BIS4430

CLOUD COMPUTING IN AFRICA

Ogbeleje, Chidube- M00383325

Okereke, Arnold Ikenna- M00369489

Keywords: (cloud computing, ICT, internet-based, organisation)

ABSTRACT

Cloud computing is an internet-based technology which provides virtual computation

services such as software, database access, manipulation and storage services.

Considering the current economic status of the country Nigeria and Africa, we analyze

the impact of gradual introduction of cloud computing by looking at the current factors

and trends of the information technology sector in Africa and Nigeria for the past

decades.

INTRODUCTION

In 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-based

services. One of these internet-based service is Cloud computing. “The promise of cloud

computing is arguably revolutionizing the IT services world by transforming computing

into a ubiquitous utility”ISACA(2009,Business Benefits With Security, Governance and

Assurance Perspectives, p.4)

Cloud computing is a means of data storage, processing and sharing resources securely

over the internet by both organisations and individuals. This has been embraced by

globally 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 as

seen in World Economic Forum (2009, fig. 1.2)

We cannot fully analyse the factors responsible for the little growth and gradual

emergence of cloud computing into Nigeria and Africa without taking into consideration

the current trend and factors affecting the Information and Communication Technology

sector. In this article we would critically analyse the challenges faced by Information

Technology in Nigeria, as one of the key factors which results to the little response in the

growth of cloud computing in Nigeria and Africa as a whole. our focus would be mainly

on the economy, social awareness and current market analysis of information

technology in relation to cloud computing.

In the next section 2, we would describe the nature of cloud computing and its relation

to information technology, its slight impact to the Nigerian economy and the structure of

the ICT market. “the introduction of cloud computing is going to reduce drastically the

fixed costs of entry and production, turning part of them into variable costs related to the

production necessities.” Etro (2009, pp. 2). As we know cloud computing has a huge

positive impact on the nations that have embraced and accepted its existence, but its

impact has not being felt the underdeveloped and developing nations like Nigeria and

Africa as a whole. As stated by Etro (2009, pp. 2) “This will have a positive impact on

entry and competition in all sectors where fixed ICT spending is crucial”. Nigerians ICT still

needs improvement and infrastructural development, which is would be discussed in

this section.

In section 3 we discuss the factors affecting Africa’s response to cloud computing and

major 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 and

communication 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 section

4 above.

FEATURES AND IMPLICATIONS OF CLOUD COMPUTING

Cloud computing is an internet-based service that provides information and data

storage, transfer, sharing and manipulation on an online server through the use of

internet. This would have a great positive impact on the customers, business firms and

organisations. On one side customers would be able to transfer, share, store and

manipulate their data and information over an online server through the use of ICT

devices such as laptops, cellphones, touch pads, PDAs e.t.c. On the other hand, cloud

computing reduces greatly the cost of business setup by cutting off cost of computer

hardware(in some cases e.g virtual organization) and company server side development

and setup capital of business startups, existing businesses and organisations.

Computing and server side spaces over the internet would be paid for as utility bills(like

electricity bills, gas bills e.t.c) by business startups and business organisations. “firms

will be able to rent computing power (both hardware and software) and storage from a

service provider and to pay on demand, as they already do for other inputs as energy and

electricity” Etro (2009). According to Armbrust et al. (2009) cited in Etro (2009) this

would have a similar impact to the one that semiconductor foundries had on the

hardware industry. Moreover cloud computing would have cost effective structural

impact on industries using software and hardware and indirectly influence their market

value. But these impacts have not been felt in the African ICT sector due to factors

hindering the growth of information technology, yet plans are still been made to remedy

its current situation.

In preparation to embrace the new internet-based service by Nigeria, Sunnet and IBM

have announced a partnership AYANTOKUN (2011) that will help revolutionize

businesses in Nigeria through cloud computing. This would on one side help end users

to share, modify, store and access all their data from any device via the Internet at a

larger scale (internet scale). This is would also serve as a stepping stone for Nigeria’s

ICT sector into the new IT phenomena (cloud computing), which in would give rise to

several business start-ups and in turn would have a positive impact on its current

economic status.

