Layer3 plots the path to the future for Africa’s cloud market

Layer3, a leading IT and cloud services provider recently held a webinar to discuss the future of cloud adoption in Africa. Guest speakers at the event included representatives of IT regulators in Nigeria and executives from across the cloud technology space. 

The webinar, themed The Future of the African Cloud, brought into focus the progress made thus far by Nigerian and African organizations towards greater cloud adoption. Discussants placed the continent’s performance on various cloud metrics against global trends and suggested a course for Africa as its organizations transited to the cloud.

In his keynote speech, Inuwa Kashifu Abdullahi, Director General of the National Information Technology Development Agency (NITDA), explained that his agency was working to strengthen cloud adoption in Nigeria’s public and private sectors. 

The DG, who was represented by his Special Assistant on Digital Transformation, Dr Aminu Lawal, noted that NITDA had pursued data localization as a path to greater cloud utilization in Nigeria. According to him, this approach would confer multiple benefits for government institutions, private organizations, and the Nigerian economy as a whole.  

“In contrast to the arguments that data localization would cut off access to global cloud services and hamper business growth, I believe that it has far more significant benefits,” he contended. “It would ensure our local data centers’ development, create jobs, and facilitate compliance with our data security and privacy regulations.”  

Mr. Abdullahi pointed out that the agency was driving the implementation of data localization through the Nigeria Cloud Computing Policy (NCCP), which it issued in August 2019. 

“One of the goals of the NCCP is to ensure a 30% growth in the adoption of cloud computing by 2024 among federal public institutions and small and medium enterprises, as well as a 35% growth in cloud computing investment.”

He said that the NCCP’s data localization focus would also help reduce capital flight driven by the adoption of foreign cloud service providers by Nigerian businesses and government Ministries, Departments, and Agencies (MDAs). He also revealed that about 90% of Federal government data hosted externally had since been repatriated to Nigeria.

Speaking at the event, Oyaje Idoko, CEO of Layer3, said that cloud adoption was critical to the future of the continent. 

“As the theme suggests, the future of the African cloud is something that anyone interested in African technology should be concerned about,” Mr. Idoko said. “Cloud computing has become a fundamental requirement for all forward-looking organizations and governments.” 

He however noted that Africa lagged behind the rest of the world with respect to its use of cloud services. He quoted data from the International Data Corporation, which revealed that Europe and North America contribute more than half of the $371 billion global cloud computing market. By contrast, Africa’s public cloud services contribute less than 1% of the global market share. 

“While the growth rate of cloud adoption has averaged about 40% since 2017, we still have a lot of catching up to do,” he said. 

Mr. Idoko also explained that Layer3Cloud was helping to bridge the current gap in cloud adoption in Nigeria and the wider African continent. 

“Through the services available from Layer3Cloud, more organizations are partaking in the global shift to the cloud. Our products, which range from virtual data centers and virtual servers to cloud backup and storage, are enabling a growing number of businesses to enjoy the benefits that the cloud confers.”          

The webinar was held on the backdrop of a report from Xalam Analytics, a digital markets data research agency, which suggests that Africa’s market for cloud services was growing, albeit in challenging conditions.

According to the report, Africa’s public cloud was set to become a $1 billion business by the end of 2021 and could grow to between $1.7 billion and $2 billion by 2025. It says that African businesses are migrating to the cloud to guarantee greater stability, security, and scalability for their IT infrastructure. 

Guy Zibi, Founder and Principal at Xalam Analytics, spoke about the agency’s findings at the webinar. 

“Over the past few years that we have been exploring the use of cloud services in Africa, we have seen banks, government agencies, academic institutions, and other types of organizations accelerate their adoption of various types of cloud-based applications,” Mr. Zibi said. “Our perspective is that the greater migration towards the cloud is underway in Africa.”

Ayotunde Coker, CEO of Rack Center, and a panelist at the webinar suggested a path forward for the cloud in Africa, via smaller service modules. 

“Nigeria is on the cusp of significant growth for a reason,” he said. “The key growth driver for Africa is that we tend to buy things in sachets; we don’t buy the whole product box.”

“The mobile telephony have enabled people to buy airtime in bits. The same thing is going to happen with the cloud.”

“The significant source of consumption channel for digital services is the mobile phone and tablet. Once you get the cloud service to applications right, the consumption is going to be huge,” Mr. Coker submitted.