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  • 1. BIS4430 CLOUD COMPUTING IN AFRICA Ogbeleje, Chidube- M00383325 Okereke, Arnold Ikenna- M00369489 Keywords: (cloud computing, ICT, internet-based, organisation) ABSTRACTCloud computing is an internet-based technology which provides virtual computationservices such as software, database access, manipulation and storage services.Considering the current economic status of the country Nigeria and Africa, we analyzethe impact of gradual introduction of cloud computing by looking at the current factorsand trends of the information technology sector in Africa and Nigeria for the pastdecades. INTRODUCTIONIn the past few decades we have witnessed the bubble and burst of the internet age,which has given rise to e-commerce, social networks, advertisement and internet-basedservices. One of these internet-based service is Cloud computing. “The promise of cloudcomputing is arguably revolutionizing the IT services world by transforming computinginto a ubiquitous utility”ISACA(2009,Business Benefits With Security, Governance andAssurance Perspectives, p.4)
  • 2. Cloud computing is a means of data storage, processing and sharing resources securelyover the internet by both organisations and individuals. This has been embraced byglobally but with little response from Africa.In accordance to the most current statistics given by the World Economic Forum (2009),Africa has the least response of 1%.Graphical survey and statistics of response of organisations and Geographical regions asseen in World Economic Forum (2009, fig. 1.2)We cannot fully analyse the factors responsible for the little growth and gradualemergence of cloud computing into Nigeria and Africa without taking into considerationthe current trend and factors affecting the Information and Communication Technologysector. In this article we would critically analyse the challenges faced by InformationTechnology in Nigeria, as one of the key factors which results to the little response in thegrowth of cloud computing in Nigeria and Africa as a whole. our focus would be mainlyon the economy, social awareness and current market analysis of informationtechnology in relation to cloud computing.In the next section 2, we would describe the nature of cloud computing and its relationto information technology, its slight impact to the Nigerian economy and the structure ofthe ICT market. “the introduction of cloud computing is going to reduce drastically thefixed costs of entry and production, turning part of them into variable costs related to theproduction necessities.” Etro (2009, pp. 2). As we know cloud computing has a hugepositive impact on the nations that have embraced and accepted its existence, but its
  • 3. impact has not being felt the underdeveloped and developing nations like Nigeria andAfrica as a whole. As stated by Etro (2009, pp. 2) “This will have a positive impact onentry and competition in all sectors where fixed ICT spending is crucial”. Nigerians ICT stillneeds improvement and infrastructural development, which is would be discussed inthis section.In section 3 we discuss the factors affecting Africa’s response to cloud computing andmajor challenges that the Information and Communication Technology face in Nigeria.This would be based on some key factors that hinder and affect the ICT sector.In section 4 we would provide a good statistical market analysis of the information andcommunication technology sector through the statistical Correlation and dependence.These data’s would focus on ICT trends, market trends, population classifications,market pressure and how it affects Cloud computing.Section 5 would be our final result and conclusions based on the analysis done in section4 above. FEATURES AND IMPLICATIONS OF CLOUD COMPUTINGCloud computing is an internet-based service that provides information and datastorage, transfer, sharing and manipulation on an online server through the use ofinternet. This would have a great positive impact on the customers, business firms andorganisations. On one side customers would be able to transfer, share, store andmanipulate their data and information over an online server through the use of ICTdevices such as laptops, cellphones, touch pads, PDAs e.t.c. On the other hand, cloudcomputing reduces greatly the cost of business setup by cutting off cost of computerhardware(in some cases e.g virtual organization) and company server side developmentand setup capital of business startups, existing businesses and organisations.Computing and server side spaces over the internet would be paid for as utility bills(likeelectricity bills, gas bills e.t.c) by business startups and business organisations. “firmswill be able to rent computing power (both hardware and software) and storage from aservice provider and to pay on demand, as they already do for other inputs as energy andelectricity” Etro (2009). According to Armbrust et al. (2009) cited in Etro (2009) thiswould have a similar impact to the one that semiconductor foundries had on the
  • 4. hardware industry. Moreover cloud computing would have cost effective structuralimpact on industries using software and hardware and indirectly influence their marketvalue. But these impacts have not been felt in the African ICT sector due to factorshindering the growth of information technology, yet plans are still been made to remedyits current situation.In preparation to embrace the new internet-based service by Nigeria, Sunnet and IBMhave announced a partnership AYANTOKUN (2011) that will help revolutionizebusinesses in Nigeria through cloud computing. This would on one side help end usersto share, modify, store and access all their data from any device via the Internet at alarger scale (internet scale). This is would also serve as a stepping stone for Nigeria’sICT sector into the new IT phenomena (cloud computing), which in would give rise toseveral business start-ups and in turn would have a positive impact on its currenteconomic status.Another important positive impact of the implementation of cloud computing would bejob creation. This would assist in reducing the rate of unemployment in Nigeria andhence improve its economy.
