There is a massive opportunity for cloud service providers (CSPs) to capitalise on Africa’s rapid adoption of mobile network technology.
This is one of the findings from a survey conducted by IDG Connect on behalf of SAP Africa. “Africa Set for Cloud Market Expansion” sets out the possibility for new revenue streams and business that will be accessible to CSPs that are targeting large enterprise customers during 2014 and 2015.
Many organisations within South Africa, Algeria, Kenya, Morocco, and Nigeria appear poised to increase their spending on cloud hosted infrastructure (IaaS), platform as a service (PaaS) and software as a service (SaaS) within 2014- 2015 and beyond.
This, as the economic outlook for the wider region looks strong, with the International Monetary Fund (IMF) predicting in April 2014 that the growth of the gross domestic product in Sub-Saharan Africa is likely to increase to 5,5% this year.
According to the survey, the majority of organisations within South Africa, Algeria, Kenya, Morocco and Nigeria have moved some virtual workloads, applications or services into cloud hosted IaaS, PaaS or SaaS environments, or have started preparing to do so.
“There is however, a sizeable minority that has yet to formulate a cloud migration strategy on any meaningful scale,” says Chris Willcocks, director: cloud and line of business at SAP Africa who spoke at a media event announcing these results yesterday.
“Compared to other global regions such as western Europe, Africa’s cloud adoption levels are only about half by comparison. This only serves to highlight the massive opportunity that exists on the continent for CSPs that are searching for potential new customers.”
Willcocks says that, within Africa, some countries have embraced cloud services much earlier than others. South Africa and Nigeria appear furthest advanced in current adoption, with 30% and 35% of respondents saying they have already made significant progress with cloud implementation strategies, though respondents from these two countries also recorded the lowest number of organisations to have undertaken little or no activity (27% and 24%).
At the other end of the cloud adoption spectrum, Kenya experiencing the highest percentage (42%) of respondents whose employers had undertaken little or no activity in terms of cloud migration, substantially higher than the average across all five countries (30%).
There are also wide variations in the deployment of SaaS for the delivery of customer relationship management, with South African respondents indicating that they did not currently use SaaS at all. SaaS being employed within an CRM context is also very limited in its usage within Kenya (6%) and Algeria/Morocco (19%), compared to 30% of organisations in Nigeria who said that they are making use of these services, he adds.
Africa might not match the rest of the world when it comes to cloud adoption, but the continent does mirror other regions of the world in its appraisal of the expected benefits of cloud computing.
Chief amongst these is accessibility to applications and services from mobile devices accessibility to applications and services from mobile devices, followed by improved security and governance concerning data privacy and compliance with government as well as industry regulatory frameworks which scored highly within all five countries.
Given the current state of the global economy, adopting new technology in order to reduced capital expenditure on hardware and software also rated highly on the list of possible benefits to cloud adoption.
Currently, fixed telecommunications infrastructure problems relating to the availability, reliability and security of wide area network and broadband links may be partly responsible for the relatively slow take up of cloud within Africa to date.
“Although the survey results paint a mixed picture for cloud service adoption in Africa, it does serve to illustrate the extent of the commercial opportunity for CSPs in this territory,” Willcocks adds.