Africa is one of the fastest-growing regions for cloud computing services as more businesses and startups adopt digital technology. However, the market is still small and faces data localization and cybersecurity challenges.
Cloud computing is the technology that allows users to access data and applications over the internet without having to store them on their own devices or servers. Cloud services can offer scalability, efficiency, and cost savings.
Amazon Web Services (AWS), the world’s largest cloud provider, has a strong presence in Africa, with data centers in South Africa and Nigeria. AWS was created by a team of engineers in Cape Town in 2003 and has become Amazon’s most profitable subsidiary. AWS offers various cloud services, such as elastic computing, storage, databases, analytics, and artificial intelligence.
Microsoft Azure, AWS’s main rival, is expanding its footprint in Africa, with data centers in South Africa and Kenya. Azure provides cloud services similar to AWS but integrates with Microsoft’s other products, such as Office 365 and Windows. Microsoft has partnered with Flutterwave, a leading African fintech startup, to process payments for its global merchants on Azure.
Oracle, another global cloud provider, is leveraging its existing relationships with clients who use its software products, such as database and enterprise resource planning (ERP), to cross-sell its cloud service. Oracle has helped South African retailer Mr Price migrate its digital operations to its cloud platform.
Various sectors, such as banking, insurance, telecoms, media, and e-commerce, drive the demand for cloud services in Africa. According to Xalam Analytics, a digital research consultancy, demand for cloud computing services in Africa grows between 25% and 30% annually. This compares favorably with Europe and North America, where the growth rates are around 11% and 10%, respectively.
However, the cloud market in Africa is still small compared to other regions. Statista, a German research service, predicts that revenue from public cloud services in Africa will reach ~$8.3 billion by the end of 2023. By comparison, public cloud revenue in India reached $6.2 billion last year.
One of the challenges facing African cloud providers is data localization, which refers to the requirement that data be stored within the country where it is generated or collected. Some African countries, such as Nigeria and Kenya, have introduced or proposed data localization laws to protect their data sovereignty and security. This could limit the scope of cloud services offered across borders.
Another challenge is cybersecurity, which is essential to ensure the safety and privacy of data and applications on the cloud. Cyberattacks can disrupt or compromise cloud services, causing financial losses or reputational damage. Cloud providers must invest in robust security measures and comply with relevant regulations to protect their customers.
Despite these challenges, cloud providers are optimistic about the potential of Africa’s cloud market. The GSMA, an association of mobile operators and related companies, says smartphones will account for 88% of total mobile connections in Africa (except for North Africa) by 2030. In the same year, they expect 200 million new unique mobile subscribers to join the growing number of Africans who use mobile phones.
The increasing use of digital platforms for government services, private businesses, and personal life in Africa is creating more opportunities for cloud providers to offer innovative solutions that can meet the diverse needs of customers. Cloud computing is expected to transform Africa’s digital economy and society.
Source: TechCabal
