Kenya leading the way for Africa in cloud computing

Kenya is in line to become the pioneer of cloud computing in Africa over the coming years, with the country due to receive significant foreign direct investment from some of the biggest international players in tech. As the nation gets to grips with the rise in smartphone usage, widespread adoption of next-generation software and improved connectivity via the impending 5G networks, leading tech names are flocking to East Africa to encourage a data centre ‘boom’.

Major players such as Microsoft, Huawei and Amazon Web Services are seeking to encourage small firms and demonstrate the power of cloud computing with free storage services in readiness for a cloud computing revolution underpinned by fibre optic connectivity and 5G data transfer. In 2019, Microsoft unveiled its inaugural cloud data centre based in Africa, with the US conglomerate focusing its efforts on the likes of Nigeria and Ghana as well as Kenya.

The beauty of the cloud is that it is impacting all corners of the business world. There are game-changing opportunities for industries of all shapes and sizes. In the education sector, schools and students can collaborate via the cloud, improving engagement and efficiencies. The iGaming sector is also experiencing security benefits from the cloud due to the presence of  decentralised RNGs and algorithms ensuring fair online casino games. The cloud has also helped to reinvent the way the financial sector operates, with encrypted data centres making it easier for financial businesses such as solicitors and banks to store sensitive data off-site and still retain on-demand access.

More Kenyan businesses likely to realise the benefits of cloud data servers

There is a feeling that the cloud computing ‘boom’ will occur when businesses recognise that cloud-based data servers are just as efficient as hosting and managing their own data servers in-house. Currently, Kenyan users of cloud-based servers often must sign up for storage in servers based overseas – even the other side of the world. It’s hoped the localisation of cloud-based servers will also improve average internet speeds with reduced distances for the transmission of data. This is a benefit that even the Kenyan government appears keen on, ensuring sensitive government data is housed locally for improved national security.

It is fair to say that machines have been replacing human labour since the Industrial Revolution. Data and documentation storage are just a small cog in the wheel of today’s automated world, where robots are increasingly used to drive efficiencies and even replace tens of thousands of manual workers in the process. Leading banks and financial services are investing heavily in artificial intelligence (AI) and machine learning to help mitigate credit risks and enhance customer experiences. Some local ‘digital’ banks such as Zenka already operate fully in the cloud. However, the constant need for upgrades and the development of cloud-based data centres is a significant expense for traditional banks.

There is no doubt that the Kenyan market is one of the most intriguing for overseas investors, given that it’s one of the most active users of the internet in Africa after South Africa and Nigeria. Even including South Africa and Nigeria, the continent comprises less than 1% of the worldwide data centre capacity available today. Microsoft’s African data centre launched last year equates to almost 50% of the continent’s cloud data capacity on its own. That’s despite being a continent with almost a fifth (17%) of the planet’s population. It demonstrates the opportunities that exist for multinational firms to invest heavily in African data centres in the coming years.

The challenges facing overseas investors in Kenya’s cloud-based future

According to a report on the continent’s data centre boom by Xalam Analytics, Kenya along with Nigeria and South Africa, are set to receive multiple investments from overseas during the next three years. Actis, a London private equity firm, is reportedly investing some Sh25 billion into the continent’s data centres. Kabir Chal, director at Actis, believes the “digitisation” and “the inexorable migration to cloud” makes Africa a huge potential market for cloud-based data storage.

There is one major roadblock preventing Kenya from leading the way for Africa in cloud computing – its power supply. Kenya ranks lowly compared with South Africa in the power stakes, averaging below 2,000MW versus South Africa’s 40,000MW average, despite the two nations boasting similar population sizes. It recently stopped importing power from outside Kenya. Presently, power-hungry tech firms in Kenya are having to depend on large, inefficient generators powered by expensive diesel and petrol to offer much-needed energy. Combine this with restrictive upload and download speeds and a dearth of fibre optic networks and it’s easy to see that investment won’t provide an overnight solution in Kenya.