Here below a very interesting presentation organized by Connecting Africa

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Cloud Evolution in Africa
Tuesday September 10th 2019
Part of the Connecting Africa Digital Series produced in association with

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Speakers
Guy Zibi
Managing Director,
Xalam Analytics
Ray Le Maistre
Editor-in-Chief, Light
Reading, for Connecting
Africa

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Agenda
• Introduction
• The African cloud
• Major cloud services players
• Key considerations for cloud service providers and enterprises
• The complexities of the African cloud sector
• What comes next
• Q&A

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Introduction: Why are we talking about cloud?
• One of the key trends to be examined in a series of webinars
during the next six weeks as part of the Connecting Africa Digital
Series -- look out for details on Connecting Africa at
http://www.connectingafrica.com/
• Demand is growing among enterprise users in Africa for
connectivity to data centers and access to cloud services
• Major global cloud players are now located and operational on the
continent of Africa
• Potential major impact on digital potential and growth prospects
• A major topic at the upcoming AfricaCom event in Cape Town

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Introduction: Cloud at AfricaTech
• With disruptive enterprise technologies such as IoT, blockchain and AI
now being implemented, a new event is being launched as part of this
year’s AfricaCom called AfricaTech, comprising a range of conference
tracks, deep-dive industry and technology sessions
and more, as well as a significant
exhibition area.
• Within AfricaTech there is a premium
conference track called Data Centres
Africa, which will deliver guidance on a
range of important topics including
data centre trends, performance and
reliability, the evolution of the African
cloud ecosystem and more.

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Poll results – important for some time already

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Making headlines at Connecting Africa

8. The Evolution of Cloud Services in Africa
Connecting Africa Digital Series
September 2019
Guy Zibi – Principal
gzibi@xalamanalytics.com
@xalamzibi

9. The African cloud is here

10. 10
They are using the African cloud.
STARTUPS
RETAIL
ESTABLISHED
FINANCIALS
PUBLIC
SECTOR
© Xalam Analytics LLC - 2019

11. 11
African enterprises have a powerful impetus for digital transformation
© Xalam Analytics LLC - 2019
A young, highly connected, exceedingly
demanding customer base
 Africa’s Generation X and Z – 275m by 2019
 ~30%-35% of the adult population actively
uses a smartphone
 Miserable customer experiences are no
longer acceptable
An amorphous, multi-formed, increasingly
unpredictable competition
 Competitors are everywhere: global,
regional, national, local
 Different set of operational and regulatory
parameters
 Thousands of startups looking to “disrupt”
 Challenged consumer budgets
 Unpredictable power supply
 Heavier regulatory burden
 Tough forex pressures
 Cost control is paramount
A tougher operating context
Sources: Xalam research estimates; (*)Xalam analysis of UN data

12. 12
Cloud infrastructure has come closer to the African consumer
© Xalam Analytics LLC - 2019
The African enterprise ICT opportunity cannot be ignoredDramatic expansion in the reach of cloud, CDN networks
+200%
INCREASE IN
HOSTING POWER CAPACITY
~5m
formal
enterpri
se units
~500
compani
es
generati
ng
~$200m
/yr*
Highly
innovative
Fintech
~+1000
corporat
es with
sales
>$50m
Top 200
banks -
~$70bn
annual
revenue*
Sources: Xalam research estimates; (*)Xalam analysis of Jeune Afrique data (2016)
Source: Xalam colocation market dashboards
African edge PoP locations – Q2 2019

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Audience Poll Question #1
Would access to cloud services make a difference to your
company's operations?
a) Yes – this is already the case for my company
b) Yes, I believe it would make a difference
c) No, I don't believe it would make a difference
d) Don't know/not sure

