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Living in the cloud requires bigger bandwidth and an army of data centres. As mobile data traffic in Africa expands at a remarkable rate the cable companies themselves are caching in on the need for content.
Cloud computing, a catch-all term used for software and other internet technology (IT) and mobile services hosted, operated and maintained via the world wide web, is being driven forward in Africa by cheap bandwidth made available by new fibre optic cables lining the ocean bed. Cloud services can range from the very simple – web-based email systems such as Hotmail, Gmail and Yahoo – to the highly complex, where governments and businesses store huge databases and run complex programs via the internet.
Africa’s cloud constellations will be driven by mobile phones. Between 2010 and 2015, Cisco predicts that there will be 129% growth in mobile data traffic in the Middle East and Africa, reaching an on-net population of 138 million people by 2015. But the small storage capacities on mobile handsets means that content, particularly African content, will have to be stored and accessed virtually.
Content developers will need to use the cloud to host their applications. Some already are, such as Spinlet, a new mobile platform that aims to become something like an ‘African iTunes’, allowing users to store their music in the cloud and access it via their mobile phones.
Such services designed for African mobile phone users are catching the eye of telecoms operators. “You have an independent application you can pay with a voucher or airtime, mobile money or an electronic purse and you can store it on the cloud,” says Banky Ojutalayo, a former senior manager of value-added services for Glo Mobile in Ghana. Operators can make money from these content services as users spend their airtime on downloads. But the next battle will be how much of their data revenues they are willing to share with the young developers who create the content. A survey published in mid-April by telecom analysts Informer predicted the value-added services market in Africa is growing at around 22% and could generate revenues of $11.5bn by 2014.
Multinationals used to operating in Africa have long been paying the high prices for satellite bandwidth linking them up to back-office operations in Europe and North America. But as the bandwidth revolution allows more African businesses to take advantage of services based and managed on the cloud, now demand is spiraling for more data centres on African soil capable of storing the data.
African companies like Kenya Data Networks and South Africa’s Teraco, which operates co-location data centres in Cape Town, Durban and Johannesburg, are allowing new business models to emerge for the lower end of the market. Using one of Teraco’s data centres, Cape Town-based internet service provider WebNow has launched a virtual server product for small businesses priced at R189 ($28) per month.
A comprehensive report by African telecom analysts Balancing Act published in January put the number of data centres on the continent at 112, including 15 in South Africa, 11 each in Egypt, Ghana and Nigeria and 10 each in Kenya and Tunisia. The report points to new regulations in some African countries that make it mandatory for personal data on citizens to be hosted within the country rather than abroad.
In order to stop users from being turned away by slow-loading web pages that eat into their data bundles, telecoms operators will also have to make their own infrastructure investments. “Large African operators will soon be building out their cloud services portfolio and delivery capabilities to position themselves on the leading edge of the enterprise cloud market segment,” the report predicts.
Even the providers of the new internet bandwidth are getting involved. In April, undersea cable company Seacom launched its content-caching network, a content distribution network with two ‘nodes’, in Johannesburg and Mombasa, that will store popularly-used content so it take less time to load.
“If you’re going to go to a YouTube video, you’ll be able to access that in a couple of milliseconds as opposed to 200 milliseconds going up to Europe and then coming back down. The user experience is fundamentally different,” says Suveer Ramdhani, head of product strategy at Seacom. He said that companies that used to run numerous servers in different locations were now seeing the financial sense of buying a managed service from a private data centre. “That is the precursor to sophisticated cloud services,” he explains.
But it may be a while before the bigger data players descend on Africa. They need water for cooling the humming servers and stable power sources, something that is not often guaranteed on the continent. According to Hennie Loubser, general manager for West, East and Central Africa at Microsoft, the company has no data centres in Africa and no plans to build any. He said there was a “certain amount of maturing” that needed to happen in the African business community before it embraces web-based services.
In the meantime, Microsoft is providing its expertise and software to hosting companies, such as MTN, that sell services to businesses. “Today in Ghana, Cameroon and South Africa, as part of their data subscription business [MTN] can now sell to that business not only that subscription, but, for an additional fee, provide that business with an email service and a collaboration service all based on Microsoft technology,” says Loubser. At long last, Microsoft is also preparing to launch a subscription service to its Azure platform in Africa, which developers can use to create and host cloud-based businesses.
US research firm Gartner predicts the global market for cloud services could reach some $149bn by 2014. Last year, two global IT service firms – US-based Citrix Systems and France Telecom’s Orange Business Services – appointed regional directors focused on cloud computing in Africa and the Middle East. Providers will need to overcome concerns about the security of their data, but if they do, the cloud could be another leapfrogging opportunity for the continent.
This article was first published in the May 2011 edition of The Africa Report.