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Africa’s Cloud Market Paves The Way For Gold Rush

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Africa is emerging as a huge battleground for global cloud providers. Microsoft launched its first data center in the Africa region back in March 2019. Just after three months, Huawei followed the footsteps and announced offering cloud services from data centers in Johannesburg and Cape Town. 

Apart from this, the global cloud leader AWS (Amazon Web Services) has announced to ensure full operability of Africa’s Availability Zones. So, without a doubt, Africa has a gold mine to offer when it comes to the data center market and fuel cloud adoption.

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The reason behind Africa’s gold rush

International investors are rushing to fund the cloud revolution in the African cloud computing market. This sudden flow of cash is due to the increased adoption of smartphones and the mass adoption of enterprise software on the continent. 

The governments and organizations on the continent are ditching their in-house data centers for storage and computing due to the increased online population. One of the key factors is to adopt cloud-native sooner than later.  

The localization of data storage will help improve connectivity by eliminating latency issues. The governments have also mandated to host the local data domestically. 

If we adhere to the statistics, numbers are also promising for Africa’s cloud industry. The continent is home to 16% of the global population and contributes 5% to the global GDP. The enterprise and wholesale services markets in the continent are worth more than US$10 billion a year, according to Xalam Analytics. The revenue numbers are growing phenomenally with more than 400 companies generating an annual revenue higher than $200 million, 1000+ corporates generating more than $50 million in yearly sales, 5 million formal SMEs, and thousands of cloud-native technologies. It’s the ocean of opportunities for the global providers just right there to support this emerging mega infrastructure.

Global cloud providers have already shown interest because, without availability in Africa, cloud providers don’t seem to present globally. According to Xalam Analytics, broadband internet connections in Africa reached close to 430 million at the end of 2018. To lure the ever-growing digital presence of the African population several tech companies have formally launched their services. The continent is one of the fastest-growing markets for Facebook, WhatsApp, Microsoft Teams, and other applications. Netflix marked its presence back in 2015, Spotify in 2018, other notable players include Dropbox, Uber who are expanding as per the demand.

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The ocean of opportunities

The cloud providers have the two best spots to hit in Africa’s cloud market. The first one is the public sector which involves hefty profits as the highest levels of government are involved in decision making. Xalam Analytics estimates Africa’s public sector to be 25-35% of total enterprise spend on the continent.

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The second-best opportunity for cloud providers lies outside South Africa, the region’s largest cloud market. The providers need to go hard as the region prevails its own challenges such as lack of infrastructure and strict privacy laws. Notably, Huawei seems the first global cloud provider to build a public cloud platform out of Nigeria.

No matter what, the battle for the African cloud has started and it promises to be fierce.

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