Citrix surprised by SA's cloud appetite
Citrix is pleasantly surprised by the local appetite for cloud services in South Africa and sees it as a strategic opportunity for its business, which has been focusing more on cloud computing technologies in recent years.
"We are seeing more and more customers actually embracing the cloud. You know, at the beginning of the year, we didn't want to set a cloud target because we thought the market was not ready for cloud, but we have actually been surprised at a number of big customers who have said 'we want to go'," Brendan McAravey, country manager at Citrix SA, told ITWeb.
Citrix global CTO Christian Reilly was recently in SA and told ITWeb in an interview he was also surprised by the demand for cloud in the country.
"For people to have a strong cloud strategy here, where there is no cloud, was an eye-opener. I was expecting it to be that people would say, 'maybe ask us again in three to five years when cloud is here', but it was more people saying they have got to get to cloud for reasons of better operation, for reasons of more flexibility, and that was a big surprise. Because to not have something readily here that is reachable for performance reasons, and yet to still hear these cloud strategies over and over again, I thought was pretty eye-opening," Reilly said.
He was referring to the fact that none of the major cloud players have data centre capabilities on the African continent yet, although at least three are planning local data centres and "cloud regions" in SA in the next two years. Currently, many African companies rely on cloud services delivered from outside the continent; however, having local data centres could vastly improve latency to end-users across sub-Saharan Africa.
The most imminent launch is Microsoft Azure's data centres in SA, one in Cape Town and the other in Johannesburg, which are due to go live by the end of the year. Citrix and the software giant have a long-standing relationship. Microsoft Azure cloud runs various Citrix software components, including virtual desktop software for hosting Windows 10 systems.
Huawei announced in November it would open its first public cloud data centre in Africa, in Johannesburg, next year, with Huawei Cloud services officially available in SA by the beginning of 2019. Amazon Web Services (AWS) will also bring its data centres to SA, launching its AWS Africa (Cape Town) infrastructure region in the first half of 2020.
Reilly said when meeting with local customers, he found the "vision is there, the appetite is there, absolutely" when it comes to cloud.
"I have lots of customer conversations across the globe, and South Africa has been no different in terms of the aspiration for customers to move to the cloud, to drive digital transformation, to be more engaged with their business. That's the same and that is great for South Africa, because it's no different than the rest of the world. The companies are heading in the same direction using technology as an enabler.
"I guess my observation is that where it is not the same as the rest of the world, the big clouds are not here yet locally, so, of course, the expectation that Microsoft will land Azure capability and then ultimately add to that with Office 365 capability, that will be a force multiplier for the region," he said.
"Cloud is a big push for us in the local market, and obviously once Azure lands, and AWS, it will make a big difference," McAravey added. "We are talking to lots of customers who typically have got duel strategies for cloud; they want a hybrid cloud, they are scared of vendor lock-in, which is kind of smart. You have to be pretty brave to lock yourself into one vendor."
Traditionally, Citrix has been known as a provider of servers, applications and desktop virtualisation, networking, software as a service, and in recent years, it is pushing much harder into the cloud computing space.
"Citrix has been around almost 30 years. It is a company that started life in delivering software for on-premises deployments, as most customers have and will continue to have those kinds of requirements. Three years ago, we embarked on a mission and a vision for Citrix Cloud, which was for a few different reasons," Reilly explained.
"The bigger Citrix cloud strategy is kind of twofold, one because if we take a look at our traditional on-premises virtual client computing market, it's pretty big globally, not just for Citrix, but also for the other people competing and providing services and products in that same space. The growth rate in that market is a single-digit compound annual growth rate between say now and 2022. If you take the cloud equivalent of that, which would be things like desktop as a service, for example, that is growing at about 30% according to some analysts.
"The market is much smaller for those cloud services, because they are, by definition, much younger in terms of the offerings, but the potential growth that we see there indicates that our strategy is probably the right one in terms of making sure we continue to serve the on-premises customers, but building the cloud services so that they can move to those at a time that suits them," Reilly said.
McAravey said when talking to local customers, you now hear leadership questioning operational staff about why they would want to do something on-premises and not in the cloud.
"They don't want to buy more tin, they are asking why you can't put it in the cloud or you can't go for a cloud solution, and we are seeing it more and more with South African customers. Definitely the stated intention now is cloud first."
Global view on local market
This was the first time any Citrix CTO has visited SA, and Reilly said the visit gave him another view on the customer demographic.
"It validates some of the things that we do, and we have to validate that globally, we can't just validate them in New York or London," he said.
"It's amazing how profoundly the same all customer challenges are. It's incredible, they may be in different industries and have different things that they make or provide, but you can pull several threads that are identical. I think when investing time down here or wherever else in the emerging markets space, there are tons of opportunities for us and for us to materially make a difference to those customer journeys.
"[The visit] has validated some things that I felt would be the case, but it's also given me some new ones. It's now put South Africa on a par with other places in the world that I go to and talk to and it's kind of exciting."
McAravey also said the group's expansion in Africa is going well: "You will start seeing in 2019 we will start to expand out more aggressively into Africa."