Clouds in Africa (or, You Have Less Time than you Think)
Recently, I worked with some Dynamics Partners in Africa. Like Partners everywhere, they seek to aggressively grow their businesses to gain the twin benefits of scale and market position, so they can survive and prosper in the long term. They are keenly aware that growth is not optional, and that the industry is materially changing underneath them.
Fortunately, many do this against a backdrop of economies still needing to invest in many forms of basic infrastructure to take their place on the world economic stage. So demand for business solutions is strong for them, even now. Some are experiencing 30%+ growth in revenue, year-over-year. Which, of course, is good news.
My assumption in heading to the continent was that the Cloud phenomenon would not really have taken hold there, at least yet. That Partners there would have the luxury of some time to restructure their business model.
I was wrong.
It turns out that there is strong and growing demand for Cloud-based solutions, even in these emerging markets. The reasons for this demand are the same as elsewhere – preservation of capital, lower costs, less perceived risk.
The way in which this demand gets served is somewhat different – instead of software publishers investing directly in hosting capacity and demand generation, telco’s seem to be stepping up to the plate and leveraging their existing infrastructure to field Cloud offerings. In some cases, the very Partners who provide the business applications end up disintermediated by their “customer”. As elsewhere, the only thing they can really lay claim to that will have a long term market value is specific IP that the bigger players cannot readily develop, or maintain. They clearly understand this, candidly in a way that many Partners in “mature” economies do not seem to, in my experience.
To be sure, Cloud offerings do not meet every need, and traditional offerings will continue to be sold around the globe. But we all know that demand is fundamentally shifting.
And if Africa is any indication, emerging economies could well be poised to “leapfrog” more mature ones by adopting Cloud solutions early. Coupled with a far lower cost of labour, and a bent towards innovation, this propensity to be early adopters could well spread the Cloud phenomenon at a far faster rate than many today expect. The real gains from this could fall to younger, hungrier, and ambitious entrepreneurs located in far flung corners of the globe.
So if you have yet to truly consider your Cloud strategy, and clearly define how you will transition your practice today to meet this spreading demand, my New Year’s message is simple.
Do it now. You probably have less time than you think.