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Experts discuss what is fuelling the adoption of cloud-first strategies in South Africa

Experts discuss what is fuelling the adoption of cloud-first strategies in South Africa

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Sebastiaan Rothman, Senior Consultant Applications and Infrastructure at Altron Karabina

Cloud computing is taking off in South Africa in a big way, and as organisations recognise and leverage the services available to benefit how they conduct business, more and more are aligning with cloud first strategies.

Up to now, there have been two very big considerations when hosting services in the cloud.

Regulatory compliance has been a challenge for many organisations storing personal information in the cloud when these platforms are hosted offshore. Secondly, there have been many concerns related to the performance impact by having services hosted halfway across the world.

Both challenges have been addressed by the local presence of enterprise grade cloud services, making it easier for organisations to consider cloud as the starting point when designing, developing, and delivering services.

A contributing component leading to the adoption of so-called cloud first strategies in South Africa is the increasing availability of cost-effective, high-speed internet connectivity. The biggest caveat of cloud computing is that you need reliable access to broadband internet, something that is becoming more and more available outside of the bigger, more established metropolitan areas.

Additionally, the availability of big-name cloud service providers in South Africa has made hyper-scale cloud services a lot more accessible, enabling smaller organisations to leverage the same technologies previously reserved for an elite few with vast financial and operational resources, able to invest in massively expensive infrastructure and expertise.

Smaller and upcoming organisations are well-positioned to take advantage of cloud. Not having a huge on-premises investments to consider, having a cloud-first approach provides a quicker time to market for services and solutions, enabling them to provide robust solutions without having to invest in expensive hardware. The operational flexibility associated with cloud is a huge benefit to start-ups, allowing them to grow into their services without a great capital expense to get started.

Even though the adoption of cloud is arguably more mature in larger organisations, they are taking note of the fact that migration to cloud is a long and tedious journey and trying to avoid this additional step is a key driver for them to look at cloud first when developing and deploying new services and solutions.

Whilst many applications may already be supported on cloud, redeveloping custom applications to be compatible in a cloud environment is very time consuming and expensive.

With so many vendors and partner solutions available directly on several cloud platforms, often with the same if not more functionality and scalability, paying more attention to cloud as step one has never been easier.

In a world where any organisation, big or small, can compete with the market by unlocking the power and potential of cloud, it only makes sense to get there sooner rather than later.

Trent Odgers, Cloud and Hosting Manager, Africa at Veeam

Cloud requires a fundamental mind-shift in terms of technology benefits as it is no longer only about hosting but also providing organisations with a new and more agile way to do business.

Mobile subscriber penetration in Africa is set to reach 52% by 2025, with an estimated 634 million unique users. This is propelling digital services and driving cultural change, and cloud provides an effective way to leverage mobility and increase capacity for data management in different ways. 

Coupled with mobile subscriber penetration, consumers increasingly need and expect services to always be available. The modern, competitive business needs to be always-on to meet these demands and cloud is an opportunity for organisations to achieve this. In South Africa alone, the uptake of online services is rapidly increasing. 

All of this is fuelling the adoption of cloud-first strategies locally. We are seeing a shift, from not only talking about cloud service adoption to businesses in South Africa, but to aggressively adopting it. 

However, adoption still faces challenges as this shift is reliant on the IT and business decision-makers of a company. That said, we have seen many decision-makers pushing back and asking the pertinent questions – why does this application have to be on-premise? Or, why should this workload be physical as opposed to cloud-based? As they understand the need and the business benefits in migrating sooner rather than later. 

It is important for organisations to remember that cloud-first does not mean cloud-only. 

The ESG 2019 Technology Spending Intentions Survey notes that organisations deploying a new application using public cloud services (unless someone makes a compelling case to deploy using on-premise resources) has increased from 29% (2018) to 39% (2019).

On the other end of the spectrum, organisations deploying a new application using on-premise technology resources (unless someone makes a compelling case to deploy it using public cloud services) decreased to 14% (2019) from 24% (2018). 

Interestingly, 47% of organisations consider both on-premise technology resources and public cloud services equally when considering to deploy new applications. These current numbers have not changed within the past year.  

The dynamic business landscape is seeing many companies still trying to get their heads around how best to approach data, its availability, and its effective analysis.

