Into Africa: Cloud brings customers and innovation

JOHANNESBURG (Capital Markets in Africa):– South Africa and Kenya are worlds apart in their embrace of information technology, but they have one thing in common: they jointly lead the African continent in having the biggest impact of cloud computing on customer experience across 7 major African markets.

This was one of the most significant findings of the final results of the Cloud in Africa 2023 study released this month by World Wide Worx, with support from F5, Red Hat, Dell Technologies, Intel and VMware. The study, based on interviews with 400 information technology decision makers in medium and large organisations across Africa, found that 63% of respondents across the continent had experienced an extremely positive impact on customer experience as a result of cloud computing. In South Africa and Kenya, that number jumped to 71%.

The two countries also shared a high impact on business growth: 51% of South African companies and 46% of those in Kenya reported strong business growth following migration to the cloud.

However, a gulf opened between the two countries when it came to the impact of cloud on innovation. In South Africa, 65% of respondents reported a high impact on innovation, while the proportion dropped to 36% in Kenya.

“Companies often move to the cloud seeking quick wins in the form of improved business efficiency or enhanced customer experience,” says Dion Harvey, regional general manager of Red Hat Sub Saharan Africa. “However, what we tend to see at Red Hat is that true value in the form of real innovation and impact on strategic goals is only realised once they have matured their thinking and approach to cloud.”

Asked what they saw as the biggest benefits of cloud computing in general, companies identified what World Wide Worx CEO Arthur Goldstuck, principal analyst on the research project, calls the cloud’s “golden quartet”: improved security, better customer experience, business efficiency and scaleability.

However, the benefits were not equally distributed. Fewer than half of South African companies, 47%, reported security as a major benefit, compared to an average of 59%. The figure leaped to 78% in Ghana and 63% in Kenya. On the other hand, South Africa led the way in seeing scalability as a benefit, at 47%, compared to an average of 41%. Nigerian companies reflected the lowest response in this regard, at only 29%.

Alain Tshal, district manager of F5 for Sub-Saharan Africa, says that these results underline the extent to which the cloud is not a one-size-fits-all proposition in Africa.

“Every country is at a different level of maturity, and that has a major impact on both immediate benefits of migration and long-term benefits of use,” he says. “South Africa has had the most extensive investment in hyperscale data centres over the past five years of any country in Africa, so it is no surprise to see that it has very different characteristics to most other markets.”

At the same time, where companies have accelerated their investment  in cloud computing, the impact is immediately apparent, says Goldstuck.

“The latest findings show that Kenya had the strongest growth in cloud computing in 2022, with a huge 84% of respondents reporting increased spend, compared to an average of 62%,” he says. “South Africa saw 55% of companies increasing their spend. That is partly a consequence of spending already having been high in previous years, compared to countries like Kenya.”

Companies from Malawi, Zambia and Botswana all reported a higher level of increased spend, while Nigeria and Ghana came in just below South Africa. Expectations for 2023 flip around, however. While an overall average of 68% of companies expect to increase spending on cloud services this year, that jumps above 80% for Botswana and above 70% for South African and Nigeria. In contrast, Kenya drops to the bottom of the list this year, with 51% of companies reporting they will increase their spend.

For further information, contact Arthur Goldstuck on arthur@worldwideworx.com or phone +27 83 3264345.

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