twitter Facebook Linkedin acp Contact Us

SA prepares for the drive to the cloud

South African companies are more receptive to moving at least some of their business activities to the cloud.

South African companies are more receptive now than ever before to moving at least some of their business activities to the cloud, says Frank Rizzo, managing partner, IT advisory at KPMG Services 

“With the rapid adoption of smartphones and tablet devices in South Africa, we are seeing consumers driving demand for cloud computing," said Rizzo. "One only needs to look at how people are uploading their family photographs and holiday videos to sites such as Facebook, Flickr, YouTube, and Zoopy to see the cloud in action in SA."

A recent KPMG global survey of organisations that will use the cloud and companies that will provide cloud services has shown that the cloud is moving beyond IT and widely starting to impact on business operations. A true cloud solution is one where users can access a flexible volume of services as needed via the internet.

Indeed, such an approach has the potential to deliver significant cost savings with 76% of both groups of respondents citing cost savings as an important driver to cloud adoption. Even more intriguing are the ways in which the cloud may lead to fundamental innovations and process breakthroughs.

“The cellphone is a powerful business tool not only in South Africa but in the rest of Africa," said Rizzo. "Entrepreneurs are driving their businesses through their phones whether it is with voice, text, or social media. Mobile data also plays an integral part in this. These mobile entrepreneurs are leveraging off the power of the internet for research on best practice, marketing their business, and interacting with potential clients from around the world."

But for a cloud model to work effectively, connectivity issues in South Africa need to be resolved. Businesses require stable and resilient bandwidth to drive operations in the cloud. To this end, cloud service providers still need to be assessed on integrity, reputation, and trust just like any other service provider.

“With the undersea cables, a vast amount of bandwidth is coming to Africa," said Rizzo. "The continent has a proud history of being in a position to leapfrog others when it comes to implementing technology. Cellphone networks being a case in point where we have some of the best telecommunications operators in the world when it comes to high speed mobile networks and penetration."

There is also no need for African companies to build data centres or go the traditional IT implementation route. Instead, Rizzo says, they can outsource to other markets and focus on their core business.

“Nothing stops South Africa from becoming the cloud computing hub for the rest of Africa," said Rizzo. "We can outsource to other markets and be the central point for this new landscape. Government therefore has an important role to play in driving this potential employment boom. We need those visionaries in government and their partners to start running with this."

Beyond connectivity, the elephant in the room remains that of security. Half of the IT executives surveyed say security is the most important challenge when it comes to the adoption of cloud services.

“South Africans are more aware of security issues than many other markets," said Rizzo. "This applies to both the physical world and that of the digital one. It comes down to cloud service providers needing to assure their clients that the necessary security is in place.”

Rizzo used the example of the online banking boom of the late 90s to show how eager South Africans are to adopt new technology despite security concerns. Banks made sure that they had measures in place to protect the consumers.

“In the old days, service providers had to earn trust," he said. "But today there has been a shift with a lot of people going from the departure point that service providers have their trust until they break it.”

The survey also found that approximately 45 percent of the respondents had not evaluated the tax implications of cloud or do not know if these factors are being evaluated. Questions such as what happens when you start transacting in the cloud and what are the implications of running a business with client data spread over the world need to be asked.

“The SA Revenue Services is seen as a centre of excellence when it comes to taxation. How do they see the impact of the cloud? One thing is certain. All of this will take time to address and resolve,” Rizzo said.

But who is ultimately responsible for leading the migration to the cloud? As the role of the traditional CIO expands to break down potential silos and integrate internal and external business needs, systems, and partners, you will see the arrival of the chief integration officer, Rizzo believes: “The move to the cloud is not a technology issue but a business one. The CEO and CFO are becoming more actively involved in the decision-making process because of the business benefits and the potential cost reductions of migrating.”

Cloud calls for executives to challenge their thinking, to look at old problems in a new light, and to create new opportunities.

