cloud computing in africa emerging trends & perspectives

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Cloud Experience in Africa:

Emerging Trends & Perspectives Presentation to UNCTAD seminar on Cloud Computing & E-Government, Addis Ababa, December, 2013

Fola Odufuwa, Research ICT Africa

With Alison Gilwald & Mpho Moyo, Research ICT Africa, Cape Town, South Africa.

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Introduction

Risks

Africa ICT Landscape – brief overview

Bottlenecks Use this area to provide an optional section subtitle or explanation

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State of the cloud in Africa 2

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Introduction

This presentation is based on a rapid assessment of the state of Cloud Computing in

selected African countries.

The Cloud report was commissioned by UNCTAD 2Q2013, and was developed by

Research ICT Africa (“RIA”) in conjunction with its nodal partners as follows:

Lishan Adam (Ethiopia)

Godfred Frempong (Ghana)

Fola Odufuwa (Nigeria)

Muriuki Mureithi (Kenya)

Prof. Farouk Kamoun & Prof. Jamil Chaabouni (Tunisia)

The slides have been supported by a previous RIA study on Cloud Computing in South

Africa (Alison Gilwald & Mpho Moyo 2012), while additional analysis has been provided

by the core team of analysts of Research ICT Africa.

The speaker acknowledges the work done by each of the nodal partners in the study

countries and the support of the central team based in Cape Town.

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State of the Cloud in Africa

Risks

Africa ICT Landscape – brief overview


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1 Introduction 1

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Locating cloud computing in the ICT ecosystem

‣ Users including consumers and

citizens have been placed at the

centre of the ecosystem and factors

such as price and quality of service

are a measure of access and

affordability of services provided

‣ Cloud computing is located within the

broader ICT ecosystem as cloud

services are delivered via an internet

connection.

‣ Reliability of cloud computing is

critically dependent upon the

availability of underlying (broadband)

infrastructure.

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Integrated perspective of markets, networks, services, services, applications and content and determining governance, legal and regulatory frameworks

Distinguishing cloud services & cloud-

based services

‣ ITU (2012) defines cloud services that are provided and utilised ‘on

demand at any time, through any access network, using any

connected devices [that use] cloud computing technologies’ • Cloud services utilise software and applications that are held in the cloud an not on the

users’ own devices (REF). These are used for internal administration by cloud user or for

the management of service delivery to end-users. An example is customer relations

management.

‣ On the other hand cloud based services include mass market

applications such as Facebook, YouTube, etc consisting of user

data that are then posted on the cloud.

‣ With the proliferation of mobile phones, the expansion of mobile

broadband networks and the increased access of the internet via

the mobile phone; the delivery of mobile based cloud services is

becoming important in the African context.

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It is important to make a distinction between cloud services and cloud-based services:

Types of cloud providers

‣ Cloud Providers: • Primary source of cloud offerings who “create, configure, run and distribute

services.” (Kushida et al (2012))

• Mainly global IT brands, most of which are present on the continent and

offer some cloud solution in most markets.

• Continental IT giants beginning to play in this space.

‣ Aggregators and System Integrators: • Continental and indigenous vendors and system integrators.

• Provide “boots-on-the-ground” for Cloud Providers by managing the cloud

migration process. They match their knowledge of global cloud computing

technologies with local needs.

• Some offer own solutions.

‣ Cloud Brokers:

• Third party service providers acting as intermediaries between end-users,

OEMs and System Integrators.

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RIA has identified three types of players in the African cloud space.

Emerging trends in Africa

Cloud-computing is in its early growth stages, large corporate

enterprises earlier adopters. Market activity across Africa appears

supply-side driven rather than demand-side driven.

Exception is South Africa where demand is arising from the private sector.

SMEs and the public sector without legacy IT assets can be greatest beneficiaries.

Cloud providers are mostly global US-based players with some local

presence. A number of South African based companies like Dimension Data and Internet

Solutions are competing aggressively by provding services on the continent.

Local IT providers and telcos typically compete with global brands within

the cloud market.

Public sector usage is limited though the governments of Ethiopia,

Ghana, Kenya and Nigeria are beginning to explore public cloud

solutions.

Drivers of cloud computing in Africa

Suppliers, vendors and system integrators

Infrastructure providers particularly mobile operators and

submarine/fibre optic companies

Internet enabled mobile phones, low bandwidth applications,

and social networking

In South Africa, cloud uptake is being driven by private sector

demand.

