Cloud computing starts to show its impact on SA

9 Dec 2011

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. 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.

"The cellphone is a powerful business tool not only in South Africa but in the rest of Africa. 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," says Frank Rizzo, managing partner: IT advisory at KPMG Services.

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.

SA can become the cloud computing hub

"With the undersea cables, a vast amount of bandwidth is coming to Africa. 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," says Rizzo.

"Nothing stops South Africa from becoming the cloud computing hub for the rest of Africa. 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," he adds.

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. 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.

Cloud is not technology - it's business

The survey also found that approximately 45% 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 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.