"Business professionals need to focus on the business value and potential of cloud over its technical capabilities or merits," said Rizzo. "At the same time, business must work with the IT organisation to avoid pockets of capabilities that will create disparate data sets to manage. However, one thing is certain – 2012 will see a shift in the way companies approach cloud computing thanks to the consumer growth in the market over the past 18 months."

The Bell team in Richards Bay consists of more than 800 machinists, welders, and assemblers. (Image source: Bell)

GFE Power Product’s extensive range covers generators from 10 kVA up to 3,000 kVA. (Image source: GFE Power Products)

The funding is the largest-ever equity raise in the minigrid industry according to Husk. (Image source: Adobe Stock)

The initiative will help African contractors participate in annual infrastructure investments. (Image source: Afreximbank)

ITS has evolved into a sophisticated systems approach, providing numerous opportunities to revolutionise road networks. (Image source: Adobe Stock)

Invest International’s Lara Muller; Ivory Coast Minister of Finance and Economy, Adam Coulibaly; and Ambassador Designate to Ivory Coast, Jeroen Kelderhuis. (Image source: Invest International)

The Yellow Metal Machine Rental team with some Wacker Neuson equipment. (Image source: Wacker Neuson)

Although displaying resilience, the report warns that African banks remain exposed to physical climate risks due to both sovereign and industry lending. (Image source: Adobe Stock)

WAA and VCMI will seek to establish regulatory frameworks to enable access to high integrity and fair voluntary carbon markets for WAA member countries. (Image source: Adobe Stock)

The parties will also promote the mutual exchange of information and expertise in the field of export credit policies and practices. (Image source: TBD Group)

Inside Condra’s Johannesburg factory: an overhead crane positions an electric motor during assembly of hoist and crab. (Image source: Condra)

IVECO is renewing its entire product range, all at once. (Image source: IVECO)

The MoU was signed alongside the Africa Health Business Symposium. (Image source: Africa CDC)

Both the IMF and EIU expect SSA to rank as the world’s second fastest growing economy in 2024. (Image source: Adobe Stock)

There has been a focus on the sugar industry. (Image source: Adobe Stock)

At WFES, Gotion High-tech will showcase its latest products and leading green energy solutions at its booth. (Image source: Gotion High-tech)

The new Perkins 5012 is a full-authority electronic engine optimised and purpose-built for power generation applications. (Image source: Perkins)

SSAB will begin deliveries of the new products in 2026.

The key issues restricting sub-Saharan Africa’s manufacturing sector will be unpacked at Manufacturing Indaba later this year. (Image source: Adobe Stock)

Through the innovative solution, each vessel can fill two tank containers on average between two ports. (Image source: Maersk)

Hyphen is developing sub-Saharan Africa’s largest, most advanced and only fully-vertical integrated green hydrogen project. (Image source: Hyphen)

According to Liebherr, the Used Equipment Marketplace is extremely user-friendly. (Image source: Liebherr)

Electricity storage will be pivotal in unlocking renewable projects and meeting energy demand. (Image source: Adobe Stock)

With RFID, assets can be given unique digital identities that enable users to identify and locate them all at once, from a distance, in real time. (Image source: Brady)

Africa Data Centres and DPA SA have broken ground on their solar farm in the Free State. (Image source: Africa Data Centres)

A Cat PM310 Cold Planer in action. (Image source: Caterpillar)

A larger stockholding of WEG products facilitates ready access for customers. (Image source: WEG Africa)

African nations have turned to the concept of power pools to address the continent's energy deficit and foster regional cooperation. (Image source: Synergy Consulting)

Dietmar Siersdorfer is expanding his role as Middle East managing director at Siemens Energy to include Africa. (Image source: Siemens Energy)

SEW-EURODRIVE is aggressively driving its African resource expansion by focusing this year on Botswana, Zimbabwe, Eswatini and Mozambique. (Image source: SEW EURODRIVE)