The rollout and adoption of cloud services in South Africa is inhibited by extraneous circumstances. And there is currently little optimism that these constraints will soon be overcome, says Mervyn Mooi, director at Knowledge Integration Dynamics (KID).
In the world of data, information, knowledge and intellectual property, few companies can fully capitalise on the opportunities that cloud presents – flexibility, speed to market, rapid development of new products and services, capex and opex cuts, access to the latest technologies, reduced risk by supporting dynamic workloads – and several more besides.
It depends on whether or not companies are capable of implementing cloud services, or if it is affordable, necessary or valuable to adopt cloud services in the first place.
The demand for cloud-based services is driven by the need to:
* Closely interact with customers immediately, in any place, at any time;
* Improve operational efficiencies and service delivery;
* Reduce costs to customers; and
* Offer customised services and products and more.
A common constraint to achieving these efficiencies is the requirement for bandwidth, at low cost, of which there is a deficit in South Africa.
In the home entertainment market Steam is a category leader in computer games distribution and support. Through it consumers can buy computer games and ensure the games are kept up to date with all the latest patches and any new content that is released.
But as the average size of games increases, now coming in at anywhere from 5Gb to 20Gb, plus gigabytes worth of patches, few people on mobile connections can afford it.
On-demand videos are touted as the next big thing in consumer services: the ability to download and watch, in realtime, videos from anywhere on the Web and specifically from service providers that make home viewing available from full length movies to entire series and episodic shows.
That type of service, which could be monetised, is unavailable in most African countries due to lack of infrastructure and service models.
In fact, in South Africa, only 2,2 million people regularly transact across the Web but they generate R3,6 billion in revenues as of 2012, according to Arthur Goldstuck of World Wide Worx. The revenues are expected to rise this year, by 25%, but not the number of people transacting.
Smart devices are expected to increase consumer use of cloud services and products – and increase associated spend too. But there are inhibitors again. Mobile devices require consistent bandwidth, which is more costly but more widely available than landline bandwidth.
The devices themselves are expensive which limits their use by the majority of the population. For example, MTN values a 32Gb Apple iPhone 5 at a shade over R10 000. That price tag puts it well beyond the reach of the ordinary citizen who still has to buy data bundles to put it to good use.
Businesses also experience bandwidth problems. Broadband is not ubiquitous and where it is available it is still expensive relative to many other countries – which makes us less competitive. The business case to monetise cloud services is a difficult one to make in South Africa for both offering services and using them for internal purposes.
With enough access to proper broadband at reasonable prices South African businesses would gain exponentially increased speeds of interactions with partners and customers. Businesses would be able to increase their resource and processing capacities from anywhere in the world.
They would gain access to numerous disparate data sources such as unstructured content, applications, social inputs and more. They could empower their people by placing the full spectrum of resources of the globe at their fingertips. But they cannot do so with ease when considering the above-mentioned constraints.
South African businesses are being held to ransom by the bandwidth deficit and by the monopolised cost of what little bandwidth is available. In many cases they already have the virtualised environments set to capitalise on the cloud opportunity, they have the processes and the business infrastructure, sans bandwidth, but they cannot access the markets and the markets cannot access them.
Added to this situation are the labour strikes, which are costing the South African economy billions of rands. Estimates place the most recent strike season’s costs at 14-million working days, about R4-billion, and a reduction in the GDP from 3% to 2,8%. How will we replace that income if not in part by enabling cloud services that drive business growth, revenues, profits and competition?