The intelligent handling and analysis of data in real-time is a given requirement for a modern enterprise in an increasingly competitive environment. Companies must remember that with the growth in importance of data, there are very real risks such as downtime, compliance and security. Implementing proactive, real-time Cloud Data Management tools that can proactively monitor, automatically spot irregularities and act accordingly, is critical.  

While it’s near impossible to prevent all incidents of data loss, theft or malicious attack, a Cloud Data Management approach, combined with a strong and versatile disaster recovery strategy, would go a long way towards future-proofing a modern, agile organisation. Companies must start their transition to Cloud Data Management sooner rather than later.

Dave Funnell, Manager: Cloud Provider, VMware

Businesses are competing in a rapidly changing environment, one that requires them to become more responsive and innovative to customer demands.

The tag line for the way they need to respond is to go through a Digital Transformation, but what does that mean? Simply put this is the integration of digital technology into all areas of a business, fundamentally changing how they operate and the delivery of value to customers.

This obviously puts a lot of pressure onto IT organisations to support business as it looks to develop the application services to support Digital Transformation.

Traditional applications operate in a structured manner and for the past 20 years we have been living in an era where Systems of Record were the dominant application type upon which businesses gained competitive advantage.

We have moved into the era of Systems of Engagement, which are less about records and more about the actual customers. These application services assist business to engage and orchestrate the customer journey, with interactions that are more personalised and interactive across multiple touch points.

This is going to require the rapid development of new application types, with IT having to accelerate the time to market for these applications, with the additional complication of needing to allow the business to be both agile and manage costs.

This is the main reason for the adoption of a cloud first strategy. In the cloud, the hyper-scalers are providing a platform for the development of these application services in conjunction with services accessed via the cloud provider, such as autoscaling, big data and analytics engines.

This can speed up the development of application services and allow for functionality to be incorporated into the application that an enterprise couldn’t develop internally.

As these applications develop further, we will move into the era of Systems of Intelligence, which incorporates Machine Learning and Artificial Intelligence.

Followed by Systems of Autonomy, which will combine these next generation Cloud Native applications along with pre-existing Systems of Record and the data held within.

This progression is going to pose a number of challenges for IT organisations as the level of strain will increase exponentially as they try to manage the varied application services and complexity of integration points from these differing application types.

As the application service is the driver for business competitiveness it is apparent we will evolve into a hybrid multi-cloud world. Why is this?

Developers will choose the platform for their application service with the appropriate hyper-scaler, whether AWS, Azure or GCP, depending upon the specific functionality required.

This will lead to most enterprises consuming services from numerous hyper-scalers, which in turn with require management by IT with a consistent and secure operational platform.

Mark Ackerman, Regional Director, Middle East and Africa, ServiceNow

Back in the days of on-premise data centers and shrink-wrapped software, technology vendors were often accused of providing less value than promised. They may have sold customers more features and more licenses than they needed, or hit them with price hikes once they had them locked in. Not infrequently, companies would waste millions of dollars trying – and failing – to use the technology in ways that actually helped the business.

Such horror stories are less common in the age of software-as-a-service (SaaS) and we see that the most successful CIOs we engage with on the African continent are those who are further along at adopting new SaaS technology and platforms. 

With improved cybersecurity laws and policies coming into effect in South Africa and other parts of the continent, businesses operating in Africa have been empowered to be more decisive and clearer about the strategies for enterprise adoption of cloud solutions.

Companies are now looking to cloud-first strategies to remove all the ‘heavy lifting’ in IT of just keeping the lights on and move towards an environment where the teams supporting business are focusing on business outcomes.

Our conversations uncover that the highest-performing CIOs collaborate with the C-suite to drive better business results. CEOs are looking to their CIOs to be part of a transformational team to change the entire culture of the company, to change the business model and to change the operating model by leveraging emerging technologies that create business outcomes that matter to the CEO.

As a consequence, moving to the cloud and digitising workflows, or drawing on those business skills to build consensus and action around automating and integrating work processes through advanced technology, are the priorities that are driving the modern-day CIO.

A rapid adoption of agile platforms, plus the fact that Microsoft has built two Azure cloud data centres in Johannesburg and Cape Town is evidence and support for the rapid expansion that’s occurring. The fact that the giants of public cloud are investing heavily into South Africa, is proof enough that the tide is turning.

