African companies to increase spend on cloud services
MORE than two-thirds of companies using cloud computing across most African markets plan to increase their spending on cloud services this year, according to the findings of the Cloud in Africa 2023 study recently released by World Wide Worx in collaboration with support from Dell Technologies, F5, Intel, Red Hat and VMware.
The study, based on interviews with 400 information technology decision-makers in medium and large organisations across the continent, found that 69% of the respondents expected to see an increase in cloud spend while only 7% expected the opposite.
Last year, 61% of companies increased their spend on cloud services, while only 3% decreased their spend.
World Wide Worx CEO Arthur Goldstuck said in a media release that they thought that cloud spending might be toned down in the wake of the massive adoption that took place in 2020 and 2021. “Instead, the opposite was the case,” he said.
Dell Technologies SA managing director Doug Woolley said the study revealed the extent to which cloud computing had become part of the DNA of business. “Any company dealing with a large customer base or an ecosystem of suppliers and clients must embrace the cloud if they expect to operate both efficiently and cost effectively.
“The key to benefiting from a cloud deployment is to choose a partner with solutions that can simplify deployment and management of hybrid cloud infrastructure. It is a multicloud world and IT leaders want best-ofbreed capabilities to achieve differentiated outcomes. They love the ease and agility of the cloud experience and expect it everywhere,” Woolley said.
The single biggest benefit reported by respondents in the survey was in an area most often cited as a barrier by those who had not yet adopted the cloud option, which was security. Yet, more than half of respondents at 56% cited improved security as the benefit of the cloud.
Ian Jansen van Rensburg, director of Solutions Engineering and lead technologist at VMware Sub-Saharan Africa, said the continent was overdue for a shift in understanding that cloud deployments could be secure if properly implemented.
“According to the statistics in this research, the cloud provides peace of mind as well,” Van Rensburg said.
As the study demonstrated, both customer and business service efficiency were substantially enhanced when the cloud was used, he said.
These benefits were cited, respectively, by 44% (customer service) and 41% (business efficiency) of respondents, marginally ahead of scalability at 40%. The latter was one of the key value propositions of the data centres that were proliferating across the continent, promising to allow businesses to scale up their capacity on demand, as seasonal peaks disrupted conventional computing infrastructure.
Goldstuck said the most important finding for enterprises was that 90% of the respondents reported business growth, with 43% seeing strong growth.
“Business growth was said to be a consequence of two further areas of impact of migration to the cloud: innovation and improved customer service,” he said.
Just under half of respondents, 48%, reported a high impact on innovation with a further 23% reporting some impact, which was more than two thirds seeing innovation increasing in the organisation. Fewer than 1% said the cloud had a negative impact on innovation.
Customer experience was said to be the biggest winner at 64%, reporting extremely positive impact and a further 32% somewhat positive impact. Less than half a percent reported a negative impact on customer experience resulting from cloud migration.
While cloud adoption was now said to be pervasive, cloud strategy continued to evolve across the continent, especially as data centres were now becoming more pervasive, connectivity coverage was improving and more companies were beginning to make contingency plans for power outages.
“Especially given the importance of customer experience, the ability to run applications on-premise when facing connectivity issues, as occurs regularly in power outages will be an essential option,” Goldstuck said.
Furthermore, according to the Rise of the African Cloud Report by boutique advisory and research firm Xalam Analytics, the African continent accounts for only 1% of the global public cloud market and with a cloud penetration rate of only 15%, the market had doubled in the past three years to 2019, and was expected to grow at a compound annual growth rate of 17 to 20%.