Earlier this year saw the launch of Microsoft data centres in South Africa. Located in Johannesburg and Cape Town, this world-class cloud infrastructure that will power emerging cloud, AI and edge computing innovations across the continent. Azure is the first of Microsoft’s intelligent cloud services to be delivered from the new data centres, with Office 365 and Dynamics 365 anticipated for later in 2019.
Lee Kuyper, COO of SilverBridge Holdings, believes this will provide local insurers with significant opportunities.
“For one, the benefits of the cloud become far more tangible for most businesses,” he said.
“Cloud computing has been around for a while but has always been something removed for most in Africa or something that happens ‘somewhere else’. With the new Microsoft data centre regions, it becomes something that is closer to home that can be practically implemented.”
Even though financial services organisations have become more open to move to the cloud in recent years, there has been a general hesitancy to fully embrace it.
The new Microsoft Cloud region will offer the same enterprise-grade reliability and performance as offered in the over 40 cloud regions around the world with the added benefit of data residency.
“So far, the reception from our customers to these data centres has been positive,” added Kuyper.
“Although some have been working with and have embraced the cloud for a while, there are benefits to be realised from having the option of local data centres.”
For one, data is stored locally. South Africa’s two regions provide geographic redundancy capability, meaning that data replication can happen within the country for backup and recovery purposes. There will also be private connection available via Azure ExpressRoute which provides 99.95% dedicated availability.
Opportunity for the industry
“Insurance is an industry which is typically risk averse and in many cases for valid reason,” said Kuyper.
“Insurers deal with very sensitive customer information but also provide a critical service which requires a high level of credibility and trust. Having the option of local data centres just supports these underlying fundamentals. In addition, it also serves as a basis for the industry to drive innovation in terms of the way their customers interact with and experience insurance.”
The Microsoft cloud provides a level of security and compliance far beyond what any business could invest into on their own. Insurance is a highly regulated industry and by using the Microsoft cloud, insurers can tick many of the required boxes.
“From a regulatory point of view, local customers can rest assured that no data protection issues will be raised as all data is hosted within South African borders, rather than in other geographic regions,” said Kuyper.
“With these concerns removed, the improved speed and accessibility of new cloud environments as well as certain Azure functions that deliver better data and application management, will result in improved service delivery to customers.”
Furthermore, the fact that there are now physical Microsoft servers in the country mean SilverBridge customers can have a faster connection to the data centre thereby improving responsiveness of the applications on customer devices.
“Perceptions around the cloud are already changing even without the local data centres,” said Kuyper.
“However, their arrival will accelerate this and give South African business an improved ability to leverage the power of the Microsoft Cloud. Of course, the cloud on its own will not deliver the full value available.
“To really gain benefit, insurers will need to move towards business applications that are built for and that leverage the cloud not just from an infrastructure perspective but also from the wide range of services which are available on the platform.”
According to an IDC study, commissioned, spending on public cloud services in South Africa will nearly triple over the next five years, and the adoption of cloud services will generate nearly 112,000 net new jobs in South Africa by the end of 2022. The study also shows that increased utilisation of public cloud services and the additional investments into private and hybrid cloud solutions is enabling organisations in South Africa to focus on innovation and building ‘digital businesses at scale.’ In turn, this enablement will help businesses generate close to R80 billion in new revenue over the next five years.