Cloud computing next battlefield for technology giants

Cloud services offer data storage and computing through the Internet. PHOTO | AFP 

In Summary

• Currently, Africa does not account for a large chunk of the global cloud services market but has potential for growth.
• One of the stumbling blocks to adoption of cloud services in Africa has been the lack of reliable Internet connectivity.

By MUTHOKI MUMO
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Global technology giants are scrambling for a piece of cloud computing, making it the next battlefield in Africa and Kenya.

Cloud services offer data storage and computing through the Internet. A cloud user, be it an
individual or company, does not need to run processors or store data in a locally based centre or hard drive. 

The headache, however, lies in the level of trust that firms, especially financial providers, may have in them. Proponents of this technology argue that it reduces the costs associated with running and maintaining data storage facilities. With the exponential rise in information generation, these capital costs would otherwise keep rising.

Currently, Africa does not account for a large chunk of the global cloud services market but has potential for growth.

Over the past decade, cloud computing has shaped up as a battlefield for the world’s technology giants. Cloud services account for 17 per cent of IBM’s revenue but the group needs a competitive edge, given that it is tailing market leaders Amazon, Google and Microsoft.

It is this competitive edge that IBM chief executive and chairman Ginni Rometty was sharpening when she declared cloud one of the key pillars of the company’s business outlook.

Ms Rometty said the company’s goal was to help clients glean insights that could inform strategy based on data stored on its cloud. “Data is the world’s next natural resource,” said Ms Rometty.

Microsoft has signed a deal with Internet service provider Liquid Telecom to get its Azure product into the hands of more small and medium-sized enterprises (SMEs) in Africa.

One of the stumbling blocks to adoption of cloud services in Africa has been the lack of reliable Internet connectivity.

IBM has signed a Sh307 million deal with Sidian Bank, the first local financial institution to sign up to Big Blue’s cognitive cloud services. IBM is betting heavily that augmentation of cloud services with cognitive computing capabilities will appeal to clients and strengthen its position in the market.

Cognitive computing systems deploy a number of tools, from natural language processing to pattern recognition, to learn from experience and even provide users with useful insight and recommendations.

In the case of Sidian Bank, IBM’s cognitive computing system mines data stored in the cloud to help the bank detect and solve problems faster.

Research carried out by the University of Nairobi’s C4DLab in 2014 found that while 69 per cent of respondents were using some form of cloud computing, concerns around security and ambiguity of the regulatory framework in Kenya continued to be a hindrance to greater adoption of cloud services.

“With rapid proliferation of data, cloud is becoming the platform that enterprises turn to for innovation, but security and compliance concerns remain,” said Mr John Considine, IBM general manager for cloud infrastructure.

Safety concerns arise from the control that company’s may cede when they opt for cloud computing. Particularly, on the public cloud, a firm has to trust that its service provider will keep its data secure and provide access on demand.

For companies in heavily regulated sectors such as health and financial services, such a proposition could be problematic. In Kenya, this is exacerbated by a lack of clear policy on data protection or cyber security.

IBM hopes to address these challenges through introduction of new safety features to its cloud. However, even with these provisions, the company faces an uphill battle. 

In its 2016 report on the state of the cloud services market, American research and advisory firm Gartner remained unconvinced by IBM’s cloud offerings. On the other hand, Gartner had a favourable view of Amazon Web Services.

While AWS is considered by Gartner many times the aggregate size of all other providers in the market, Microsoft’s Azure was ranked second and Google third. 

Competition is also posed by local firms such as Safaricom that offer their own range of cloud services.