African telcos and mobile operators are leveraging existing

infrastructure to deliver cloud services in order to diversify

their revenue streams.

Cloud trends in Ethiopia

Ethiopia’s movement towards the cloud is at a very early stage. Efforts to

promote cloud computing is largely government-driven.

The government is working with the Republic of Korea to upgrade data centers using

technology supplied by Samsung.

Recently, there has been significant investment by the government in the telecoms

sector:

National rollout of 16,000 km of fibre has extended broadband access to about 40% of the

population.

Country connected to international cables through neighboring Djibouti and Sudan, and plans

to link to the EASSy cable through Kenya ongoing.

Major obstacle to cloud deployment is limited competition as the government holds a

monopoly on the communications market.

Broadband usage is not widespread. At the end of 2012, there were about 221,000

broadband users, representing 0.25% of the population (Ethio Telecom).

Cloud trends in Ghana

The cloud computing market is at an early stage of evolution in

Ghana. Over 20 providers - many of which are local companies who provide “boots–on-the-

ground” for global cloud providers. Others are pan-African mainly South African

based companies.

Cloud services offered is mainly IaaS and PaaS.

One of Africa’s most liberalised ICT markets with 6 mobile operators, all

of which offer data services based on 3G and CDMA platforms. More than 20 companies actively provide broadband Internet access, led by

Vodafone.

Companies that provide hosting, managed services and data centres

such as Internet Ghana, Ostec, Ecoband Networks, Computer

Information Systems, among others, have the potential to grow their

businesses into the cloud.

Cloud trends in Nigeria

Market is in early growth stages,

driven by global IT companies offering

IaaS, SaaS and PaaS.

Larger corporations, and to some

extent, the public sector implementing

variants of the private cloud .

Mobile operators also launching cloud

offerings targeted at the SME market.

Main local players include Computer

Warehouse, Datagroup IT, and

Business Connexion.

Example of innovation is real-time cloud

solution being implemented by IBM and

Sproxil that enable drug manufacturers

in Nigeria to prevent counterfeiting. Source: Odufuwa (2013)

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Cloud services offerings in Kenya Cloud services are evolving and supply-side driven, though competition is emerging between local and international companies

IaaS CaaS PaaS SaaS

‣ KDN, MTN Business and Safaricom Ltd operate in this space.

‣ KDN has the largest private sector optic fibre network of 7000km, KDN and provides data centre services.

‣ Government has built its own data centres and is in the process of building other centres for public access as PPPs.

‣ Safaricom, in partnership

with an integrator Seven

Seas Technologies has

been offering public

PaaS- servers, storage,

backup and operating

system.

‣ Market entry in 2011 has

changed market

dynamics as potential

users now explore local

clouds as a feasible

alternative to foreign

clouds.

‣ Range of the platform is

however limited to one

operating system

environment.

‣ Key actors targeting the

market include:

‣ Pamoja Cloud Services,

SEACOM’s value added

services business unit,

offering content

aggregation and

associated services.

‣ Xtranet - allows

customers to connect

own software to their

servers.

‣ Kenyan Cloud - provides

mail, data recovery and

storage services.

‣ Sofgen – launched the

Temenos T24 cloud-

based MFI banking

software solution in the

market.

‣ CaaS is yet undeveloped

and emerging in Kenya.

Cloud trends in Tunisia

Growing awareness of the potential of cloud solutions. Growth in the telecommunications sector accelerated by (a) liberalisation at the turn

of millennium (b) the political transition of the 14th of January, 2011 which saw the end

to censorship and has resulted in freedom of expression, (c) amendments to the legal

and regulatory framework in 2013.

These landmarks have opened the market to the deployment of new technological

innovations including cloud computing.

Since 2011, cloud providers have began to focus on the Tunisian market. Microsoft, Oracle and OEMs including HP are increasingly advertising cloud offerings.

Several cloud providers have emerged within Tunisia that provide public

clouds. Local players include Tunisia Telecom, Smart host and Axelaris.

Services of other international operators like Amazon are hardly used in

Tunisia due to the foreign exchange regulations.

Universities beginning to introduce courses and research in this area.

Cloud trends in South Africa

Growing adoption as various sized companies become acutely aware of

the benefits of cloud-computing. Out of 100 large JSE-listed corporations interviewed by World Wide Worx, 46% are

already using cloud computing, mostly the private cloud as companies still have

security concerns about moving on the public cloud.

