The big challenges facing the cloud in Africa

 ·22 Jan 2024

Cloud technology can potentially be a multi-billion dollar industry in Africa, but there are several hurdles in the way.

In a McKinsey survey of technology leaders at more than 50 major African businesses, participants said that roughly 45% of their workloads are in the public cloud – on par or ahead of the rates of adoption in North America and China.

Only 17% of respondents said that they had fully moved to the cloud, while 81% had a mix of on-premise and cloud workloads.

“On average, respondents had 45% of workloads in public cloud compared to 23% in private cloud. This is likely due to the quick access and breadth of services offered by the public cloud. At the same time, Africa’s infrastructure and supply chain limitations are likely barriers when it comes to scaling in a private cloud,” the management consultancy said.

Respondents from Southern Africa reported the highest usage of public cloud at 50%, ahead of Western Africa (46%), East Africa (44%), and North Africa (44%).

Respondents from the technology, media, and telecommunications sectors had the highest overall average adoption rate at 82% – 61% of workloads hosted on the public cloud.

Financial services organisations surveyed had the lowest rates of cloud adoption, with 55% of workloads on average on the cloud. This is likely due to regulatory restrictions. In this sector, 39% is hosted on the public cloud.

Global energy and materials and consumer packaged goods respondents had the highest rates of storage services, at 41% and 36%, respectively.

Greatest barriers

53% of respondents said that legal and regulatory constraints were the biggest challenges in cloud adoption. Only 10% of respondents said that the current legal and policy requirements supported cloud adoption.

McKinsey said that 97% of African organisations expect to face serious tech skills challenges, with attracting recruits listed as the number one complaint.

The companies that have had success in attracting talent also said that they have had trouble retaining them due to emigration, as higher-payer regions offer better incentives. Others have left due to the possibility of working remotely.

Other Africa-specific issues include critical infrastructure challenges, power needs (e.g., load shedding), local supply chain shortages of on-premise hardware, a limited history of building up legacy systems and incurring technical debt have all been listed as barriers to adoption.

“Some barriers to cloud adoption – such as managing costs, security, and building an operating model for agility and resiliency – are faced by organisations across geographies.

In Africa, there are also legal and regulatory considerations. Enhancing collaboration between a variety of stakeholders, including service providers, organisations, and regulators, could help address concerns while encouraging cloud adoption and innovation,” said Jean-Claude Gellé, Partner and Leader of Cloud by McKinsey in Africa.

About $797 billion of cloud’s estimated global value of $3 trillion could sit in Africa and Europe by 2030. Our findings indicate a surge in cloud adoption by some businesses across Africa. With an increased focus on addressing local issues coupled with a more cloud-friendly environment, businesses in Africa could unlock this sizeable share,” added Sven Blumberg, Senior Partner and Leader of McKinsey’s Digital & Analytics Practice in EEMA

Read: Rise of AI, complex clouds and evolving work-from-home – major tech trends to look out for in 2024

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