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[Africa Cloud Review] Simon Ngunjiri: Businesses in Africa are increasing their cloud spending in 2021


In our previous Africa Cloud Review article, we highlighted how Cloud is driving change and accelerating digital transformation across multiple industries across the continent. 

This comes at a time when cloud spending among businesses continues to grow. In fact, according to data presented by TradingPlatforms.com, global public IT cloud services market revenue for 2020 was at $312.4B – a 34% Increase from 2019.

In 2016, global spending on public IT cloud services was just under $100B. In 2021 that figure has ballooned to a healthy $312.4B after experiencing a 34% increase from 2019’s $233.4B revenue. In the 4 year period from 2016-2020 the data reveals that revenue from spending on cloud services grew at an impressive compound annual growth rate (CAGR) of 36.31%.

In countries like Kenya, businesses are also increasing their cloud expenditure. The “Africa in the Cloud 2020” study by World Wide Worx conducted among eight African countries released in November last year noted that Kenyan firms are set to increase their expenditure on cloud computing services by 68 per cent in 2021 up from 38 per cent in 2020. 63% of the companies interviewed in the study indicated their top reasons for cloud adoption as driving business efficiency followed by operational flexibility and customer service which averaged at 53 per cent and 45 per cent respectively.

Of the three main types of cloud services, the TradingPlatforms.com data shows that Software as a Service (SaaS) still accounts for the largest share of total revenue with a 63% share. In 2020 SaaS revenue amounted to $197.6B which is a 33% increase from 2019’s $148.5. S From 2016-2020 SaaS revenue grew at a CAGR of 34.1%.

In countries like South Africa, 51% of the public sector segment are already using cloud in production. This is according to a recent survey conducted by ITWeb and AWS on the state of cloud adoption in South Africa.

The future is in the cloud

As Patrick Ndegwa, the Business Sales Lead for SEACOM East Africa, cloud adoption is becoming increasingly important for both innovation and operational continuity.

‘’Businesses can take advantage of cloud-based applications or hosted servers for enhanced mobility, or enable remote teams to connect with each other more effectively through cloud communications. ‘’ Ndegwa says in an article published on Africa Business Communities. 

The best way for businesses to take advantage of cloud is by partnering with a reliable cloud and connectivity provider that can offer high-quality and scalable services to meet their unique business requirements.

Simon Ngunjiri Muraya is Google Cloud Architect at Incentro Africa.

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