I am a cloud computing entrepreneur based in Kenya and whenever I have conversations about Cloud technology and its supposed success in the context of Africa there are always concerns expressed about the realism of this prospect and the uncertain future of complex inter-dependent technologies on a continent with vast financial and infrastructural challenges. Business lunches with the money men are the frothiest of them all:
I’ll say: “This is going to work here because not only do the rising number of those of us in the right position (infrastructure-wise) need these solutions for everyday life, we actually need them as well to facilitate the process of spreading their benefit to those who are not yet in our position.”
They’ll say: “Yes. But we’re not doubting the demand for it! If it’s good and you don’t have it then obviously you’ll want it -and proceed to get it the moment you can. What I’m talking about here are the prospects for real profit-making businesses! No matter how good the products are or how much people love them businesses are about making money and ultimately that comes down to one thing. The population’s purchasing power. And that’s just not big enough yet.”
To which I’ll respond: “May be, but you’re thinking percentages. If you deepen your analysis, the numbers are still in our favour. There’s one billion people in this place over 40% of whom pay for technology in some form or other every single day. That’s not extrapolation or conjecture. It’s reality. Even if you get just 1% of this marketshare then that’s a very successful business by the numbers and we’re talking cold, hard cash. The fact that most people think what you’re thinking means competition on the ground is scarce so that actually becomes doable. Don’t forget however that purchasing power is actually on the rise so by the time you accomplish this your potential market will have expanded. That’s both revenue and growth. It’s all any business needs.”
That’s usually followed by an additional half hour of intense debate ending in a slow nod that shows skeptical acceptance on their part and engaging as these conversations usually are I’d rather state all this outright and simply share a link in the future. This one is for the technologists.
If you’re wondering what the future for Cloud technology in Africa looks like, the answer is bright. Very bright. There are many reasons why I believe Cloud as a technology will prosper in Africa –not just ideally but also practically and here are a few of them:
- Rising Exposure: The African market has for the past few years been getting a lot of exposure to new & increasingly advanced internet technologies. The increased familiarity with tech is making people more accustomed to & thus more receptive to advanced technology-based solutions like cloud. With the government in Kenya aiming to introduce computing into the education system from the very beginning of Primary school this is only bound to rise.
- Smart Device Adoption: With a growing middle class and plummeting mobile phone prices at he base of the pyramid we find that there is an increasing number of users who own one or more smart devices or at least use them on a daily basis. These devices are web enabled and optimized for easy use of web-based services such as cloud. For anyone with a web-enabled device (hardware + connectivity) already, the initial friction to adoption of cloud technology is almost negligible.
- Data Storage: These devices contain lots of information. The amount of content owned/stored by today’s average smart device user is 8 times that of an average user just 8 years ago (due to a combination of increased default memory on the devices but also proliferation of digital content leading to a spike in it consumability). They need somewhere to keep all this data & even better, somewhere they can access it remotely whenever they need to. Additionally, the more stuff we accumulate the more we have to lose. Enter cloud data-back-up solutions.
- Data Safety: Users hate loosing their files when devices crash, are damaged or lost . 9 out of 10 smart device users in Africa say the have lost data on devices in the past. 8 out of these 9 say it was crucial information. On average only 1 out of these 8 had their files backed up for safe-keeping at the time.Low penetration + large population + growing infrastructure = huge opportunityThis creates the demand for safe storage/backup solutions. Word is spreading about the value of device back-ups. As people discover the availability of cheap back-up solutions in the cloud their popularity is growing.
- Improving internet quality: African internet infrastructure still has a very long way to go before African web users are at par with their counterparts in developed countries but with the arrival of the sub marine cables the quality of bandwidth ISPs are offering has improved drastically (in the areas where web infrastructure already existed. Actual expansion to new areas is still dragging on though now at a slightly faster rate).
- Falling cost of internet connection: With the arrival of the marine cables the supply of bandwidth available has gone up and this is bringing the cost of internet connection down making it affordable to more people and making it cheaper for the users who can already afford it now to consume even more internet. This significantly increases the market for cloud solutions.
- Poor “large screen†device to population ratio: There are a number of things that users anywhere in the world hate doing on small screens such as those on mobile phones e.g. watching videos/movies and it is no different in Africa. For these needs users prefer devices with larger screens such as tablets, laptops & desktops. However as mobile adoption numbers skyrocket in Africa, larger screen devices are still extremely rare especially in non-urban areas. Desktop devices stats are still dismal even in places where desktops are specifically required. This –believe it or not- is actually a good thing for cloud and here’s why. A rural institution like a school with limited devices but many users cannot handle the amount of content generated by these users without continuously spending on increasing memory capabilities or being forced to delete even fairly recent data to create space. To solve this problem, an elegant solution is required. Virtual storage unattached to hardware. Enter cloud.
