Prospects, Challenges and
Impacts of the Cloud:
Perspectives from (South) Africa
Presentation to UNCTAD workshop on Cloud Economy, Geneva, February, 2013
Alison Gillwald, Research ICT Africa
University of Cape Town, GSB, Management of Infrastructure Reform & Regulation
With Mpho Moyo, Research ICT Africa, Cape Town, South Africa.
1
Thursday, 7 March 13
ICT ecosystem
1
SA ICT Landscape
12
SA cloud economy - benefits & risks
Risks
Bottlenecks
3
34
Bottlenecks
Use this area to provide an optional section subtitle or explanation
2
Thursday, 7 March 13
ICT Ecosystem
Integrated perspective of markets, networks, services,
services, applications and content and determining
governance, legal and regulatory frameworks
Global/regional Governance
ITU, ICANN, WTO
n
at
io
ov
en
m
In
n
oy
Services
Institutional
Arrangements
(NRA, CC, USF)
Apps
Content
H
en
t
t
en
tm
es
Policy & Legal
Framework
m
op
el
ev s)
D ki l l
an (e-s
um
Networks
In
v
Market Structure
(competitiveness)
t
CLOUD
Affordability
Users
Consumers
Citizens
Access
Multilateral Agencies
(WB, AfDB, International Donors
pl
Em
Global players and associations
Google, Facebook, GSMA
National/industry formations
(unions, industry associations, NGOs)
State
Constitution
Adapted from Gillwald (2012)
3
Thursday, 7 March 13
decisions need to be made regarding hardware, operating system, payment facilities and distribu
these describe an m-app ecosystem where developers and customers meet. The general
es prices for mobile voice, text (SMS) and data, as well as handset prices and availability (Figure
emUp
is a to
substructure
developers, generally
hardware manufactures,
andthe
payment syste
a two linking
line subtitle,
used to distribution
describe
uretakeaway
6).
for the slide
Mobile/wireless app ecosystem
Figure 5: Mobile Application Ecosystem
4
layed in Figure 6 that allows the classification and analysis of m-app ecosystems. The analysis beg
Thursday, 7 March 13
M-apps ecosystem
Mobile Operating Systems such as iOS include an application programming interface (API), which is a software specification
used as an interface between different software components. For example, the latest version of the Android OS, Jellybean,
provides several public APIs that allows developers to integrate their applications with the OS.
Platforms allow other software to be built on top. Examples of platforms include Facebook and emerging market social
networking platforms such as Mxit in South Africa. A platform provides uniform standards and payment mechanisms - these
standards are used by developers to develop and sell applications. A platform sits on top of an operating system.
Mobile Applications run on mobile phones, either on the operating system or on a platform such as Mxit or Facebook, that
themselves run on an operating system like iOS, Android or Symbian OS.
iOS
5
Thursday, 7 March 13
Figure 6: Conceptual framework for business modeling
ICT ecosystem
1
SA ICT landscape
2
3
SA cloud economy
Bottlenecks
Bottlenecks
Use this area to provide an optional section subtitle or explanation
4
5
6
Thursday, 7 March 13
Department of Communications, which is responsible for locating its licence in the liberalised competitive market
into which it is being inserted, it could not keep the interest of its target clients. The delays to the much awaited low
cost access network resulted in MTN, Neotel and Vodacom co-building an alternative national infrastructure
network, undermining the viability of their business model. They also face competition from Dark Fibre Africa who
has installed a carrier neutral, open access ducting infrastructure in South Africa. Through this underground
infrastructure any operator with a communications license can run a fibre optics network.
