Cloud computing has taken off dramatically across Africa’s major markets, but its benefits are experienced very differently in each region.
This was one of the key findings of Cloud Africa 2018, a research project conducted by World Wide Worx for global networking application company F5 Networks, across Kenya, Nigeria and South Africa earlier this year. Decision makers at 300 medium and large organisations were interviewed about cloud computing usage, benefits and intentions.
Over the five years since World Wide Worx conducted equivalent research, use of the Cloud among medium and large organisations has more than doubled, from fewer than 50% using it in 2013 to pervasive use in 2018.
“It is no longer about whether to use the cloud, but what benefits are being gained from the cloud,” says Arthur Goldstuck, managing director of World Wide Worx. “These depend heavily on the dynamics of each market, so we were not surprised to see that businesses in each country emphasised different benefits.”
This phenomenon could be seen with most advantages of the cloud, says Goldstuck.
“Respondents in Nigeria and Kenya named Business efficiency and Scalability by far the most important benefit, with 80% and 75% respectively selecting it as an advantage. Only 61% of South African respondents cited it.
“The opposite happened with the most important benefit among South Africans: Time-to-market or speed of deployment came in as the most prominent, at 68% of respondents. In contrast, only 48% of companies in Kenya and 28% in Nigeria named it as a key benefit.”
Goldstuck believes this is a function of the infrastructure challenges in developing information technology markets like Nigeria and Kenya, where the cloud is used to overcome the obstacles that get in the way of efficiency.
“In South Africa, with a more mature IT landscape, the focus is on the competition rather than the business itself,” he says.
This is borne out by the face that almost a quarter (23%) of South African respondents see the cloud as a platform for international expansion, whereas this figure drops below one in five in Kenya (17%) and below one in ten in Nigeria (6%). The one area where all three countries are level, using the cloud as a platform for service innovation, is ranked exceptionally low, at around 15% across these markets.
“Internationally, it is taken for granted that the cloud is an ideal platform for both innovation and for establishing a global footprint,” says Goldstuck. “In these three markets, these are benefits that are only now beginning to be recognised, but are still a long way from being a priority. The cloud is here, but its full benefits have not yet arrived.”
The cloud changes business
The cloud is making a striking impact on business in the three major African markets, according to the Cloud Africa 2018 study. However, the effect varies dramatically from country to country, with businesses in Nigeria seeing the highest impact, and South Africa the lowest.
No less than 82% of respondents in Nigeria had seen an impact on market share, with 48% seeing a high or very high impact. In Kenya, the overall positive impact dropped to 69%, but also with 48% seeing high or very high impact on market share. South Africa lagged behind, at an overall 66% positive impact but only 33% high or very high impact on market share.
“In some respects, however, all markets appear equal,” says Goldstuck. “Innovation within the organisation saw an equally high impact in the three markets, with a unanimous 100% positive impact in Nigeria, 98% in Kenya and 88% in South Africa.”
The cloud has had a similarly high positive impact on brand perception, following the same trend as for market share: 100%, 98% and 85% in Nigeria, Kenya and South Africa, respectively.
While the response was not quite as enthusiastic for customer experience, it remained exceptionally high: 96%, 85% and 81% in Nigeria, Kenya and South Africa, respectively.
“Nigeria came to the party late in terms of cloud uptake and innovation,” says Goldstuck. “Because the cloud leapfrogs traditional information technology systems, it means companies that embrace it are seeing an instant impact. This compares to a market like South Africa, where the cloud has been adopted only gradually, and legacy systems still play a key role for most companies.”
Cloud budgets aim for the sky
Companies in three of Africa’s major information technology markets are making up for lost time in allocating budgets to cloud computing.
This is one of the key findings of Cloud Africa 2018.
Nine out of ten (90%) companies in South Africa said they had increased spending on cloud computing last year, and 83% said they would increase these budgets in 2018. In Nigeria, 78% said they had increased budgets last year, and 94% said they would increase their spending this year. The biggest increase comes from Kenya, however, with 74% of companies having increased cloud budgets in 2017, rising to a massive 98% in 2018.
A minimal proportion of respondents – not more than 2% in any of the countries surveyed – said they had decreased cloud spending last year. For 2018, no companies in Kenya or Nigeria said they would decrease spending, although 5% of South African respondents said they would.
Broken down by industry in South Africa, the highest proportion of increased budgeting for 2018 was reported by IT software and services companies, at 92%, followed by Mining at 85% and Retail trade at 83%. The biggest drop in cloud budgeting was expected by the Engineering sector, with 13% declining in planned spending.
Apps define markets
A fascinating insight into the varying nature of Africa’ information tehcnology markets is provided by Cloud Africa 2018.
When asked which apps were critical to organisations, 68% of Nigerian and 67% of Kenyan companies said Service apps were critical, while only 40% of South African respondents named these as key.
On the other hand, South African companies were far more likely than those in the other countries to regard human resources apps as important: 43% of South African respondents named HR apps as critical to business, compared to 19% in Kenya and 10% in Nigeria.
“It is clear that more attention is paid to internally-focused apps in South Africa than in the other markets,” says Goldstuck. “In Nigeria and Kenya, on the other hand, customer-facing apps get the closest attention.”
A further indication of the low emphasis on internal apps is the rating of operational apps, which are seen as critical by only 15% of respondents in Kenya and 10% in Nigeria. While still low in South Africa, at 30%, it was more than double the proportion of the other two countries combined.
One area where all markets are equal, however, is in business apps, with only small variations between the three countries measured. Nigerian respondents took them slightly more seriously than the rest, with 76% seeing them as critical, while 72% of South African companies agreed and 67% of those in Kenya.
“Ultimately, the cloud is about better ways of doing business,” says Goldstuck. “That is reflected in cloud priorities and budgets across Africa.”
For more information contact:
World Wide Worx:
Mobile: 083 326 4345
Telephone: 011 782 7003
Email: arthur [at] worldwideworx [dot] com
Telephone: 011 575 6616
Email: mbarker [at] f5 [dot] com
Telephone: 011 575 6616
Email: mwalshaw [at] f5 [dot] com