- E-learning’s rising popularity: We are currently witnessing the rise of e-learning as a favoured education solution in Africa and this (as demonstrated above) creates big demand for cloud services to properly facilitate it by managing such things as curriculum synchronization and monitoring, remote access to educational resources and collaboration between distant institutions.
- Media Content Demand: The amazing demand for multimedia content (music, video & e-books) in Africa is rising while more and more convenient storage solutions for all of it are becoming cheaper and more available on the cloud. User adoption in this very low risk case is proving to be almost inevitable over time.
- BYOD: The emergence of the BYOD (Bring Your Own Device) trend in the corporate world is spreading to companies in Africa with some CIOs planning adoption from as soon as late 2013. This is a trend that obviously requires multiple proper cloud & mobility solutions to manage the experience effectively. Need in a particular area gives rise to businesses in that area and businesses are always looking to expand their market and thus end up marketing their solution to others who may otherwise never have come into that particular matter.
- Business Intelligence: The rise of business intelligence (BI) as a crucial business tool means that companies are now collecting more information, as a result of which they are requiring more storage. For efficiency they require it as much of the process done in the field as fast as possible which then requires mobility (remote access) with lots of processing power attached -not just the office devices but the devices in the field. Enter enterprise cloud.
- Buzzing start-up scene: Africa is undergoing a renaissance in many ways but none is as highly publicized as the ‘tech revolution’ currently sweeping the continent. Start-ups are popping up everywhere doing everything from mobile money hyper-integration to energy, health, education and water crisis resolution. We have plenty of problems to solve but as explained earlier the chips are lining up in a way that makes this more of a tremenous opportunity for the innovative mind rather than a put down. So how does this contribute to cloud technology and it’s prosperity? It does so in 2 distinct ways:First, good start-ups with good ideas and good business potential (eventually) attract investors. With the right mix and enough investment cycles several huge successes are bound to emerge. When this happens the ecosystem reacts by attracting even more capital. It slowly erases the investor skepticism that afflicts any new eco-system, replacing it with a kind of optimism. This tends to benefit the entire startup eco-system because even those startups that may not have been able to get any (or enough) funding before now have easier access to it. Part of this crowd will be a number of cloud technology based startups and this effect will greatly enhance their chances at success. The nature of cloud tech is that resources in one place can benefit many others and have a wide impact -and I think this spreads to the business of it as well so if even only a handful of them actually reach large-scale success their effect will be pretty wide-spread and will carry on the the coming generation of startups as well.Secondly, modern startups anywhere in the world tend to be very tech-centric in the way they do things whther or not they are themselves tech startups (not all startups that use technology to achieve their goals qualify to be called tech startups by the way, but that is a story for another post). The booming start-up culture breeds young people who embrace technology and push it to its extremes. These are the same young people who work in our companies and operate our businesses. By and large you find the greater shift happening over time from small isolated bubbles of email and facebook usage to full scale Dropbox type cloud solutions usage.
- Massive size of opportunity (Growth potential): Africa has 1.1 Billion people. The adoption of mobile devices is cresting (penetration is at 78% as of 2012) and the adoption of smart devices is on the rise as their cost plummets to affordable rates. True, most of these are feature phones with no web connectivity but the hardware comanies are working hard on commanding large market-share positions and the competition is yielding a race to equip every mobile phone user with a smartphone of some kind over the next decade. The size of this market cannot be ignored and it has managed to catch the attention of even the largest names in the tech. Giants like Microsoft, Google, IBM and many others are already on the ground (and have been for quite a while) trying to grab as much market share as possible with many others on the way. Hardware companies like intel, HP, Samsung & Dell are solidfying their presence on the ground as well. Even the almighty Apple recently announced plans to increase its device market share in Africa by offering its costly devices on hire purchase to make them more affordable. Their steep device cost is considered the main hindrance to Apple’s prosperity in the African space.
With the tech space in Africa evolving faster than almost anywhere else in the world and disruptive technologies being established everyday the future for any tech that is in as much demand as cloud continues to be, seems very bright and everyone is watching keenly. We do not yet have high-profile examples that immediately come to mind but I am confident that some of the cloud solutions currently being bred and tested in Africa will probably end up being extremely successful on an international scale. Watch this space and pretty soon you’ll realize that you’re actually doing it on the cloud.