Another important positive impact of the implementation of cloud computing would be

job creation. This would assist in reducing the rate of unemployment in Nigeria and

hence improve its economy.

EVALUATING THE FACTORS INFLUENCING CLOUD COMPUTING:

METHODOLOGY AND DATA

Our evaluation of the factors affecting cloud computing is based on the economic factors

affecting Information and communication technology in Africa most especially Nigeria.

We emphasis the effects these factors have on the cost structure of companies or

organisations investing in Information and Communication Technology, competitive

advantages and economic pressures.

Our methodology is based on general overview and statistical analysis of Information

and communication Technology trends in Nigeria and Africa the past decade.

In accordance with The Development of an E-Commerce Legal Framework for ECOWAS

report (2005). It is appropriate to evaluate the current status of legal and regulatory

frameworks in West Africa in three inter-related areas – infrastructure, IT generally

(investment, trade, human capacity development, hardware, software), electronic

service delivery (e-commerce and e-government). Here we analyse the individual

components of the frameworks of these inter-related areas.

Infrastructure: looking into the basic physical structure required for information and

communication technology in comparison to that which is in use in Africa, the result is

shocking. “Famous for its common fraud crime, Nigeria is the sixth-biggest supplier of

crude oil on earth and currently one of the fastest growing economies in the world. What

about IT - is it ready for it?” As reported by Porębska(2010). We cannot fully analyse this

without taking into consideration the current ICT infrastructure level in Nigeria

IT general(Information and Communication Technologies): on the telecommunication

policy, reasonable growth has been made within ECOWAS regions. Member states have

begun to libralise telecommunication licensing through independent regulatory bodies

that where formed and this has resulted to significant increase in telecommunication

density in the region. But yet this poses a challenge in terms of lack of skilled

labour.“little or no attention has been devoted to ecommerce and related legislative issues,

perhaps because competencies and accomplishments at the general ICT level are still being

consolidated”. (ECOWAS,2005 pp. 11). There appear to be much constraints regarding

the information and communication technology sector, but there is strong level of

awareness about the strategic importance of this(information and communication

technology) to regional development.

e-commerce: due to the fact that e-commerce is a new phenomenon non of the member

states of ECOWAS have effective policies in place to stimulate its development and

regulate aspects of its use.

Asides these factors listed and explained above there are factors that generally affect

information 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)

IT talent shortfall(lack of skilled labor)

Nigeria has a poor literacy level, looking at the ranking by the World Economic

Forum(2011, 346), nigeria is ranked 121 out of 138 for adult literacy level. This is below

average adult literacy level. Looking into the future of our leaders of tomorrow, the

current quality of nigerias educational system is just above average (World Economic

Forum, 2011, pp.345). These and the poor maths and science education(world Economic

Forum, 2011, pp.344) has accounted for the IT staff shortfall.

IT investment

Looking at the current week state of ICT, Infrastructure and economy in Nigeria,

investors, venture capitalist and people seeking to invest into ICT, must analyse and look

deep into nigerias current economic state before investment is made. These tight

descision making has let to nigerias poor ranking when it comes to ICT venture

capitalists(World Economic Forum, 2011, pp.330)

Power generation:

“Nigeria is still in search of solutions to her power sector challenges” as stated by Abiola

and Adebayo (2011, pp. 1). This has affected startups, companies and foreign investors

wanting to invest in Information and communication Technology. As a result of poor

electrical power generation and supply in the Power sector, companies use generator

sets powered by diesel or fuel as alternative to power supply and generation.

Sources: TradingEconomics.com and *CIA World Factbook (30/12/2010) was based on

2006 estimate as cited in Abiola and Adebayo (2011, table. 1)

The above table illustrates that even in the poor state of power generation a reasonable

amount of electrical power has been lost during distribution.

