and an ongoing boom in business and development.

Len Weincier, who founded CloudAfrica in 2009, said one of the biggest hurdles is a lack of knowledge about the benefits of cloud computing.

What Exactly does it mean?

Cloud computing, for the uninitiated, means storing data on remote servers accessed through the internet rather than on hard drives or local computers. This includes everything from consumer services like Dropbox to large companies storing all their data remotely.

Weincier said his start-up company, a Johannesburg-based data center that focuses on Africa, faces the challenge of educating potential customers, and convincing them that their data is secure.

“People are not very aware of what is this stuff, of what is the cloud,” he said. “The difficulty we’re facing is that people can’t touch and see the thing. There’s a mental shift that’s got to happen.”

CloudAfrica is focusing its efforts on South Africa at present, where demand is greatest, but it has plans for expansion elsewhere on the continent.

Weincier said that with improving internet connectivity in Africa, he expects uptake to happen “very quickly.”

Arthur Goldstuck, the managing director of World Wide Worx, a technology research firm based in Johannesburg, said that so far South Africa is “way ahead” of other African markets, with rapid adoption in the corporate sector.

More than half of large local businesses in South Africa are using cloud services, and another quarter say they are intending to use them, Goldstuck said. Cost savings, flexibility and IT efficiency are the main motivating factors.

“We are starting to see an appetite emerging in major markets like Nigeria and Kenya, but it is still early days,” Goldstuck said.

He said that slow connectivity and low bandwidth have hindered the uptake of cloud computing.

“If you don’t have really good bandwidth, you’re not going to want to rely on cloud services,” he explained.

Frank Rizzo, technology sector leader for Africa at KPMG, said adoption of cloud computing is still at a “very, very early stage in the cycle,” similar to what’s happening in other emerging markets.

“There’s huge potential,” Rizzo said. “Because of the lack of infrastructure that we’ve had generally around communication, what cloud does is enable companies and governments to leapfrog the legacy environment.”

The opportunities are huge and the returns are enormous

The opportunities are huge and the returns are enormous

Government regulations and laws are also factors affecting the widespread adoption of cloud computing, he said, as well as the question of taxes: if you set up your business in the cloud, then the location of the server could determine the tax regime.

“There’s a couple of [African] countries I have discovered that have it written into the constitution that data can’t be moved across borders,” Rizzo said. “In this day and age that’s not practical.”

“On the positive side there’s all the internet bandwidth that is landing on the continent and that is increasing almost day by day,” he added. “In Nigeria specifically, internet adoption is accelerating at a scary, scary rate.”

Rizzo said he is hearing reports from colleagues in Kenya of new initiatives related to e-education and e-health — using mobile devices and the cloud to provide health services, for example.

“Governments are looking at this as a way to connect with their citizens,” he said.

So far in Kenya there are very few firms willing to put their entire businesses in the cloud. But there is already an acceptance on an individual level.

Rizzo noted that Kenya is where the M-Pesa phenomenon of mobile phone-based money transfers began, and this has driven cloud awareness among consumers.

“Because there’s a high level of awareness, the Kenyans are starting to say, ‘OK, now what else can we do?’”

David Okwara

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One Response to Can cloud computing take off in Africa?

  1. Mayank April 18, 2015 at 10:59 am #

    Thanks for the article Frank. I think one of the things that may still keep the uptake of cloud slow in the enterprise market is that companies are still looking to maximize return on investment on the capital expenditure they have already put into their server rooms. Once the infrastructure has reached its end of life and goes out of warranty they may start to look at cloud more seriously.

    From a consumer perspective, I think there is room for more cloud-based software as a service (SaaS) services that need to come to the fore in order for cloud to pick up – in Africa, there are some cool new innovative cloud-based software services being developed and as more start to solve uniquely African problems, the greater the uptake of these services, resulting in greater demand for cloud based infrastructure from the providers of these SaaS solutions.

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