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Cloud computing levels small business playing field

August 8, 2013 • Cloud Computing, Opinion

The software piracy rate in Africa is as high as 80%, according to the latest Business Software Alliance (BSA) figures, and this is placing many businesses across the continent at risk, costing them millions of dollars every year in system malfunctions, security breaches and shut-downs.

The software piracy rate in Africa is as high as 80% (image: Microsoft)

The software piracy rate in Africa is as high as 80% (Image source: Microsoft)

The conundrum is that many businesses and particularly Small and Medium Enterprises (SMEs) across Africa cannot afford the high costs of good software, which helps to protect their ideas and the intellectual property behind the success of the business. Purchasing and upgrading properly licensed software can make up 80% of a business’s IT spend, and one of the biggest challenges SMEs face in today’s harsh economic conditions is finding technology that meets their needs without breaking the bank.

‘Cloud computing’ is taking the continent by storm and is literally changing the way businesses and individuals access technology. As broadband availability in Africa has increased, driving data costs down, cloud computing has become a huge shaper of the way people communicate and conduct business on the continent.

Cloud means that instead of relying on expensive IT infrastructure and hardware, everything can be hosted and managed online, or, in the cloud – from storing data, managing servers, and accessing applications and software. This means no discs, data storage boxes, wires, cables, hard drives, or the expensive physical security needed to protect all of this. The immediate cost benefits are huge, especially for SMEs that often don’t have the capital for IT infrastructure investment.   Additionally, moving to the cloud offers savings that come from different and flexible software pricing models.

One such pricing model is software-as-a-services a model whereby cloud customers can buy access to software and applications as they need them. Instead of paying for  all your software up front, including more capacity than might be necessary right away, software is ‘rented’ in the sense that users only pay for what they use,  as they use it – ‘pay as you go’ as it were. This can save customers up to 20% of their software budget, without them having to compromise on quality.

What’s more, running software online means access to automatic updates and patches, which is more cost-effective than having to buy and install a whole new program. This also lowers IT costs as the latest version of software is always available without the need for IT support. For example, our newest cloud offering, Office 365, offers pay-as-you-go pricing and is available in various packages, with each one specifically designed to meet a particular need. Users can also subscribe to specific applications, without have to spend unnecessarily on programs they won’t use. This type of software purchasing is set to increase dramatically this year, according to the International Data Corporation, rising by 68% compared to 2012.

Subscribing to software delivered over the web enables businesses and individuals to take advantage of enterprise-class software without the burden or cost of buying and managing the technology. So as cloud continually brings down the barriers of entry to properly licensed software, the benefits to business and the economy will grow. The African SME sector, which is recognised as accounting for over 90 percent of private business and contributing more than 50 percent of employment and GDP, will be able to leverage better technologies that scale up as they grow.

Businesses will also be able to avoid the negative consequences of using unlicensed software including system malfunctions, slow computing speed, and a high vulnerability to security breaches. This will save them thousands of dollars in lost revenue every year. In addition, for every $1 invested in properly licensed software, a return of $437 will be added to GDP in low-income countries, according to BSA figures.

Using legitimate software also protects intellectual property and fosters innovation, which leads to economic growth, job creation, and encourages development of knowledge-based industries. The African Intellectual Property Organisation also points out that many SMEs are not aware that they can and should include intellectual property in their development strategies. This can stifle growth and innovation and allow more established enterprises in the market gain a competitive advantage.

Cloud computing has the potential to transform the region. It enables global growth for businesses and provides an alternative to piracy in emerging markets where SMEs are seeking to engage the economy in spite of a lack of traditional infrastructure.

Daniel Kamau, Anti-Piracy Lead for Microsoft West East Central Africa and the Indian Ocean Islands

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