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Africa increases cloud spend as customer-centric strategies play out

By , Portals editor
Africa , South Africa , 26 Jan 2023

Backup and customer service & support applications dominate the cloud space.

A high percentage (69%) of business leaders from eight African countries believe spend on cloud will increase this year and multicloud has emerged as a frontrunner in cloud adoption strategies.

These are among the headline findings of the Cloud in Africa 2023 research study, conducted by World Wide Worx in association with Dell Technologies, VMware, Intel, F5 and Red Hat.

Ian Jansen van Rensburg, Director, Solutions Engineering at VMware, said cloud applications are accelerating business and form part of a new approach to the cloud the company believes is critical. “Modern business will be built on modern applications. People who are busy with their digital transformation journey, one of the key areas that they are starting at is not just the technology, but also the apps, modernising the apps .The cloud native apps will run in a cloud environment and that will enable new customer digital experiences across the distributed workforce itself… so we need the cloud to actually cater for this distributed workforce itself.”

Van Rensburg added that cloud computing has evolved and is not as simple “as throwing everything into the cloud” and that 75% of enterprises use two or more clouds.

“They sometimes end up with two clouds, three clouds, four clouds and their private cloud that they have to manage and take care of, and that basically leads to distributed cloud stacks. Obviously each cloud has a development and management environment, the skills that you need to have for that cloud – whether it’s a private or public – needs to be hired, and enabled and trained within the company itself. So you end up with this siloed development and operations environment where you’ve got various clouds… I personally think the mega cloud provider of choice will probably be linked to the app people want to run in the cloud itself.”

He said that disjointed networks, security and access to these clouds add to the complexity. “A new approach to cloud is needed … to deliver consistently across any cloud.”

Multicloud growth

The research shows that while globally over 70% of organisations have adopted a multicloud model.

Arthur Goldstuck, CEO of World Wide Worx, said Africa is way behind international counterparts in terms of this facet of cloud management. “In Africa, we find that only 6% of medium and large enterprises … a smattering of those or rather 60% are using only one cloud provider, which means that just under 40% are multicloud users. That s way behind the global average, which tells us that we are still in an immature cloud adoption environment, it is still evolving.”

Goldstuck predicts that as the market begins to utilise cloud for backup and other specific applications, the emphasis will shift to more complex strategic implementation of the cloud as opposed to digital transformation as the starting point, meaning they will begin to adopt multicloud strategies.

As these strategies are rolled out, companies will engage with potential service provider partners.

Goldstuck said in terms of the criteria used to select partners, research shows that 52,6% of respondents emphasised quality of service as the top criteria, followed closely by service portfolio –essentially what one can do with the cloud.

Efficiency and security

Globally application services are predominantly in the cloud, with a small proportion having on-premise and a smaller proportion collocating their app services.

“In terms of actual on-premise use … it comes to around 18% of companies relying on on-premise. What we are seeing globally is, along with a multicloud strategy, is also a strategy of combining multicloud with on-prem, both for purposes of efficiency and for security, and the like. So there was a rush onto the cloud and then a rush, not off the cloud, but in being on-and off the cloud globally. Across Africa we are still at the early stage – the immature stage – of moving onto the cloud and thinking you can now abandon on-prem.”

While cloud strategies are being formulated and enforced, companies are still faced with challenges to cloud adoption.

Goldstuck said while most of the respondents said they did not experience any challenges, the percentage (28%) who did, stressed a lack of skills as the most pressing challenge, followed by costs exceeding budgeted forecasts.

“That speaks to the fact that while we are seeing this global layoff – the great layoff you could call it n the tech world, globally, at the same time there is a shortage of very specific skills. That will probably result in a high level of reskilling taking place, but across the African continent, we are not seeing that great layoff because of the fact that there is still a skills shortage across various areas of IT, in particular cybersecurity and cloud computing, AI as well.”

Companies are not accurately assessing what their costs are going to be in areas like cloud and cybersecurity, added Goldstuck.

“That doesn’t just speak to poor planning - which can be a factor, but it really speaks to unexpected demand on the IT department. You can never have too much budget to prepare for the unexpected in IT and in particular in cloud and cybersecurity.”

Cloud benefits

Research also shows that improved security and customer service are among the main benefits linked to cloud adoption, and that is part of the reason behind the expectation of greater investment.

Goldstuck said in terms of cloud’s impact on customer experience. “96% of companies saw a positive impact on customer experience. So ultimately what we are seeing here is that the cloud and the customer go hand-in-hand.”

Doug Woolley, Managing Director, Dell Technologies South Africa said: “What we are seeing is maturity levels picking up… (the) right workload on the right infrastructure or right operating model, be it on-prem, private cloud or hyperscaler. What we’ve seen over the course of the last four or five years, we’ve seen a huge adoption of hyperscaler cloud… we are coming to the fruition where we are seeing cloud as a proper operating model and I am not talking hyperscalers. A lot of people default to hyperscaler as the cloud, but It’s just one of the operating models, and as companies are maturing, they are starting to move to a multicloud environment.”

“Customers that have been on the hyperscaler journey are starting to pick up that they can utilise the cloud operating model to automate their operation, to bring agility to operation, to bring consistency of app development and deployment, and this allows them to really merge their environment from being on-prem to private cloud to hyperscaler cloud, all on one platform, that I term the cloud.”

Woolley added that companies are also starting to give up on their datacentre infrastructure and really considering colocation as one of the models as well. South Africa is leading the cloud discussion and definitely at the cusp of where European and US-based companies are, and I think utilising cloud to accelerate business growth and agility, and utilising it to also make sure you are getting a really automated environment that allows for more flexibility and driving business drivers rather than kind of operate the environment.

In terms of the SADC region, customers setting up more private clouds to mimic that operating model. It’s starting to drive discussions like infrastructures, code, whether or not you are staying on-premise, etc.

“It’s an exciting passage that we are entering in from an ICT perspective… we will see more proliferation of the cloud, as we also bring in the edge. I think South Africa is at the cusp of driving a lot of that edge technology … in the next three years we will see a lot of edge tech brought into the operating model that provides customers with a very pervasive computing environment,” said Woolley.

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