In an age of accelerated digital migration and modernization movements, the Cloud has been touted as a veritable salvation for continued operations and increased efficiency. But is Africa keeping up with this global trend? The answer, you will find, lies somewhere in the middle.
If you look at Africa from an economic development standpoint, you would be quick to assume the continent is not geared up to take advantage of the latest trends in Cloud technology. But you would be wrong. The mere fact that Africa has experienced historical low economic growth is the reason that it is perfectly suited to jump onto the Cloud faster than her peers.
International investors are clamoring to the front of the investment line to fund a boom in the African Cloud Computing market. The proliferation of smartphones, mass adoption of business software and general economic growth prospects have seen a great demand for data centers to be built within continental borders. A young mobile population is driving end-user demand and the potential for the next Cloud boom.
Africa currently accounts for less than 1% of the global public Cloud services revenue (Xalam report) despite accounting for 5% of the world’s GDP and 17% of its population. However, its capacity has doubled in the past three years. But and there is always a but, Africa does lag as one would expect as we are still talking about a Cloud penetration rate of around 15%, but a forecasted public growth rate of between 17 and 20 CAGR (Xalam report – The Rise of the African Cloud)
What is causing the lag?
There are two main culprits for Cloud’s lack of momentum in Africa. First and foremost, piracy is still a big problem on the continent. Many businesses continue to use legacy on-prem versions of software that are pirated. Although this is true all over the world, it is especially true in Africa, where cost occasionally eclipses security or features.
In its June 2018 report, The Software Alliance reported that the overall rate of pirated software across the Middle East and Africa was 56%. Three years down the line, and I can promise you that not much has changed. It is extremely difficult to pursue and prosecute.
On the plus side, from my perspective at Liquid Intelligent Technologies, we are seeing an increasing number of formal African businesses make the move to Cloud with very little resistance and an increase in productivity. Businesses understand the reduced security risk combined with the latest features are worth the monthly subscription.
Secondly, the move to Cloud is not an easy endeavor by any means. We have seen a lot of fragmentation when it comes to business comprehension. There is a tug of war between what they can do with the Cloud versus what they are willing to do. However, leaders of organizations are starting to understand that any strategy must include technological investments.
Unfortunately, with Cloud, there has been an all or nothing mentality. Yet, the rise of data protection and privacy laws is creating lines in the sand regarding the movement of data. Many businesses that were keen to move entirely into the public Cloud are now apprehensive and have adopted a hybrid Cloud model. These developments have somewhat fragmented adoption and created hesitancy.
The rise of hybrid – the end of the road for some, a stepping stone for others
Why is it that in Africa, most new developments are broken down into a public versus private debate? With the Cloud, the two are no different. Typically, Cloud investments exist as a single architectural deployment – ie, public or private. Public being the big Cloud service providers like Amazon Web Services and Microsoft Azure, and private being an environment that is wholly controlled by a single customer, generally purpose-built for a particular business.
Yet, many have chosen the best of both worlds as a hybrid Cloud solution operates across both. Hybrid Cloud combines a private Cloud with one or more public Cloud services where the business makes use of workloads optimized for the deployment model selected. There are inherent advantages to the public Cloud, including almost infinite scalability and an unbeatable breadth of independent service vendor (ISV) offerings. The private Cloud suits low latency data regulatory requirements and is built for purpose installations. In the end, in these precarious times, hybrid Cloud services are becoming powerful as it gives businesses greater control over their private data.
Is this simply a stepping stone on the road to a full Cloud solution? I would argue, yes. For many businesses, hybrid is a step on the journey to a full Cloud solution. We are still in the development phase for Cloud in the world, let alone Africa. As more infrastructure arises in all corners of the continent and the world, businesses will find the allure of a full Cloud solution may be too tempting to pass up.
But, if you are downsizing and getting rid of corporate offices or storefronts, you then need the flexibility for the end-users to access their data through whatever application, no matter where that user is. There should be no interruption of services, especially if it is financial information like an online banking application. This means that moving all data in one go to the Cloud remains problematic.
Many organizations worldwide are struggling with harnessing the full capabilities of their Cloud environments. An IBM report suggests that though 90% of companies globally were “on the Cloud” by 2019, only about 20% of their workloads had moved to a Cloud environment.
The Cost Paradox of Cloud
Having said all this, the paradox of scale means that you are probably going to need your own private Cloud and data centers once you grow big enough. If you are the size of Uber or Netflix, it makes sense to eventually start building your own data centers. In 2019, various sources estimate that AWS charged Netflix US$9.6 million a month for services rendered. That’s a lot of money.
Although you can count on one hand the number of businesses in the world that require that amount of Cloud space. For everyone else, depending on your data restrictions, regulations, and ability to operate efficiently – a hybrid Cloud solution may be the end of the road and work just fine. But don’t think your opinion isn’t going to change as the tech evolves. There is always a better solution on the horizon.
Winston Ritson is the Group Head for Cloud Services at Liquid Intelligent Technologies.