Cloud investment swings to Kenya

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 15 Feb 2023

While research shows cloud adoption is “unanimous” across a number of African companies, Kenyan organisations topped the list of cloud services big spenders last year.

This was revealed by World Wide Worx MD Arthur Goldstuck, presenting the final insights from the “Cloud in Africa 2023” study at a Red Hat-hosted event yesterday.

The study, released every two years, was conducted by World Wide Worx, in partnership with Dell Technologies, VMware, Intel, F5 and Red Hat, looking at how African countries differ in their adoption, use and benefits of cloud computing.

The study surveyed a number of corporates and medium-sized enterprises across seven African countries.

In 2022, 84% of organisations in Kenya increased their spending on cloud services, according to the study.

Among the notable reasons for this increase is the influx of data centres and an increase in cloud platforms available to the country over the last two years, stated Goldstuck.

“South Africa comes significantly below Kenya and below the average with 55%. Part of the reason for that is SA has had a fairly mature cloud environment for some years now.

“So, there doesn’t appear to be a massive driver – certainly last year – to invest further, and in particular because this country was one of the biggest investors in additional cloud services during the pandemic. This is a bit of response to the intensive spending that occurred during the pandemic.”

When looking at the year ahead, East African organisations will be overtaken by those in Botswana. They will be followed by Nigeria, South Africa, Zambia, Malawi and Ghana.

Goldstuck noted that when companies were asked if they will increase their spending on cloud services in 2023, Kenya dropped to the bottom of expected spend. “The reason for that is last year saw such a massive rush into the cloud, they are now slowing down.

“They’re not slowing down because they want to spend less on the cloud, but because the spending last year was so high and so accelerated, it had to slow down.”

“We didn’t expect them to be the slowest in this coming year, but it’s certainly a responsible reaction to being the fastest in the past year. You see South Africa jumping up to 73%...a little bit above the average.

“There’s almost a pendulum in cloud investment; when you slow down in one year, you tend to speed up the next year, and so forth – as companies manage their use of the cloud and its strategic intentions.”

A total of 61% of the survey respondents revealed they increased cloud spending in 2022, the World Wide Worx MD stated.

This, he remarked, came as a surprise. “We thought all the increase in spending would’ve happened during the pandemic in 2020 and 2021, but it accelerated last year.”

While one may have expected spend to slow down, based on the 61%, Goldstuck stated that a further 69% of respondents expect to increase their spending this year.

“That is huge. It tells you that the reasons for embracing the cloud and the benefits of using the cloud are so abundantly clear that companies cannot slow down in their investment in cloud computing.

“Eventually, it will meet some kind of bell curve-type picture where the cloud is fully mature across the continent and people can start stabilising their spending.”

World Wide Worx MD Arthur Goldstuck.
World Wide Worx MD Arthur Goldstuck.

Surprisingly, Nigeria is the nation with organisations that are least likely to exceed budgeted cloud costs, commented Goldstuck.

The West African nation, which may have the image of being a ‘Wild West’ kind of country where the rules don’t apply, was the one most likely to stick to budgets when it comes to cloud computing, he explained.

“It’s counter-intuitive but it’s also good news, in terms of dismissing the stereotypes about a specific country.”

In terms of organisations that exceeded budgeted cloud costs, Ghana was at the top, he revealed. “Cost was the least important criteria of all the countries, so it meant they’re just spending to get onto the cloud.

“They don’t actually budget for it, and therefore, the little budget they have is quickly exceeded.”

Ghana was followed Malawi, Kenya, Botswana, South Africa and Zambia.