There is risk of Africa's cloud market being "colonised" by international public cloud companies if the cloud solution providers on the continent do not form partnerships to develop better solutions.
This is according to Gert Schoonbee, MD of T-Systems, speaking at the T-Systems In Touch Technology 2016 event in Midrand last week.
Global players active in Africa include Microsoft, IBM, Google, Oracle, SAP and Amazon.
"They take over in different ways - sometimes from a distance (Amazon), sometimes through local partnerships or resellers (Microsoft), sometimes through hybrid models (SAP)," says Jon Tullett, IDC research manager for IT services Africa.
Tullett adds global public cloud providers will tend to dominate because they have greater economies of scale, mature technology stacks, strong brand awareness and often better solutions.
As a result, it is becoming more and more viable from a security, price and functionality point of view for African businesses to use global public cloud platforms, says Schoonbee.
Tullett, however, argues the term 'colonisation' should not be applied to cloud business because it's loaded with sensitive political connotations.
"Cloud is a global business, and Microsoft is no more colonising Africa with Azure than it did with Windows ? it's just expanding into this territory."
Globally, cloud is in a price war, with technology getting cheaper and better very rapidly, notes Tullett. "It's very good news for local customers, but a challenging time for local providers trying to remain viable."
"The whole digital transformation journey is accelerating exponentially and if local companies do not act to counter this cloud colonisation trend, within the next two to three years, it will become very difficult to reverse it," says Schoonbee.
He believes as it stands now, SA might not be able to stop global cloud companies from "sucking" out money from the country.
Collaboration is key
According to Jonathan M Ledgard, director, Afrotech, EPFL, in a World Economic Forum blog, Amazon, Google and Microsoft will be among the top 10 companies in the world this year in cloud computing research spending.
Also, the cloud will be the leading tech trend in Africa this year - with Oracle and Huawei saying they are experiencing "hyper-growth" in Africa as businesses move their operations to the cloud, he adds.
Moreover, IDC projects high growth for many cloud workloads, and while global players are likely to dominate, there are still many opportunities for local providers, says Tullett.
Schoonbee says local public cloud providers need to provide public cloud solutions with competitive functionalities and price.
He urges cloud providers in Africa to form partnerships and to collaborate; to start conversations and engage with one another to learn how to develop cloud solutions to become more competitive.
"Let's be mindful and avoid putting up our borders and say these companies want to digitally colonise us and steal our content - that is not going to help us," he adds.
Tullet says to survive, some local cloud players will form strategic partnerships - either with each other or with some of the global players. Some will find ways to add local value, which gives them an edge in certain engagements, he adds.
"This will be a continuous effort though - the nature of large global competitors is that they tend to catch up with niche advantages with relative ease. This is becoming a much harder business to be in, but that's good for customers."
The African continent can't stop the digital transformation era; it can only steer it to its benefit, says Schoonbee. "Currently, it feels like it's happening to us, and that's not good, we can't let it happen to us and because it's happening so quickly, we can lose out."
African cloud solution providers need to create partnerships with the global providers, engage with them and come up with a win-win solution, says Schoonbee.
The key for Africa, then, will be to adopt an innovative mindset and focus on skills development to ensure digital transformation opportunities can be filled - and led - by Africans, says Ledgard.
It will also mean that now, more than ever before, Africa must become a creator, and not just a consumer, of technology, he adds.
Share