14. The African cloud is complex and varied

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Africa is not an ideal environment for cloud services
© Xalam Analytics LLC - 2019 Sources: Xalam research estimates
 Need 4G, FTTH - ~>10mbps
 ~50%-60% of the African population still out of
4G network coverage
 Anywhere, any time secure access
 Vulnerable to shutdowns, power outages
 No single point of failure
 Some governments profess preference for a
more centralized model
 Ideally <50 ms
 Too many markets at >100ms of closest cloud
data centers
 Need agile, local currency platforms
 Forex impact is material
 Some data cannot be hosted overseas
 Heightened data sovereignty concerns
USD NGN
EGP
EUR XOF
XAF
ZMK
MWK
HIGH-SPEED CONNECTIVITY ALWAYS ON DECENTRALIZED
LOW LATENCY REGULATORY-COMPLIANT
AOA BWPETB
GHS
EASY& FLEXIBLE PAYMENTS

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Cloud readiness is work in progress
© Xalam Analytics LLC - 2019
Sources: Xalam research cloud readiness ranking
0.00 2.00 4.00 6.00 8.00 10.00
Angola
Mozambique
Gabon
Namibia
Senegal
Rwanda
Egypt
Nigeria
Morocco
Mauritius
Cloud Readiness Score
Sample Africa Cloud Readiness Scores – Q2 2019
Mostly Cloud Ready
On path to be cloud
ready
Not yet ready

17. 17
African cloud usage is complex and varied
© Xalam Analytics LLC - 2019
*Estimates based on Xalam’s analysis of ~150 cloud services contracts; from Xalam enterprise and cloud
market dashboards.
Mostly
Cloud-Ready
Work in
Progress
Not Cloud
Ready
Banks/
Financ
e
Startups
Retail
Public
Service
Oil/Gas/
Industry
Key cloud applications adopted by African enterprises*
Country
Cloud
Readiness
All In
Converted/Cautiously aggressive
Exploring – Early, very basic usage
Legend – Cloud usage level
Not using/considering
Source: Xalam research estimates

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Audience Poll Question #2
Which of these would have the most positive impact on accelerating
demand from African enterprises for cloud services?
a) Hosting of the applications in my home market
b) Hosting of the applications in Africa (if not available in my home market)
c) Lower prices
d) Local currency pricing
e) Broader choice of cloud service suppliers
f) Greater selection of applications tailored to the needs of African markets
g) Something else

19. Outlook: the cloud game changer

20. 20
Cloud services are a fundamental infrastructure pillar of African digital transformation
© Xalam Analytics LLC - 2019
The gateway to transformational
technologies: virtualized
compute, analytics, AI, IoT, etc.
Facilitating economic
transactions, building financial
footprints
Main vehicle to access content
Connectivity Payments Cloud services

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The African cloud will be big
© Xalam Analytics LLC - 2019
0%
5%
10%
15%
20%
25%
30%
2018 2022-25
Cloud services contribution to African Enterprise ICT Revenue*
*Including both private/managed cloud and public cloud services
Source: Xalam Research estimates; forecasts using constant FX.
~10%-20%
~20%-30%
+$2bn in incremental top line revenue over 2018-23 period
Cloud services revenue growth vs. other sample segments*
0%
5%
10%
15%
20%
25%
30%
Enterprise ICT Mobile
Services
Retail
Broadband
Cloud Services
CAGR-2018-23
~20%-30%
One of the fastest-growing segments in the African ICT market

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The African cloud will be hybrid
© Xalam Analytics LLC - 2019
Infrastructure constraints weigh
predominantly on the public cloud
But the public cloud is growing faster
– will triple in size by 2023
Above average caution towards
public cloud – the migration will take
some time
Managed/Private options still ~70%-
80% of cloud revenue
Sources: Xalam Research estimates.

23. 23
The African cloud will be local
© Xalam Analytics LLC - 2019
Global Cloud Platforms – In Africa
Large corporate accounts, MNCs, startups
African Cloud Platforms
SMEs, startups
 Some markets and
segments will be
highly-dependent
on local providers
 There is room for
African MSPs;
 But they must
evolve

24. Malaikum Xalam.
@xalamanalytics
www.xalamanalytics.com

25. Information Classification: General
Q&A
Guy Zibi
Managing Director,
Xalam Analytics
Ray Le Maistre
Editor-in-Chief, Light
Reading, for Connecting
Africa
Find out more about the topics covered today
at AfricaCom, the continent’s largest and most
influential tech and telecoms event, at:
https://tmt.knect365.com/africacom/