African small and medium-sized enterprises (SMEs) are missing the opportunities brought by cloud computing - dramatically reducing costs, improving productivity and accessing global markets by adopting the latest digital technologies.
So says Albie Bester, GM of Pamoja, a Seacom-owned company, who says cloud adoption in many parts of Africa lags global trends largely because broadband connectivity in many countries is still expensive, of poor quality, and not yet widespread.
According to Bester, cloud adoption can offer African SMEs the possibility of accessing world-class IT infrastructure and applications.
However, he believes that for these benefits to be realised, carriers and governments across the continent must make a concerted effort to drive higher broadband penetration so SMEs can enjoy quality and cost-effectiveness of cloud services.
Cloud uptake
A recent SME Survey 2015 in SA done by Standard Bank and local research firm World Wide Worx discovered that the uptake of cloud services in the SME sector has been growing steadily but 2015 sees businesses finally beginning to wake up to the benefits offered by services like online storage and backups.
The number of SMEs using cloud services in 2015 jumped by 10% - up to 39% - from 2014, according to Arthur Goldstuck, MD of World Wide Worx.
Ethel Nyembe, head of small enterprise at Standard Bank, says cloud-based products can provide small and medium business owners with efficient, simple and cost-effective business management solutions, thus saving the enterprise time and money, which is vital for prosperity.
"For example, cloud-based HR applications are more economical than tailored in-house systems, as they involve no upfront costs and are adaptable, thus giving the entrepreneur the time needed to focus on innovation," Nyembe points out.
For Bester, with world-class data centres in most large African economies, there are service providers that provide cloud services that compare favourably to the benchmarks set in developed countries.
He believes the biggest barrier to cloud adoption among African SMEs has been the lack of pervasive, cost-effective, high-quality Internet connectivity.
"We believe that African SMEs could drive even more value out of the cloud than SMEs in other parts of the world or large businesses in their own territories. Most of them are starting from a low technology base, so accessing world-class accounting, CRM or line-of-business applications as cloud services could supercharge their productivity, efficiency and reach.
Major advantage
Furthermore, he adds, IT skills are expensive and in short supply in many parts of Africa. "The cloud means that SMEs don't necessarily need to find someone to install, manage and maintain a server room infrastructure.
"And because most cloud services are pay-per-user-per-month or year, SMEs don't need to spend upfront on their IT systems. This is a major advantage given the lack of financing options for SMEs in many parts of Africa."
According to Bester, over the past few years, the telecoms environment has improved by leaps and bounds in countries such as Kenya, SA, Rwanda and Tanzania. He points out service providers have invested in metro POPs, base stations, backhaul infrastructure, and there is plenty of international bandwidth.
However, some countries are still dominated by incumbent monopolies and require regulatory intervention to level the competitive playing field, he notes. For example, governments could be helping to fund rollout of national and last-mile fibre, while regulators could encourage telecoms operators to share resources such as spectrum frequency and cable infrastructure.
Bester says carriers, service providers and governments all have strong incentives to change the picture for the better. "For carriers and service providers, providing cloud services to a rapidly growing SME sector is an exciting new revenue opportunity. For governments, a more connected and productive SME sector could help to drive economic growth and job creation."
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