Major challenges which are not new to any adoption of cloud globally, have finally been highlighted and earmarked for resolution – cloud infrastructure, data privacy/protection/security are among some of the bigger challenges. South Africa isn’t new in approaching these, but can learn from others that have gone before to accelerate adoption and avoid common mistakes or issues.

Matthew Kibby, Vice-President: Enterprise at Sage Africa & Middle East

South African companies are competing in a complex market characterised by new compliance requirements, rising customer expectations, aggressive competition, rapid technology change, opportunities to move into new markets, and pressurised technology budgets.

These challenges are driving many organisations to the cloud in search of a more agile, scalable and productive IT environment.

Research by World Wide Worx found that nine out of ten companies in South Africa said they had increased spending on cloud computing last year, and 83% planned to increase these budgets in 2018. A majority (68%) said that time-to-market or speed of deployment was the most prominent benefit of moving to the cloud.

Many enterprises realise they need to modernise their IT environments to remain competitive in a digital world. They don’t want to simply upgrade to the newest version of their business software; they also want to put in place an IT environment that helps them escape vendor lock-in, upfront payments, long implementation cycles and heavy software customisation.

Unlike the rigid and expensive enterprise resource planning (ERP) systems of the past, today’s Software-as-a-Service (SaaS) and cloud business management solutions are agile, modular and rapid to roll out. They’re built using the latest technologies but offer traditional ERP benefits such as integration of processes and systems across the enterprise, a single view of corporate data, and the ability to improve process discipline.

Here are five advantages organisations stand to gain from moving to a SaaS/cloud model:

Speed of deployment: In the past, an ERP installation for a medium-sized or large enterprise could take up to a year to complete; it could take six months or longer to install even the basic features such as financials. Today, one can start driving value from a cloud-based business management solution in a matter of weeks, spending time to market with innovative features.

Moving from capital costs to operational expenditure: Many businesses hold back from large IT projects because of the upfront and ongoing costs, many of them hidden. There’s the investment in hardware infrastructure and software licences, plus ongoing support and implementation costs. It’s simpler and more affordable with cloud solutions that charge per user, per month. Customers benefit from a single, transparent price for the software, the infrastructure costs, implementation and training.

Flexibility: The cloud allows enterprises to purchase software without making large capital investments, knowing they can ramp up or scale down users or functionality in response to the evolving needs of the business. Efficient, reliable and scalable cloud solutions enable companies to cost-effectively and rapidly respond to changes and growth in the business.

Building a digital backbone: Cloud-based business solutions underpin the shift to the next wave of digital technologies by enabling data connectivity on a global scale. They allow organisations to ingest data from a range of sources, including mobile devices and Internet of Things sources, and to feed data to analytics systems, mobile workers, and other systems in real time.

Enhanced collaboration: The workforce gains the ability to access information on the go and from any location from a laptop or mobile device. This means people can capture data or access information without returning to the office. Everyone in the business has access to centralised data as and when needed, regardless of where they happen to be located.

Hans Kohlmeyer, Head of Customer Solutions Architect, MEA, Nokia

The cloud has evolved as critical component in the service and network evolution of communications service providers (CSPs). It presents top- and bottom-line benefits and is the de facto platform fuelling Digital Transformation.

The IT industry and web-scale players were the first to capitalize on cloud, though penetration is ramping up rapidly in CSP networks globally. In the medium-term cloud will also especially benefit CSPs in developing countries where operating costs are critical, service innovations need to be rapid and cheap, and qualified resources are scarce. This as much is true in South Africa as in other African countries. 

A CSP cloud-first strategy not only entails virtualising of servers, data and application infrastructure, but virtualising in all domains in the CSP network, from radio access (Cloud RAN), the transport network (Software Defined Networking -SDN), to the CSP core network (the distributed or centralised servers hosting the CSP applications).

The rapid uptake of cloud-first strategies at CSPs present numerous advantages, many of them overlapping with those seen in the IT industry but some also unique due to the scale at which they operate their network.

These include:

Better resource efficiency which ranges from savings in commoditized and pooled hardware (vs. unique and dedicated), operational cost savings due to enhanced automation and analytics, to cheaper and better access to qualified resources globally.

–    Significant step in service and operational agility. It provides the ability to scale on demand as customers and services require functionality and capacity.

