Cloud computing is being tagged as the next big thing in business IT. So why are so many SA companies still reluctant to embrace it?


There’s a diagram you learn about in business school, which shows the model of diffusion. It’s a bell curve, tracking the way a new idea or product is accepted by the market. Starting at the narrow end to the left, there’s ‘innovators’ and then ‘early adopters’. The curve then peaks and dips with ‘early majority’ and ‘late majority’, before dipping down to the ‘laggards’ to the right –poor fools.

Cloud computing is experiencing its ‘early adopter’ moment in SA right now as increasing numbers of organisations embrace this new form of computing. Wayne Speechly, executive of cloud and communications at Internet Solutions, is watching that curve with interest.

‘Many organisations are getting comfortable with the idea of moving their data centre from its on-site location to an ISP’s data centre. Organisations are also coming to terms with trusting the technologies that drive cloud computing – knowing that their data and services are the same as those they have traditionally hosted on-site.

‘With the roll-out of fibre to all major cities in SA, cloud computing is entrenching itself as a very affordable solution to a variety of problems facing traditional IT infrastructure. As businesses make the transition, we see them unlock capabilities they have not been able to leverage before their migration to cloud,’ he says.

Inevitably some companies are waiting it out on the ‘laggard’ end. Speechly says: ‘Looking at the future of cloud, there is no doubt that the next five years will see an abundance of new and innovative technologies built on top of existing cloud infrastructure, unlocking new business services and performance over traditional IT infrastructure.

‘For the most part, we still have some way to go before cloud becomes the de facto standard for workloads and application processing.’ SA is steadily slipping towards the ‘wrong’ end of the bell curve, ranking 20th out of 24 leading IT economies in terms of cloud computing, according to the 2013 BSA Global Cloud Computing Scorecard. That’s down two spots from 18th in 2012.

‘It is discouraging that SA has not made better progress in adopting policies that are conducive to cloud innovation,’ Drummond Simpson, chair of the BSA SA committee, said at the publication of the report. ‘Every country’s policies affect the global cloud marketplace. It is imperative for SA to focus on improvements in promoting free trade, data privacy, cybercrime and security to improve its standing and help grow the global cloud,’ he says.

SA is also lagging behind African counterparts such as Nigeria and Kenya. A recent report compiled by Arthur Goldstuck of World Wide Worx and unveiled at the AfricaCom conference in Cape Town last November found that in 2013, 50% of companies in SA had adopted cloud services, 48% in Kenya and just 36% in Nigeria. But the report – titled Cloud in Africa: Reality Check 2013 – found that 24% of companies in Kenya, 44% in Nigeria and just 16% in SA said they intend to use cloud computing services in 2014.

Cloud computing is entrenching itself as a very affordable solution to problems facing traditional IT infrastructure

SA hitting a cloud computing usage rate would reach 66% this year, while Kenya may rise to 72% and Nigeria to 80%. ‘Suddenly Nigeria becomes the cloud powerhouse of Africa,’ Goldstuck said at the launch of the report. ‘I don’t think we’ve ever seen such a dramatic shift in the adoption of high level services on the African continent.’

So why are some SA companies reluctant to take the leap? Cloud computing allows companies to increase (or reduce) their IT infrastructure on the fly, with more (or less) data storage and more (or less) licensed software, depending on the company’s needs. At best it grows a business while saving money. Speechly says this has huge benefits for smaller businesses.

‘For SMEs, making a substantial capital investment into their on-site data centre is often not feasible, and they need to invest in their core business. Cloud provides them with the ability to leverage best of breed services, which they can make us of on a “pay as you use” basis,’ he says.

The benefits of cloud computing are already being felt at the Dube TradePort, KwaZulu-Natal’s key new airfreight hub. Hamish Erskine, Dube TradePort property sales and ICT executive, says: ‘Dube TradePort Corporation has introduced data centre infrastructure services as a value-add to our broader business environment. The strategic objective of the Dube TradePort project is to provide a world-class property and air cargo operations environment to support industrial and commercial growth. By investing in data centre and network infrastructure we are able to offer our tenants and remote users the additional benefit of a “local cloud”.Tech-infographic

‘This allows these businesses to have access to a high performance IT environment on an OPEX model, thereby reducing their need to invest ongoing capital and resources in IT. The efficiencies achieved are therefore both from an operational and financial perspective.’

