Here’s how Amazon’s South Africa cloud region will impact enterprises

The launch earlier this month of an Amazon Web Services (AWS) region in Cape Town ratchets  up the competition among the hyperscale cloud providers in Africa, providing enterprise tech leaders with more services to choose from and different pricing options.

The presence of AWS also helps ensure  that  rival vendors that have not yet opened their own facilities will rush to do so, for fear of missing out on a growing market, thus providing businesses with even more choice.

The main benefits of in-region hyperscale data centres include lower latencies between the central hosting environment and local end users, since the data centres are closer to the users;  the ability to store data locally and thus adhere to data sovereignty rules; and advanced services for technology such as AI, IoT, and mobile applications. The hyperscale cloud facilities in South Africa also serve other markets in sub-Saharan Africa.

Businesses can leverage these services, eliminating the need for to start from scratch building their own applications, which can require hard-to-find talent. As cloud providers strengthen their offerings in Africa, new services are cropping up.

Cloud technology supports new services

 “We’re seeing more and more interesting use cases in AI-driven data analytics especially in the financial services industry,” said Julia Nill, enterprise solutions director at Meltwater Africa, a SaaS company that develops media monitoring and business intelligence software. “For example, AI and big data is being leveraged to detect fraud or potential money laundering; and also being used to improve credit scoring and investment strategy. We’ve also seen a lot of interest in implementing big data to improve supply chain monitoring.”

The new AWS cloud region in Cape Town, the 23^rd AWS region globally, consists of three Availability Zones, essentially data centres with redundant power, networking, and connectivity within the region. These zones are meant to provide customers the capability to run production applications and databases that are more scalable and fault tolerant than what a single data centre would be able to offer.

Amazon’s expansion and investment into Africa started more than 15 years ago. With a development centre in Cape Town — where the Amazon Elastic Compute Cloud (Amazon EC2), which provides scalabale computing capacity, was first created — and AWS corporate offices in Johannesburg, the launch of the Africa (Cape Town) region was something the company had always made clear was on their expansion roadmap. 

The launch of the new region means that customers with data residency requirements and those expected to be in compliance with the Protection of Personal Information Act (POPIA), are now able to use cloud services while storing their content in South Africa.

AWS offers a range of data services

The AWS region offers pay-as-you-go options, and enterprises can now take advantage of the availability of the ‘af-south-1′ API to plug their own data into services including the Amazon Relational Database Services, Amazon Redshift cloud data warehouse, and Amazon Elastic MapReduce for big data processing and analysis. AWS provides data migration services and EC2 allows businesses to run their own applications in the cloud and add virtual servers as their applications, data and user base grow.

Among other benefits, the services can speed the ability of enterprises to test proof-of-concept applications and launch new products and services to market.

The new AWS region joins other cloud services, notably Microsoft Azure cloud regions in Cape Town and Johannesburg. Huawei and Google also offer services for the region but have not yet built their own data centres, and Oracle has said it would enter the local market later this year.

There are fundamental similarities among the providers. For example, Microsoft and Azure regions are architected to comprise mutliple availability zones.  They share other basic features (also with Google) such as self-service, instant provisioning, and identity management.

Comparison shopping is complicated

As competition among the cloud providers heats up, pricing has generally declined, and Microsoft, AWS and Google all offer by-the-second for compute services. But comparison shopping can get complicated since the pricing models differ slightly, different companies can get various discounts, and though basic services are similar, the providers have different strengths and advanced services.

Among the notable AWS services are: 

• App integration
• Machine learning and predictive analytics
• Databases and storage solutions
• Developer, engagement, and management tools
• Business productivity tools
• Compute

Azure on the other hand is most popular for services such as 

• Big data and predictive analytics
• IoT integration
• Blockchain technology
• Scalable data warehousing
• DevOps
• Game and app development

Another complication is that not all services are offered immediately, when a new region is launched. Athough Microsoft launched its region in the first quarter of 2019, offering Azure cloud infrastructure, it took the rest of the year to roll out the Office 365 office productivity application suite and Dynamics 365 business applications.

Meanwhile, a look at the latest list of features offered by AWS in South Africa shows that Amazon Managed Blockchain, Machine Learning, and various IoT services are not yet available.

Enterprises use multiple providers

Some businesses use a mix of services from different providers. “Sage has been serving small and medium businesses in Africa and the Middle East for over 20 years, and we have a mix of technologies ranging from traditional desktop to the latest cloud solutions,” said Michelle Bisset, vice president, Customer Success: Sage Africa & Middle East. Sage provides ERP and other business applications, with a focus on small and medium-size enterpirses. “From a hosting point of view, we are standardising on Amazon Web Services (AWS) and Microsoft Azure and we have dedicated Live Services Management (DevOps) and security teams focused on ensuring we have best-of-breed cloud operations,” she explained.

The uptake of enterprise cloud solutions in Africa reflect a keen interest and relatively slow but steady progress. “It is reality that infrastructure problems are holding back cloud usage in many African markets, but senior tech execs are accepting that cloud technology is a necessary ingredient for business growth. Even though African marketplaces are in the early stages of development in terms of the uptake of enterprise cloud solutions, the impact of cloud services is already far-reaching,” said Elaine Wang, the cloud and software solutions director at Rectron. “For the African marketplace, cloud, virtualisation and the broader evolution towards serverless computing are the most disruptive technology developments since the advent of the mobile payment revolution. Cloud technology is seen as the best way to optimise IT costs, speed time to market and grow businesses.” 

In the near-to-mid future, it is clear that cloud will play a crucial role in driving growth, across the technology sector as well as general economic growth, particularly in countries such as South Africa. The entrance of the AWS cloud region in the local market is sure to put pressure on Google Huawei and Oracle to bolster their own presence.

According to World Bank’s 20th Issue of the Africa Pulse report, the IT sector will grow at 1 percent in 2020, in spite of an anticipated decline in sales of devices this year, as well as a general slowdown in the South African economy.

“As businesses start to move workloads into the cloud, their appetite for cloud services increases and this brings about great opportunities for the reseller channel to make money through their service offerings,” said Wang. “We will continue to see growth in SaaS and IaaS workloads. AWS’s recent launch is a positive sign for our region’s ability to grow cloud consumption,” she explained.