  • 5. EVALUATING THE FACTORS INFLUENCING CLOUD COMPUTING: METHODOLOGY AND DATAOur evaluation of the factors affecting cloud computing is based on the economic factorsaffecting Information and communication technology in Africa most especially Nigeria.We emphasis the effects these factors have on the cost structure of companies ororganisations investing in Information and Communication Technology, competitiveadvantages and economic pressures.Our methodology is based on general overview and statistical analysis of Informationand communication Technology trends in Nigeria and Africa the past decade.In accordance with The Development of an E-Commerce Legal Framework for ECOWASreport (2005). It is appropriate to evaluate the current status of legal and regulatoryframeworks in West Africa in three inter-related areas – infrastructure, IT generally(investment, trade, human capacity development, hardware, software), electronicservice delivery (e-commerce and e-government). Here we analyse the individualcomponents of the frameworks of these inter-related areas.Infrastructure: looking into the basic physical structure required for information andcommunication technology in comparison to that which is in use in Africa, the result isshocking. “Famous for its common fraud crime, Nigeria is the sixth-biggest supplier ofcrude oil on earth and currently one of the fastest growing economies in the world. Whatabout IT - is it ready for it?” As reported by Porębska(2010). We cannot fully analyse thiswithout taking into consideration the current ICT infrastructure level in NigeriaIT general(Information and Communication Technologies): on the telecommunicationpolicy, reasonable growth has been made within ECOWAS regions. Member states havebegun to libralise telecommunication licensing through independent regulatory bodiesthat where formed and this has resulted to significant increase in telecommunicationdensity in the region. But yet this poses a challenge in terms of lack of skilledlabour.“little or no attention has been devoted to ecommerce and related legislative issues,perhaps because competencies and accomplishments at the general ICT level are stillbeing consolidated”. (ECOWAS,2005 pp. 11). There appear to be much constraintsregarding the information and communication technology sector, but there is stronglevel of awareness about the strategic importance of this(information andcommunication technology) to regional development.
  • 6. e-commerce: due to the fact that e-commerce is a new phenomenon non of the memberstates of ECOWAS have effective policies in place to stimulate its development andregulate aspects of its use.Asides these factors listed and explained above there are factors that generally affectinformation and communication technology in developing countries such as:  Broadband usage and penetration  IT Talent short fall(lack of skilled labour),  IT general(investments, hardware, software)  Electrical power generation and consumption  pricing  Government (ICT promotion)
  • 7. IT talent shortfall(lack of skilled labor)Nigeria has a poor literacy level, looking at the ranking by the World EconomicForum(2011, 346), nigeria is ranked 121 out of 138 for adult literacy level. This is belowaverage adult literacy level. Looking into the future of our leaders of tomorrow, thecurrent quality of nigerias educational system is just above average (World EconomicForum, 2011, pp.345). These and the poor maths and science education(worldEconomic Forum, 2011, pp.344) has accounted for the IT staff shortfall.IT investmentLooking at the current week state of ICT, Infrastructure and economy in Nigeria,investors, venture capitalist and people seeking to invest into ICT, must analyse andlook deep into nigerias current economic state before investment is made. These tightdescision making has let to nigerias poor ranking when it comes to ICT venturecapitalists(World Economic Forum, 2011, pp.330)Power generation:“Nigeria is still in search of solutions to her power sector challenges” as stated by Abiolaand Adebayo (2011, pp. 1). This has affected startups, companies and foreign investorswanting to invest in Information and communication Technology. As a result of poorelectrical power generation and supply in the Power sector, companies use generatorsets powered by diesel or fuel as alternative to power supply and generation.
  • 8. Sources: and *CIA World Factbook (30/12/2010) was based on (2006 estimate as cited in Abiola and Adebayo (2011, table. 1The above table illustrates that even in the poor state of power generation a reasonableamount of electrical power has been lost during distribution.
