According to a recent study by IDC on cloud adoption, 63 percent of companies in South Africa are either already investing or planning to adopt some form of cloud technology, though the pace is still slow in the rest of the continent.
The African economy has suffered from poor infrastructure, political instability and the failure to attract international companies, but the operation of several submarine cables over the last two years has restored some confidence in the regions telecommunications infrastructure.
Cloud technology allows companies to use infrastructure, platform, software and security services provided by third parties. But a challenge for service providers lies in instilling confidence that they are able to continue operations and keep data safe in case of natural or man made disasters.
In recognition that companies are hiring third party infrastructure and security services, regulatory requirements for disaster recovery have been put in place in various countries, especially for sensitive sectors like financial services. Previously, a bank would be expected to provide protection for sensitive information and physical security, but when information and services are in the cloud, the demand for disaster recovery measures has become more important.
In Kenya, the central bank has regulations on disaster recovery. Smaller financial institutions and small and medium size businesses that offer banking facilities, however, do not have elaborate disaster recovery measures because they are governed by a different law to that of banks.
"Most companies will now have an easier way to put services in place through secure cloud computing, which will relinquish the burden of financial pressure on capital expenditure," said Mike Macharia, CEO of Seven Seas Technology in Nairobi.
"In addition to this companies will require ... elaborate, detailed business continuity plans that will enable them to recover their people and processes in the case of major disaster," added Macharia, whose company is involved in setting up data centers for Safaricom.
Given its superior economic status, South Africa has the majority of data centers while Kenya and Nigeria have emerged as regional hubs and data center locations to serve Eastern and Western Africa markets respectively.
"The emergence of regional hubs is bridging a lot of the historical challenges of disaster recovery and business continuity, but as Africa matures, the need for nearshore / onshore data centers is increasingly becoming important; especially for those organizations in the financial services industry," said Pieter Kok, a research manager for IDC in South Africa.
Internet Solutions is one of the major companies offering cloud services through its MPLS (Multiprotocol Label Switching) platform, with data centers in South Africa, Kenya, Ghana, Nigeria and Mozambique.
"All cloud based services are deployed in a cluster format; multiple instances are replicated throughout the IS cloud across the continent and data is also separately backed up," said Loren Bosch, sales director for Internet Solutions in Kenya. "The global IS network is built on an MPLS platform and have invested in multiple international capacity options within the group, to make sure our network intelligent enough to switch to alternate services when unexpected disasters occur."
Big corporations with big budgets have been able to benefit from large-scale cloud services involving computing infrastructure and software. Smaller companies' use of cloud services is more limited, however, and often focuses on marketing via e-mail and mobile devices. In Africa, the growth of the "mobile cloud" has been spurred by efforts to expand business into areas with poor infrastructure, which typically provide minimal economic returns on investment.
Cloud-services and infrastructure providers who take the lead in offering mobile services are therefore likely to be early winners, according to market observers.
"The quality of provisioning through self service portals and the simplicity of use will determine the default leaders in the market for cloud services -- mobility will play a major role as consumers target ease of access," said Seven Seas' Macharia.
Service providers that get in the market early and expand aggressively are likely to become defaults leaders, in much the same way as
Safaricom became dominant in the mobile money arena by launching M-Pesa early on, he said.
"The ability to scale .... will determine the rate of growth both in terms of revenue and actual size for entrants into the public cloud market and will likely result into a customer lock-in model similar to the trends witnessed in the evolution of M-pesa services," Macharia said.