SA cloud market worth $2,3 billion by 2020


Cheaper data and more accessible connectivity will drive the growth of the cloud infrastructure and professional services market in South Africa – which has the potential to become a $2,3 billion market over the next three years.

Kabelo Makwane, newly appointed MD for Cloud First business at Accenture in Sub-Saharan Africa, says enterprises across several industries throughout the world are rapidly migrating from traditional on-premise IT infrastructures to new orchestrated cloud platforms that allow the pooling of several cloud-based systems to provide cost-effective, flexible and more automated solution for a company's IT requirements.

The global cloud market is estimated to be worth $224 billion, according to industry research. Over the past few years, the market has seen compound annual growth of between 16% and 27%.

"The cloud market opportunity is significant. In South Africa, if the growth momentum continues above 16% for cloud infrastructure and above 40% for professional services, this market has the potential to become a $2.3 billion over the next three years. The bulk of this will come from the private sector," said Makwane.

Manufacturing has shown the highest demand for cloud because these companies want to focus on their core business rather than run IT shops. They have a need for agile infrastructure that will enable them to manage demand spikes without the need to overinvest.

"Nowadays, it is no longer about buying the latest and greatest IT equipment. Businesses want to understand how the service is going to contribute to the top line and their business transformation as well as enable them to innovate in how they access existing and new market opportunities. IT is no longer in the back-end just supporting business strategy but has in itself become business strategy for many organisations," said Makwane.

Cloud computing, in its simplest form, allows companies to access IT-based services, including infrastructure, applications, platforms and business processes, via the internet. A cloud-based model provides rapid acquisition, low to no capital investment, relatively low operating costs and variable pricing tied directly to use.

"The advantages of taking away the nightmare of having to manage different disparate systems such as servers, storage, networks, security and the many applications in a typical enterprise are immense," said Makwane.

Cloud computing has been one of the pertinent topics of discussion at the CFO Summit series, with the likes of Oceana CFO Imraan Soomra, reigning CFO of the Year Woolworths' Reeza Isaacs and McDonald's finance chief Zafar Mohamed providing their input. Keep an eye on upcoming CFO South Africa events.

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