Cloud computing: More firms move to tap cloud services demand


Digital transformation concept. PHOTO | SHUTTERSTOCK

More firms are moving to position themselves to take a piece of the cloud computing market as the sector is forecast to contribute Sh1.4 trillion to the Kenyan economy in the next decade.

American multinational technology corporation Microsoft, which runs a public cloud computing platform dubbed Azure, defines the concept as the delivery of computing services – including servers, storage, databases, networking, software, analytics and intelligence – over the internet (“the cloud”) to offer faster innovation, flexible resources as well as economies of scale.

In the latest pointer to the growing demand, Kenya’s dominant telco, Safaricom last week unveiled its cloud computing platform in a move it said was aimed at helping businesses and organisations digitise their operations.

Data residency

The platform dubbed VMware will be hosted by data centres based in Nairobi and Kisumu and Safaricom said it will provide enterprise customers with the flexibility to grow their businesses by utilizing computing resources in a scalable manner.

VMware, the telco added, will also give enterprises the capability to run their businesses from remote locations.

“The cloud services include provision of secure hosting services for business applications while complying with data residency concerns, provision of secure connectivity and secure payment integrations to business applications hosted securely on the cloud,” said Safaricom.

According to Cynthia Karuri, the Chief Enterprise Business Officer at Safaricom, demand for cloud services is growing as more firms realise it presents big cost-cutting by shifting from capital expenditure to operational expenditure.


“Being that cloud services are consumed on demand, a business pays for what they need as opposed to investing large capital outlays for capacity that is projected to be usable in the future,” Ms Karuri told the Business Daily.

“Basically, it’s a shift from capital expenditure to operational expenditure that grows with your business. This frees up capital and resources and allows you to deploy these to your core activities as a business,” she added.

A report commissioned by Japanese multinational electronics firm Toshiba established that as of 2021, approximately 63 percent of data storage worldwide relied on traditional hard disk drives (HDDs) but predicted that by 2025, non-volatile storage technologies will claim a 26 percent share which will thereafter shoot to 41 percent by 2030.

“With the global data explosion showing no signs of slowing down, data storage remains a critical concern for businesses,” said Toshiba Vice President Santosh Varghese.

“Storage plays a pivotal role in today’s business landscape and the market has matured quite a bit in the past couple of years in terms of their appreciation of the need to invest in the right kind of storage.”

Cloud Platform Amazon Web Services (AWS) projects in a report that cloud adoption in Kenya is poised to generate Sh1.4 trillion in economic boost within the ten-year period to 2033, representing 0.6 percent of the country’s cumulative gross domestic product (GDP).

According to the study, Kenya is playing in the league of some of the world’s most ambitious economies in the digital disruption wave and notes that 26 percent of local organisations adopted cloud computing in 2021 compared to 49 percent in Western Europe and North America.

“The study demonstrates that the economic impact of cloud computing is guided by returns to scale - greater adoption of cloud computing will lead to proportionally greater productivity gains and economic impact,” read the AWS report.

Potential gains

The chairperson of dx5, which is a digital transformation information-sharing platform, Harry Hare, notes that as consumers become savvier and businesses more reliant on real-time information, data centres become the backbone of this digital revolution.

“The symbiotic relationship between data centres and cloud computing is undeniable. The growth of data centres in Africa is closely intertwined with the proliferation of cloud services. Enterprises are realising the benefits of cloud adoption, such as scalability, cost-efficiency, and seamless collaboration,” states Hare.

“These advantages, in turn, are intensifying the demand for data centre capacity to host cloud applications. With local data centres becoming the bedrock for cloud deployment, Africa is strategically positioning itself as a data hub that negates latency and optimises service delivery.”

Benefits to businesses

On gains for businesses embracing the shift, the AWS report identifies four as key, among them enhancement of business efficiency and effectiveness which leads to streamlined processes eventually giving rise to improved outcomes, and access to a wide range of services which enables ventures to leverage advanced technologies.

Other gains are boosting productivity by facilitating collaboration, mobility and agility within the workforce, as well as promotion of environmental sustainability through the reduction of carbon emissions per unit of data transmitted.

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