–    Enabling a totally different level of service and operations innovation. With the all-software approach, new services are developed in days instead of months. It is the premise for continues development and deployment.

–    Enables a boost in customer service through deep data analysis, use of AI, automation and rapid action capabilities enabled.

Cloud is also a prerequisite for advanced capabilities enabled by the 5G SA architecture such as large-scale, end-to-end network slicing and ultra-reliable, low latency services enabled from an edge cloud. 

CSPs are in the pole position to build and capitalize on these important capabilities, though adopting a cloud-first strategy has pitfalls. 

Cloud migration is a complex endeavor that requires new skills. ‘Cloud-first’ is not enough, it should also be cloud-smart.

CSPs need to carefully develop an end-to-end network strategy or ‘evolution plan’ with a clear and full cloud-migration roadmap across all domains in the network. It starts with creating a vision for the network five to seven years ahead, looking at the network today, and then for each domain designing a migration path to that vision.

Nokia Bell Labs developed and published the ‘Future X Network’ as the optimal future CSP network vision and many operators use that as a starting point to build their own. Key Future X architecture design principles enabled and required by cloud are, designing towards massive scalability, cloud native-ness, programmability, automation, AI driven, security and openness. 

A cloud-first strategy should be comprehensive. It is not sufficient to adopt cloud-first only for new systems. The network evolution plan should include a cloud roadmap for every system.

Nokia early on embraced a cloud-first portfolio strategy and is today the only vendor able to offer a complete product and services portfolio globally across all network domains. 

In South Africa, and throughout Africa, we are a leading supplier to CSPs with a passion to ensure they have the best designed networks, empower them to be successful, and elevate their subscribers and the countries in which they operate. It is our mission to ensure our CSP customers have great networks to connect any- and everything. 

Daniel Jacobs, Senior Product Manager – Cloud Computing at Vox

There are a number of reasons why cloud-first is an emerging strategy for CIOs and CTOs in South Africa. 

Cost: 

The capex for traditional IT infrastructure is complex. IT decision makers need to predict data, customer and business growth and how this is going to impact the IT requirements of the business in the future. They have to look at breakage, maintenance and staff cost for managing the infrastructure, not to mention the data centre costs, including cooling and electricity. 

Cloud with its pay-per-use model is a very attractive alternative when predicting costs. Although decision makers still need to predict what they’ll need in the future, they can make data-driven decisions. 

With cloud, companies can compartmentalise their IT resources and bill them internally so that they have a better idea of what their return on investment (ROI) is per business unit. This allows them to control their IT spend, streamline their processes and be faster to market. 

Staff: 

Skilled IT staff is a scarce resource in South Africa and unfortunately many are lured by attractive packages overseas and by the diversity of solutions and flexibility offered by ICT companies locally.

Businesses are opting to outsource their IT requirements to managed service providers. Many companies, especially SMEs, can’t afford to have the skills in-house and handing over the management of their IT requirements to specialists with multiple skills makes financial and business sense. 

Added to this is the functionality that as-a-service models offer companies. Mega cloud companies have thousands of devops teams that develop these services with built-in automation, business intelligence and artificial intelligence that add a competitive advantage to businesses. Local service providers, such as cloud service providers that focus on Infrastructure-as-a-Service leverage these applications to add value to their businesses and for their customers. 

Flexibility:

Moving to a cloud environment means high availability and multiple redundancy for your business. Whether you’re a large organisation with several branches and hundreds of thousands of customers or a small ecommerce business, a prolonged outage can cause significant financial and reputational damage. The cloud is very valuable for companies in today’s world of instant gratification and the requirement for business to be always-on. 

Control: 

Although the cloud allows businesses to control their IT spend, decision makers can be starry eyed when it comes to cloud and the pay-per-use model. They forget that it can become a costly exercise if they don’t manage these resources carefully. This is where managed service providers such as Vox can guide them along their cloud journey. Providers have the tools and know-how, and focus on total cost of ownership and ROI to ensure a business’s cost of moving from physical tin to the cloud doesn’t explode. 

Locally, businesses are now dictating that cloud is where they want to go. However, they are making more data-driven decisions of where their applications are going to live. This is where a hybrid and multi-cloud approach comes in. It is not about a single cloud strategy, but rather about making informed decisions around the best platform for a particular application. 

 

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