Even with these obvious advantages some large enterprises are

constrained by governance rules that prevent them from moving some of

their applications into the public cloud as the location of the servers is

unknown as required by law or company policy (Microsoft South Africa,

Interviewed 29 June 2012).

Main players include Microsoft, Google, AWS, Salesforce.com, MTN

Business, Dimension Data, Internet Solutions and Telkom.

Iaas, PaaS, SaaS established in South Africa, CaaS is however

conceptually challenged.

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‣ E-Government in the cloud

• Ethiopia: • Government has adopted a cloud-computing strategy with plans to implement 219 eservices over a

five-year period commencing 2013, with support from the Republic of Korea.

• Cloud applications being rolled out include e-procurement, human resources management, e-

office, e-mail, financial management and information system. Project also includes the construction

of a Wide Area Network to underpin service delivery.

‣ Ghana • Government initiative to promote cloud-computing as part of a broad e-government strategy

involves the extension of the national backbone to all public institutions to enable a single shared

communications and computing infrastructure and facilitate the effective delivery of government

services to all citizens.

• The proposed network is expected to reach 1050 sites, of which half be linked via wireless last mile

access networks.

‣ Nigeria • The public sector has adopted cloud-computing architecture to deliver public services.

• WIth world bank support the Nigerian government has moved public sector payroll systems at over

180 MDAs to the cloud through a SAAS arrangement.

• Galaxy backbone, a state owned managed services provider has an exclusive agreement to

provide connectivity to the public service. The company is in the process of implementing national

cloud infrastructure that will deliver IAAS, SAAS and PAAS solutions.

Relevance of cloud-computing in the

informal sector in Africa

‣ African economies are dominated by the informal sector.

‣ Mobile phones are the most commonly used form of ICT by SMEs, while the

use of fixed lines and internet are negligible.

‣ Opportunity exists for providing business enabling public cloud services over

mobile phones in order to boost development, employment, and facilitate

economic growth.

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Cloud solutions are now being targeted at SMEs who often lack the financial resources to build in-house IT capacity.

Source: RIA ICT Access and Use Survey 2011/12. Distribution across formality classification (unweighted)

Growth of submarine cables over the past 5 years

is transforming the continent

Source: R. Les Cottrell, IEEE Spectrum (2013), accessible at

http://spectrum.ieee.org/telecom/internet/how-bad-is-africas-internet

Improving broadband infrastructure

is enabling cloud adoption

Telecommunications sector is liberalised in most markets and continues to grow inspite

of policy and regulatory bottlenecks.

Ethiopia is the only study country with a closed market and lags other African countries in

arising from a market monopoly situation.

International bandwidth capacity bolstered by recent landings of new submarine

cables, both on the west and east coasts of Africa.

Competition in the broadband market has increased resulting in significant increases in the

availability of bandwidth..

The private sector has also invested in broadband backbone infrastructure, however this is

concentrated in urban areas and centres of economic activity.

Nevertheless territorial national backbone networks in Africa remain

inadequate despite efforts by African governments to promote (or directly build)

national backbone networks.

Policy and regulatory challenges have hampered investment in the expansion of

networks to rural and under-serviced areas

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Bottlenecks

Africa ICT landscape – brief overview


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Introduction 1

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State of the cloud in Africa

(WEF)

Network

e-Readiness

Index

No African country features in the Global

Top 30.

Tunisia leads the continent in terms of

Network Readiness, followed by South

Africa and Egypt.

No African country featured in the High

Income Group. Tunisia and The Gambia are

the highest ranked Low Middle Income and

Low Income economies.

Only Ethiopia (24) is not in the Top 20 in

Africa of the 5 countries reviewed by RIA in

the Africa Cloud Report 2013.

Major barriers to market growth:

Lack of competitive or affordable

backbone infrastructure/ bandwidth

High costs of access to

communications

Effective regulation

No Country Rank Score

Rank within

Income Group

1 Tunisia 35 4.35 LM 1

2 South Africa 61 3.86 UM 11

3 Egypt 74 3.76 UM 9

4 Gambia, The 76 3.70 LO 1

5 Senegal 80 3.61 UM 10

6 Kenya 81 3.60 LO 2

7 Namibia 82 3.58 UM 22

8 Morocco 83 3.57 LM 11

9 Cape Verde 84 3.57 LM 12

10 Botswana 91 3.53 UM 25

11 Ghana 99 3.44 LO 3

12 Zambia 102 3.36 LO 4

13 Nigeria 104 3.32 LM 23

14 Malawi 105 3.31 LO 5

15 Mozambique 106 3.29 LO 6

16 Uganda 107 3.26 LO 7

17 Cote d'Ivoire 113 3.20 LM 26

18 Benin 114 3.20 LO 10

19 Algeria 117 3.17 UM 31

20 Tanzania 118 3.16 LO 13

Source: WEF. UM - Upper middle income; LM- Lower middle income; LO- Low income

Share of those with a mobile that

own one that is capable of

browsing the Internet

15+ Owning a mobile

International bandwidth no longer a problem... electricity and backhaul national networks are....

