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Bringing the Cloud to the Developing World

November 10, 2011 - 6 Comments

By Jason Kohn, Contributing Columnist

The evolution of the cloud is big news within mature tech markets in North America, Europe and Asia. But, what will cloud services mean for developing countries? More than you might think.

At its core, the cloud promises lower costs for information and communications technology (ICT) and ubiquitous access to information and applications. These benefits look attractive to any business, but for companies in developing economies — companies less likely to have the capital for large, modern ICT infrastructures — the cloud could provide an enormous benefit.

As fixed and mobile broadband connections continue to grow in emerging markets, cloud services could make it possible for entrepreneurs to simplify the launch of new businesses and compete for customers anywhere in the world.

Socioeconomic Benefits from Cloud Services

A 2010 paper by Nir Kshetri of the University of North Carolina, Greensboro, surveyed the research on cloud drivers and effects in developing economies, and outlined the following potential benefits:

In theory, it is possible for the developing economies to catch up with the West as the cloud allows them to have access to the same IT infrastructure, data centers and applications….

[U]nlike client-based computing, which requires installation and configuration of software and update with each new release as well as revisions of other programs with every update, software on the cloud would be easier to install, maintain and update. This benefit is particularly important for the rural users who have less IT training.

These observations have not been lost on policymakers and business leaders in the developing world. In Kenya, for instance, Safaricom recently launched the largest cloud service in Africa. Reporting on the new initiative, David Talbot of MIT’s Technology Review described the potential impact:

In Kenya, traditional IT infrastructure is particularly costly in both absolute and relative terms. Electricity costs about 20 cents a kilowatt-hour — roughly 50 percent more than the U.S. average of 13.5 cents. A server might cost about $5.00 a day to run (more than $1,800 a year), not including cooling and management costs.

Considering that salaries in Kenya average $6,265 for an accountant and $14,588 for an IT manager, that leaves traditional in-house IT infrastructure affordable mainly to well-funded start-ups and to larger businesses, like insurance companies, banks, and large retailers. And all players, no matter their size, must contend with relatively frequent power outages.

Succeeding in a Less-than-Ideal Business Climate

Of course, there are other barriers to entrepreneurship in developing economies. Lack of mature ICT infrastructure combined with complicated (and sometimes corrupt) local bureaucracies make it extremely difficult to start a business. It’s because of these factors, however, that developing economies may realize the greatest benefit from the cloud.

Alex Laverty of the University of California, Los Angeles, who writes for the blog The African File, describes this seeming contradiction:

The process to set up a business in many African countries is difficult and often intentionally prohibitive. This is changing as neo-liberal economic reforms are implemented, but the difficulty remains in many countries. For many people, the desire to migrate is often caused by the lack of employment opportunities for themselves in their home country.

However, if there was a mechanism where they could innovate, create, and market their ideas and their products, perhaps the need to seek pastures anew would be mitigated to an extent, or at least cause more interlinks to be set up due to the connection between producers and electronic sellers. Thus in states that have environments that do not favor new business, there would be a higher likelihood that their producers would move to the cloud or seek out opportunities that allowed them to bypass traditional trade bottlenecks, corruption, and inefficient bureaucracy.

Laverty published an extensive survey of sub-Saharan Africa, attempting to gauge the “cloud readiness” of countries in the region. The study explored the potential for various cloud applications — indexed with ratings of each country’s broadband and mobile subscribership, state of ICT infrastructure, and difficulty and time involved in starting up a new business.

The complete findings, which are fascinating, can be seen on a comparative Cloud Ready Index. The upshot: cloud services hold the potential to jumpstart entrepreneurship efforts in a number of African countries.

It will be interesting to see how this process unfolds in the next decade. Meanwhile, we can thank the service providers for investing in the essential infrastructure for cloud services, and  thereby creating the environment where new business ideas can be pursued and entrepreneurs may prosper.

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  1. The "cloud" is often criticized and put down, it is refreshing to see that there exist a great opportunity for people via the Cloud. For technology to provide such an opportunity for people, one that could help families in a struggling economy excites me. I wonder, is there more the collective "we" can do to help.

    • @CJ, agreed. As an example, security issues are at the forefront of those concerns about the cloud. These issues have been addressed, so that even the late-adopters now have fewer reasons not to adopt cloud apps. That said, the collective "we" can help by explaining the benefits of cloud service usage in terms that mainstream users would understand. Moreover, it also helps to point out that issues raised about cloud apps are common issues in existing legacy self-managed IT installations. Besides, due to the complexity of ensuring that web servers are secure, it's wise for many small businesses NOT to attempt a do-it-yourself approach to online security. In contrast, cloud service providers have trained security practitioners who use the most current information and practices. Security is an ongoing challenge -- it's a constantly evolving area of expertise, and most entrepreneurs or small business owners would likely not want to invest the time and effort to master this skill-set.

      • @David Those are great points. One of the big arguments I hear about the cloud, is the loss of control. How can you backup your data? How do you plan for disaster recovery? How do you trust cloud providers? I think there is this great fear that engineers have with letting go and having others in control, having to rely on others. I can't say I disagree, but at the end of the day, for many, the cloud is a great solution.

        • @CJ, understood. During the cloud service procurement process, access to monitoring and control tools is something to consider as selection criteria. Also, service outage and management escalation protocol is important -- you need to know the vendor's service recovery approach to perform a risk assessment. Fortunately, many of the same tried-and-tested due diligence questions about network "managed services" vendor selection also apply in this cloud procurement scenario.

  2. The cloud may soon work in third world countries, but it isn't likely to work in ours. (UK) with only the people in urban areas able to access it with a barely fit for purpose connection. Upgrades are planned for cities, but there is a growing digital divide with those at the wrong side of it unable to make the most of the internet and emerging markets.

    • @cyberdoyle, thanks for sharing your perspective. Perhaps the UK can improve its market coverage over time, with the deployment of solutions that adapt to each unique local market environment. When I consider the progress that's been made in some Eastern European countries, then I can believe that it's possible for others to overcome connectivity challenges and reach their local market objectives.