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Companies Overlook the African Cloud Ecosystem’s Potential

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Vusi Melane
Vusi Melane
Staff Writer

There is a significant disparity in the rate of cloud adoption between emerging and mature markets. For instance, in Europe and North America, virtually every company with over 250 employees has embraced the cloud in some capacity. In contrast, only 17% of the 6,000 African companies with a headcount above 250 are fully utilizing cloud services.

An Associate for the investment bank, DAI Magister, Oliver Warren highlights that this untapped potential signifies an almost $1 billion opportunity that existing cloud orchestration players have largely neglected.


Cloud orchestration opportunities

“Despite the size of the industry, there are virtually no startups in Africa specifically focusing on cloud orchestration. For international cloud orchestration companies, expanding into the African market could offer several advantages, including benefitting from an underserved business ecosystem with a rapidly growing demand for cloud services and establishing a pioneering foothold in the region.” he said

“On the other hand, native startups have a unique edge in addressing the specific needs and challenges of the African cloud space. With a deeper understanding of the cultural, economic, and regulatory landscape, they can develop tailored solutions that resonate with businesses on the continent.”

Startups need to position themselves

“Moreover, by building a strong presence in their respective bases, these startups can position themselves as leaders in their region and potentially expand to other burgeoning marketplaces in the future.” he added

Warren acknowledges that organizations aiming to expand cloud adoption in Africa will encounter a series of barriers to overcome.

“Entering any emerging market is not without its challenges. The limited awareness and understanding of cloud technologies among many enterprises taking their first steps into the cloud can be a major hurdle.”

Concerns over data security, privacy and sovereignty

“Organisations are still hesitant to migrate to the cloud due to concerns about data security, privacy, and sovereignty. Cloud orchestration companies must therefore invest in education and awareness campaigns to help enterprises understand the benefits of cloud computing and how cloud orchestration can help them overcome the associated challenges.” he adds

Warren concluded by saying, “Regardless of the obvious difficulties, emerging markets such as Africa present a significant opportunity for growth and innovation. As more enterprises embrace digital transformation and adopt cloud technologies, the demand for cloud orchestration solutions is likely to rise. Cloud orchestration companies that can navigate the challenges and tap into this market early on are likely to reap the benefits in the long run.”

 

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