Dube TradePort Corporation’s data centre services are mainly focused on infrastructure, including white space, virtual servers, storage, broadband and disaster recovery, through two high-availability data centres on site, says Erskine.

‘The two key advantages to clients are: firstly, that the data centres are “local”, meaning they are physically accessible to a company’s IT staff and our support staff are local; and secondly that companies can purchase data centre infrastructure on an “as used” basis, allowing the cost advantages achieved from scalability versus purchasing their own infrastructure.’

Sounds perfect, until you hit the practicality and security hurdles. As Gareth Jane, Windows Azure platform strategy advisor at Microsoft in SA, pointed out during ITWeb’s Cloud Computing Summit in Bryanston last July: ‘You can have the most compelling cloud possible, but it doesn’t mean much unless people can actually access it.’ He said problems such as local broadband access and transnational data flows are limiting the growth of cloud computing – and that’s before you consider the risks of sending your business-critical data into the cloud.

‘There is a lot of worry around security, and a lot of work that software vendors need to do to make sure their products are trustworthy,’ he said.

Kenny Inggs, CTO and co-founder of 22seven, shared those fears. He told the same summit the cloud’s agility and scalability eventually won him over. ‘This is the bit that got me, personally, over the initial hurdle of going into the cloud: it enables ideas and thinking of new businesses that we couldn’t build before. In the cloud, you can make everything you do an operational expense, a marginal expense. What that means is that you can structure your model around that to start recuperating the expenses at the right time.

‘We can get access to computing power at a scale that we just haven’t dreamt of before,’ he said. ‘We can run solutions in the cloud that are scalable and robust, for about the same cost as our electricity. We often talk about scale as having another hundred servers ready to go, but it’s almost as nice to be able to scale down; to say, “hey, I don’t really need this anymore”, and to optimise.

‘For example, over the weekend, when there’s very little traffic, bump it down to two servers. During the week, bump it up to 30 again, and only pay for what you need.’ Inggs urged caution, though. ‘The cloud isn’t a silver bullet, if you make stupid decisions, you can burn yourself as badly as anywhere else,’ he said.

Even if companies don’t appreciate the benefits of the cloud, employees and end-users do

Mark Ridley, regional director for Africa at network storage solutions firm NetApp, said successful cloud deployment can be a long road, with many twists and turns. ‘Some CIOs make the mistake of thinking their organisations are more ready for the transition than they actually are – an assumption that can cause some serious growing pains and misunderstandings.

‘We are seeing more and more organisations in SA moving parts of their IT to the cloud and I believe in the next two to five years most organisations will have migrated to cloud services,’ he said.

There’s a growing realisation that, even if companies don’t appreciate the benefits of the cloud, employees and end-users do. They will, regardless of whether or not their company has the necessary security infrastructure in place, use the cloud at work. IT industry insiders are calling this ‘covert cloud spending’… or the far catchier ‘bring your own device’ (BYOD).


Ian Jansen van Rensburg, systems engineering manager at VMware Southern Africa, said at the summit that users experience productivity tools in their private lives they would like to use at work.

‘Most of us can’t get through our working day any longer without using at least two or three devices to finish our daily work. Essentially, we are working more productively thanks to the greater flexibility this model provides, and are consequently happier in our working lives.’

He said some ‘enlightened’ companies are setting up BYOD schemes that allow employees/end-users to buy and use the devices and applications they want to. However, other organisations are saying no to BYOD, only to find that users are bypassing IT and doing it anyway, with their own devices and their own apps and services.

‘The multi-device era and “consumerisation” aren’t really choices – they are unavoidable facts. One thing’s for sure: the traditional management model used by IT for more than 25 years just doesn’t cut it anymore due to the explosion of devices and applications, and the increased expectations of end-users.’

With every new adapter that uses the cloud to get their work done, SA edges further into the world of cloud computing, and deeper into the ‘early adapter’/’early majority’ side of that diffusion bell curve.

By Will Sinclair
Image: Gareth van Nelson/HSMimages