Kenyan firms look to the cloud for growth amid Corona shocks

There has been a surge in demand for data storage with providers reaping huge benefits as Kenyan enterprises look to cloud technology to circumvent economic damage and losses due to Coronavirus (Covid-19) infections.

A new survey titled Africa in the Cloud 2020, an estimated 68 per cent of Kenyan businesses say they will invest in cloud storage services next year.

“The vast majority of businesses found cloud to be important in coping with Covid-19 by enabling remote work,” the study says.

The survey conducted by consulting firm Worldwide Worx, Dell technologies and Digicloud Africa shows that only 29 per cent of Kenyan businesses will maintain their current cloud service budgets.

According to the study, the enterprises said remote work capabilities that cloud technologies enable was the main driver of cloud adoption especially during lockdowns allowing for businesses continuity.

 It means that cloud service providers such as Google, Microsoft, Amazon web services are harvesting their investments several years early as Coronavirus pandemic accelerates digitisation.

About 19 per cent of the enterprises in Kenya recorded growth in business as a result of cloud migration.

Of those interviewed, about 38 per cent said one of the key benefits of cloud migration was scalability while another 38 per cent said cloud service helped the company to innovate.

Digitally transformed

“Businesses that had digitally transformed operations recorded a 71 per cent increase in productivity, compared to their counterparts who had not done so and only achieved 21 per cent increase in productivity,”  Worldwide Worx CEO Arthur Goldstruck said in a webinar.

This comes at a time when Kenya just passed the data security law or Kenya’s version of General Data Protection Regulation (GDPR) as security is a critical factor when migrating to cloud.

Kenya also appointed its first ever data commissioner last month. MPs approved the appointment of Immaculate Kassait,  the former Independent Electoral and Boundaries Commission (IEBC) director of voter education.

Kassait was nominated by President Uhuru Kenyatta last month in compliance with the provisions of the Data Protection Act, 2019 (“DPA”).

Studies show that more than 40 per  cent of the businesses cut their expenses after investing in cloud storage. 

More than 60 per cent of the company’s interviewed said that cloud migration increased their speed to market.

Cloud services also increased customer service operational agility and business efficiency.About 78 per cent of Kenyan enterprises said cloud migration increased the efficiency of the business. 

While 59 per cent used Cloud services for customer service. The report shows that banking and manufacturing sectors were the fastest adopters of cloud migration at 53 per cent and 46 per cent respectively.

Goldstruck added that going by the data from the study, it is evident that digital transformation in Africa is on the rise and organisations’ priority on cloud spend, is proof of it.

Artificial Intelligence, Internet of Things and Big Data also emerged as key drivers to adoption of cloud migration and will be the main factors in the next few years.

Finance, manufacturing, Information Technology, Non-Governmental and Non-Profit Organisations and government dominated the early adopters of cloud storage services.

The race for digitisation is attracting multiple players such consultants like PWC, McKinsey, Accenture, Deloitte keen to cash in on the vacuum arising from lack clear information needed for smooth transition.

Deloitte, however, said that companies are facing several challenges when migrating to cloud platforms. “They face IT complexity, security risk, and operational efficiency challenges”.

Kenyan currency

Perhaps as an indicator of the shift in the times, the Central Bank of Kenya was in September hosting consultants from Accenture on the possibility of digitising the Kenyan currency in one of the most daring attempts at digitisation.

Cloud native businesses such as e-commerce, delivery apps, API providers such as Africa’s Talking were the early winners in this digital awakening.