Country ISP Technology Product

name

Downstream

bandwidth

Usage

cap

Monthly

cost (US$) Notes

India MTNL ADSL TriB 49 2 Mbps 200 MB 0.88 Speed reduces to 512Kbps after exceeding the usage cap + Additional

charge INR1.00 per MB after exceeding usage cap

Sri Lanka SLT ADSL Entrée 2 Mbps 2.5 GB 3.78

Mexico Cablevision Cable Intense 3.0

Mbps 3 Mbps 10.56

Installation charge for the internet only package is taken as the

connection charge

South Africa MWEB ADSL Capped ADSL 384 Kbps 1 GB 17.55 Modem cost from ZAR 369 onwards, excludes voice line rentals.

Kenya TelkomKenya ADSL Surf and Talk 256 Kbps 34.99 The cost of Livebox+Panasonic Handset is taken as the modem cost

Cameroon Ringo Fibre Fibre Ringo 1 Mbps 47.29 XAF95000 is the charge for equipment and installation cost.

Uganda Uganda Telecom ADSL 64 Kbps 90

Where did you use the Internet in the last 12

months

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Bottlenecks

Africa ICT landscape – brief overview


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Introduction 1

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State of the cloud in Africa 2

Lack of competition in fixed telephony has

resulted in relatively high prices for fixed

services across Africa

In most countries, a

legacy of monopoly

fixed-line operators

with significant

control over

essential facilities

including backbone

networks.

High costs of broadband access at the last-

mile limits the growth of the cloud in Africa

Source: RIA. Cost of fixed broadband baskets per month (Sept. 2013) USD PPP

There are also

observed pricing

and interconnection

barriers at the

wholesale level.

Poor quality of service hampers growth of

cloud-computing services

• South Africans are on average only getting 74% of the speeds they sign

up for (Ookla), which is lower than the global average of 85%.

• The Ookla findings are supported by a broadband QoS pilot study

conducted by RIA in South Africa which found that consumers in South

Africa are not getting advertised speeds (Gillwald, Moyo, Stork, 2012).

The study also demonstrated that mobile 3G and LTE services out

perform fixed broadband.

• In Nigeria, frequent optic fibre cuts arising mainly from vandalism and

unplanned road construction with consequential loss of service have

degraded connectivity services.

• In many countries, engineers are battling their way to the remotest parts

of their countries and have to overcome many obstacles in the process.

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Computer ownership is also a bottleneck

to cloud penetration

Most African markets are

unprepared for the legal

challenges of cloud computing

• Concerns around data protection, security and privacy remain a major hurdle to

the adoption of cloud systems in place. Legislation addressing these pertinent

issues is absent in most countries.

• At present there is no framework governing e-commerce within Nigeria. There are no

data protection and privacy laws and there can be no criminal sanctions or civil damages

available to pursue whenever user rights are breached.

• In Ghana, there is no legislation around security, privacy, anonymity and government

surveillance which pertains to cloud computing. the National Telecommunications Policy

only provides a general framework.

• There is no legislation in South Africa that protects information in the cloud – a major

hindrance to investment in the ICT sector.

• Kenya has no data protection legislative framework, though the government has drafted a

bill on data protection which is awaiting parliament deliberations.

• On a positive note, Ethiopia has recently adopted e-transaction and e-commerce laws in

line with international standards.

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Bottleneck summary

• Cost associated with migration

limits adoption of cloud-

computing

• Regulatory uncertainty & lack

of effective competition (at

infrastructure level)

• Institutional

capacity/competencies

• Demand stimulation: e-literacy

• International bandwidth –

selected (landlocked) countries

• National backbone backhaul

network capacity

• Shortages in skilled personnel

• Open systems/interoperability

• Consumer protection

• Security, trust & piracy

• Taxation

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Thank you for your time and attention.

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