Kathy Gibson reports – Cloud holds the promise of massive opportunities for Africa, allowing startups and smaller organisations to compete on the same footing as global brands.

That’s the word from Arthur Goldstuck, MD of World Wide Worx, who was addressing delegates at the Red Hat South Africa Day in Johannesburg this morning.

Goldstuck says business focus has shifted from ensuring continuity in the early days of the Covid crisis, to return on investment (ROI), to business resilience, then targeted investment and the final step in Covid recovery which sees digital revenue now driving business models.

“Companies that don’t have a digital strategy and focus will be left behind,” he says. “The big brands of today may not be the leaders – or even in existence – in the future.”

Interim findings from the Cloud in Africa 2022 study by WWW show that more than half of organisations still have at least 25% of workers working remotely, indicating the hybrid working model is here to stay.

There are still just over 4% of companies not in the cloud, but the move to cloud is pretty much unanimous

“People intuitively think the main criterion in selecting a cloud provider must be price: but it almost never is,” Goldstuck says. “Price is the main criterion for just 17% of respondents. Overwhelmingly, the main criterion is ongoing quality of service.”

When it comes to where companies store their data, 43% do so exclusive off-premise, 37% on-premise, and just 18% spread across both.

The majority of companies (82%) say their applications are hosted in the cloud, only 22% are on-premise, and co-location comes in at 10,5%

Not surprisingly, backup is the biggest application that companies are using in the cloud, closely followed by customer services.

Sixty five percent of companies increased their spending in the cloud over the last year, and 73% plan to increase it in the coming year.

“The cloud is where companies are going to be living, and they want to invest in better living conditions.”

Most respondents don’t have any security concerns about being in the cloud, but around one-quarter are worried about data security and breaches.

Cloud trends in strategy are dominated by software as a service, with more than 60% of respondents planning to go this route. Infrastructure as a service is also on the radar, followed by security as a service.

Overwhelmingly, the single biggest difficulty in cloud adoption (15% of respondents) are around costs exceeding budgeted forecasts.

“So budget becomes the first big obstacle to the cloud,” says Goldstuck.

The second major issue is lack of skills, cited by almost one third of respondents who had issues in cloud adoption.

“Skills is the more difficult challenge to overcome, and is the final frontier for embracing the cloud,” Goldstuck says.

Open source is quickly becoming a major force within enterprises, with close to 70% saying it is deployed. It is being employed mostly in databases and storage, followed by Web servers and software development.

The benefits of cloud migration have been significant, he adds: 64% of respondents say they have seen moderate business growth, and 19% had strong growth, and about 10% saw some growth. “So more than 92% of organisations experienced business growth because of cloud migration,” says Goldstuck. “There is a near-unanimity in growth as a result of the cloud.”

Moving to the cloud has also had an impact on innovation: 38% said cloud had a high impact on innovation; and 33% say it had some impact. “That’s 70% of respondents that saw an impact on innovation – so it has had an effect on efficiency and competitiveness.”

Importantly, 92% of companies say that had some experience on customer experience – a number that correlates exactly to those companies that experienced business growth.

The main benefits of cloud adoption are agility and operational flexibility, cited by more than half respondents. Coming in at second is improved customer service, followed by scalability and finally cost savings.

“But there is a rite of passage to make successful use of the cloud,” Goldstuck says. “The skills divide is the single biggest gap; then the budget divide.

“But given all of that: the cloud is no longer a choice: it is the ultimate no-brainer.”