  • 9. CRITICAL ANALYSIS OF HOW POWER GENERATION AFFECTS ICT In accordance with the World Economic Forum (2011) we take tech index as a measure of ICT and cloud computing readiness. Tech index is a measure of technological readiness. The technology index is created by comparison of several economic and (information technology factors and indicators (World Economic Forum, 2011 Here we analyse critically how power generation and consumption affects ICT in Nigeria and other African countries in comparison with other foreign countries through the use .of statistical regression analysis of Correlation and dependence of the variablestech index internet speed Kwh per population kwh country Mbps person5.33 12.37 12615.36602 307,006,550 3,873,000,000,00 USA 05.3 7.33 2568.931693 1,338,299,50 3,438,000,000,00 CHINA 0 04.95 14.5 6735.95058 127,450,460 858,500,000,000 JAPAN5.14 15.22 6698.707451 81,702,329 547,300,000,000 GERMANY5.21 12.29 15717.37365 34,108,752 536,100,000,000 CANADA4.92 13.15 6893.084347 64,876,618 447,200,000,000 FRANCE3.9 5.97 2063.130458 194,946,470 402,200,000,000 BRAZIL5.12 11.71 5557.809163 62,218,761 345,800,000,000 UK3.97 4.86 5208.030134 60,483,521 315,000,000,000 ITALY3.86 3.09 4828.840218 49,991,300 241,400,000,000 SOUTH AFRICA3.32 2.61 121.2575079 158,423,180 19,210,000,000 NIGERIA3.44 9.69 283.1276695 24,391,823 6,906,000,000 GHANA (SOURCES: National master- (accessed 2011 (Net index- ( accessed 2011 (World Economic Forum (2011
  • 10. (SOURCES: National master- (accessed 2011 (Net index- ( accessed 2011 (World Economic Forum(2011The statistical correlation coefficient ρX,Y(R) between two random variable X(powergeneration kwh per person) and Y(Technology index) with mean values μX and μY andstandard diveation σX and σY is defined as:where E is the Expected value operator, cov means covarrance, and, corr a widely usedalternative notation for Pearsons correlation.ρX,Y is between +1(positive dependency) to -1(negative dependency)
  • 11. From our scatter graph and table we deduced ρX,Y(R) = +0.690295188This is a positive correlation and hence proves that power generation per person in acountry is a factor that affects ICTThe poor power generation and distribution in the power sector has not only affectedthe economic growth but also the cost of production of Information and CommunicationTechnology due to increase in cost of production of Information and CommunicationTechnology. This has in turn affected the end-users of the ICT through inflation of ICTservice charge to meet the cost of production by the ICT suppliers.Pricing: due to poor infrastructure and power supply, Nigeria exports raw and semiprocessed materials while importing lots of high-processed ones. Poor infrastructureand power supply is poses a serious challenge to national growth. neverthelesscompanies have adapted a “do it you self” approach to reaching their goals. For exampleshell established its own data and communication network between Lagos, portHarcourt and Warri by leasing facilities from the nations Nigeria TelecommunicationsCo. (NITEL) and Nigerian National Petroleum Corporation (NNPC) created a privatetelecommunication network said to be today the largest in Africa (the network of 875km of optical fiber cables). As reported by Porębska (2010). This results in high price ofuser end products
  • 12. ANALYSIS OF HOW BROADBAND PENITRATION, INTERNET USAGE AND INTERNET SPEEDCloud computing requires real-time client-server interaction with high band width and.stable connection, which is not yet achievable in Africa most esspecialy NigeriaAfrica constitutes a small percentage of the amount of internet users in the world.Nigeria being the country in Africabased upon statistics gotten from fig 4 above we got a scatter graph illustrating hoeinternet speed affects technology index and we got a positive correlation
  • 13. (where statistical correlation coefficient ρX,Y(RX= internet speed MbpsY=Technology indexmean values μX and μY and standard diveation σX and σYρX,Y(R) = +0.741347492.hence internet speed is a positive dependency of technology index
  • 14. ConclusionBased upon analysis made above Africa has apoor ICT foundation and some factors inhibiting the growth of ICT. These factor should be taking into consideration by any organization wating to venture into ICT in Nigeria.Cloud computing is a wonderful technology that would help develope and enhance the ICT sector of the African economy but as long as these factors are taken into consideration in Africa, the success rates are promising.
  • 15. Reference• Abiola and Adebayo (2011) Towards a public Private Patnership in Nigeria power sector: Challenges and Prospects• Ayantokun(2011)Sunnet, IBM partner to deliver cloud computing in Nigeria. Nigerian Tribune, 16th Aug.• Armburst et al (2009) cited in Etro (2009) ‘the Economic Impact of Cloud Computing on Bussiness creation, Employment and Output in Europe’, Review of Bussiness & Economics, pp. 180-205• Etro (2009) ‘the Economic Impact of Cloud Computing on Bussiness creation, Employment and Output in Europe’, Review of Bussiness & Economics, pp. 180- 205• Internet World Stats(2011) Internet World Statistics[online] 21 Sep Available from: [accessed 10 Dec 2011]• ISACA(2009)Business Benefits With Security, Governance an Assurance, pp.4• Nation Internet statistics[online] available from: consumption[accessed 10 Dec 2011]• Net index(2011) [online] available from: [accessed 10 Dec 2011]• Porębska (2010)Doing IT in Nigeria[online] Available from:,news,show,23 [accessed 8 Dec 2011]• World Economic Forum(2011) The Global Information Technology report 2010- 2011(10th ed) Switzerland