African businesses benefit from late mover advantage in the cloud
By Matthew Barker, divisional sales manager for Sub-Saharan Africa at F5 Networks
Established information technology markets – like the UK, Europe and even South Africa – often take cloud computing for granted as the ideal platform for innovation and global expansion.
One reason could be that these markets gradually adopted cloud computing as and when their legacy infrastructure and budgets allowed them to. The slow creep of cloud into the organisation meant they could innovate in increments, perhaps starting with collaboration and then offering their services as APIs. Now, it’s just business as usual.
Cloud through new eyes
They say that if you want to rediscover the joy of something, you should watch a child experience it for the first time. Children don’t have preconceived notions about anything – they play and explore and are curious about how things work and how they can be manipulated to their advantage.
In a sense, Nigeria, Kenya and – to a lesser degree – South Africa, are the children experiencing the wonder of cloud computing for the first time. There’s no legacy infrastructure holding them back and, because cloud is more affordable and accessible than when established markets first dabbled in it, they can jump in with both feet and see how big of a splash they can make.
This was one of the key findings of Cloud Africa 2018, a research project we conducted with World Wide Worx across Kenya, Nigeria and South Africa earlier this year, where we asked decision-makers at 300 medium and large organisations about their cloud computing usage, benefits and intentions.
While the full benefits of cloud have not yet arrived in these markets, the fact that they can leapfrog traditional technology means they’re seeing an instant impact from their cloud investments – and Nigeria seems to be making the biggest splash.
Even though Nigeria was late in its cloud uptake, 100% of respondents report seeing a positive impact on innovation and brand perception. This isn’t surprising, considering the two are closely related.
In Nigeria and Kenya, businesses use the cloud to overcome obstacles that get in the way of efficiency. These obstacles are usually caused by infrastructure challenges, which are the enemy of innovation. But, with the cloud, they can break down technology barriers, improve integration and, essentially, pick and choose from a menu of digital services to build entirely new infrastructures with the ability to scale.
So, it’s also not surprising that business efficiency and scalability were ranked as the most important cloud benefits in these markets, with 80% of respondents in Nigeria and 75% in Kenya selecting it as an advantage.
Africa vs the world
It was fascinating to see how vastly different the South African market was in terms of cloud computing benefits, compared to Kenya and Nigeria. In South Africa, which has a more mature IT landscape, organisations tended to focus more on what their competitors were doing than on what they themselves were doing.
While Nigeria and Kenya placed massive importance on innovation in the cloud, South African businesses regarded it more as a platform for global expansion, with the most important benefit being speed of deployment of new products and services, as cited by 68% of respondents. In contrast, only 48% of companies in Kenya and 28% in Nigeria named this as a key benefit.
It seems that, for now at least, organisations in Kenya and Nigeria are focused on getting their infrastructure and customer service right in their home markets before considering global expansion – fewer than one in five Kenyan organisations and one in 10 Nigerian organisations are even considering taking on the world.
One step at a time
Here’s the conundrum from the study: while Nigerian respondents were unanimous in their use of cloud to innovate, the one area were all three countries were level was in using the cloud as a platform for service innovation, which came in exceptionally low, at around 15% across all markets. This was despite all three markets reporting a high impact on the customer experience, ranging from 81% in South Africa to 96% in Nigeria.
The cloud has made it easier than ever to gather information about customers, to understand how they use a product or service and to offer them more relevant products and services. This is what service innovation is all about. Yet, none of the markets surveyed saw this as a major benefit yet.
Unlike in established markets, where customer experience is closely tied to service innovation, in Africa, customer service appears to go hand-in-hand with brand perception. In these markets, customers and organisations are not yet fully benefitting from the likes of the Internet of Things and artificial intelligence, and still find services like mobile integration novel.
With the rapid advancement and uptake of cloud in these markets – which has seen cloud use more than double from less than 50% of organisations using it in 2013, to pervasive use in 2018 – we expect these benefits to look vastly different five years from now. This is especially true as more services become available exclusively through the cloud, with no option to use them on-premises.
If they want to stay relevant and expand outside their borders, African organisations have little choice but to be disrupted. But, with the late mover’s advantage, they won’t be making the same mistakes established markets made in their journeys to the cloud and they’re already reaping massive benefits.