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 variables.

countrykwhpopulationKwh per

person

internet speed

Mbps

tech index

USA3,873,000,000,00

0

307,006,55012615.3660212.375.33

CHINA3,438,000,000,00

0

1,338,299,50

0

2568.9316937.335.3

JAPAN858,500,000,000127,450,4606735.9505814.54.95

GERMANY547,300,000,00081,702,3296698.70745115.225.14

CANADA536,100,000,00034,108,75215717.3736512.295.21

FRANCE447,200,000,00064,876,6186893.08434713.154.92

BRAZIL402,200,000,000194,946,4702063.1304585.973.9

UK345,800,000,00062,218,7615557.80916311.715.12

ITALY315,000,000,00060,483,5215208.0301344.863.97

SOUTH

AFRICA

241,400,000,00049,991,3004828.8402183.093.86

NIGERIA19,210,000,000158,423,180121.25750792.613.32

GHANA6,906,000,00024,391,823283.12766959.693.44

SOURCES: National master- www.nationmaster.com (accessed 2011)

Net index- www.netindex.com ( accessed 2011)

World Economic Forum (2011)

SOURCES: National master- www.nationmaster.com (accessed 2011)

Net index- www.netindex.com ( accessed 2011)

World Economic Forum(2011)

The statistical correlation coefficient ρX,Y(R) between two random variable X(power

generation kwh per person) and Y(Technology index) with mean values μX and μY and

standard diveation σX and σY is defined as:

where E is the Expected value operator, cov means covarrance, and, corr a widely used

alternative notation for Pearson's correlation.

ρX,Y is between +1(positive dependency) to -1(negative dependency)

From our scatter graph and table we deduced ρX,Y(R) = +0.690295188

This is a positive correlation and hence proves that power generation per person in a

country is a factor that affects ICT

The poor power generation and distribution in the power sector has not only affected

the economic growth but also the cost of production of Information and Communication

Technology due to increase in cost of production of Information and Communication

Technology. This has in turn affected the end-users of the ICT through inflation of ICT

service charge to meet the cost of production by the ICT suppliers.

Pricing: due to poor infrastructure and power supply, Nigeria exports raw and semi

processed materials while importing lots of high-processed ones. Poor infrastructure

and power supply is poses a serious challenge to national growth. nevertheless

companies have adapted a “do it you self” approach to reaching their goals. For example

shell established its own data and communication network between Lagos, port

Harcourt and Warri by leasing facilities from the nation's Nigeria Telecommunications

Co. (NITEL) and Nigerian National Petroleum Corporation (NNPC) created a private

telecommunication network said to be today the largest in Africa (the network of 875

km of optical fiber cables). As reported by Porębska (2010). This results in high price of

user end products

ANALYSIS OF HOW BROADBAND PENITRATION, INTERNET USAGE AND

INTERNET SPEED

Cloud computing requires real-time client-server interaction with high band width and

stable connection, which is not yet achievable in Africa most esspecialy Nigeria.

Africa constitutes a small percentage of the amount of internet users in the world.

Nigeria being the country in Africa

based upon statistics gotten from fig 4 above we got a scatter graph illustrating hoe

internet speed affects technology index and we got a positive correlation

where statistical correlation coefficient ρX,Y(R)

X= internet speed Mbps

Y=Technology index

mean values μX and μY and standard diveation σX and σY

ρX,Y(R) = +0.741347492

hence internet speed is a positive dependency of technology index.

Conclusion

Based 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.

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: http://www.internetworldstats.com/stats.htm [accessed 10 Dec 2011]

ISACA(2009)Business Benefits With Security, Governance an Assurance, pp.4 Nation Master.com(2011) Internet statistics[online] available

from:http://www.nationmaster.com/graph/ene_ele_con-energy-electricity-consumption[accessed 10 Dec 2011]

Net index(2011) [online] available from: http://www.netindex.com/download/allcountries/ [accessed 10 Dec 2011]

Porębska (2010)Doing IT in Nigeria[online] Available from: http://datapoint.pl/pl,news,show,23 [accessed 8 Dec 2011]

World Economic Forum(2011) The Global Information Technology report 2010-2011(10th ed) Switzerland