South Africa ICT market
•
•
•
•
Some provincial governments such as Gauteng and the Western Cape have instituted broadband plans and
government e-services, as have their major cities, Johannesburg and Cape Town. Ethekwini municipality in KwaZulu
Natal has also proceeded with metropolitan networks and services. The result has been significant duplication in
areasnetwork
where multiple
cables (including
non-licensed
Twometropolitan
fixed fixed
operators
+ state
cable company Dark Fibre Africa) have been laid, some
Vodacom
MTN
Cell C
8ta
owned
broadband
company
duplication on the main intercity routes, and very little extension of
the network off the main routes to smaller towns and villages.
Three mobile operators building competing
The mobile market has four mobile operators and one MNVO but
backbones
is dominated by the two incumbents,MTN and Vodacom, who
jointly command a market share of more than 80%. Cell C has
successfully
established
itself in providers
a niche market
segment by
5 first
tier Internet
access
with
targeting lower-income subscribers and more recently adopted a
hundreds
of ISPpricing
(ICT)
and and
electronics
more aggressive
strategy
tried to erodesector
the share of
the incumbents’
contract
In 2006, Cell C entered
comprises
more
thanmarket.
300 companies
and ininto a
partnership with Virgin as a virtual mobile operator. Virgin has
2001
was ranked 22nd in total worldwide IT
focused its efforts on the high-end youth market, hoping to
spend.
capitalise on its brand positioning internationally. Even after
several years of operation, Cell C and the virtual mobile operator
have(SABC)
only managed
to secure
than 15% ofand
the market.
OneVirgin
PBS
with
threeless
channels
(Gillwald et al. 2012)
12 language radio stations (12 million+
In 2009, Telkom sold its share of Vodacom. Before the Vodafone
listeners)
transaction, the South African government owned 37.7% of
•
Telkom, which in turn owned 50% of Vodacom. The government
has a 14% direct
shareholding in Vodacom (Vodacom Annual
Onenow
Free-to-Air
(e-TV)
Report, 2009). Having sold its share in the dominant operator, in
•
One Africa wide DTH subscription (DSTV
32,9%
14,0%
1,8%
51,3%
Figure 1: South African mobile operators market
share based on reported number of subscribers
(SIMS sold)
Sources: Vodacom, Integrated report for the year ended
31 March 2012. MTN, Integrated Business Report for the
year ended 31 December 2011. Cell C, ITWeb July 2012.
8ta, author’s calculations.
3
As part of this agreement Infraco, which will remain wholly owned by the state in terms of the broadband Infraco Act, was to
provide wholesale bandwidth exclusively to Neotel, selling it on a cost-plus basis for its first three years. .
Thursday, 7 March 13
7
Concentration of State ownership
Up to a two line subtitle, generally used to describe the
takeaway for the slide
8
Thursday, 7 March 13
Title - Top
IDI: Three stages in the
evolution towards an
information-society:
1. ICT Readiness
(infrastructure, access)
2. ICT Use (intensity)
3. ICT Capability (Skills)
SOUTH AFRICA
2002 rank 77th
2005: rank 91st
2007: rank 91st
2008: rank 92nd
2010: rank 90th
9
Thursday, 7 March 13
(WEF)
Network
e-Readiness
Index
South Africa stable at 61st place (138
participating countries)
Fallen from 34th in 2004, 37th in 2005,
47th in 2006, 51st in 2007, 52nd in 2008.
Gained only a position from 2009, when it
ranked 62nd
It is only ranked 95 in terms of usage
component
Major barriers to market growth:
Lack of competitive or affordable
backbone infrastructure/ bandwidth
High costs of access to communications
Effective regulation
Thursday, 7 March 13
Share of those with a mobile that
own one that is capable of browsing
the Internet
15+ Owning a mobile
South Africa
84%
Botswana
80%
Kenya
74%
Nigeria
66%
Ghana
60%
Namibia
56%
Uganda
47%
Cameroon
45%
Tanzania
Rwanda
Ethiopia
Thursday, 7 March 13
36%
24%
18%
South Africa
51%
Kenya
32%
Namibia
31%
Botswana
30%
Ghana
29%
Nigeria
23%
Tanzania
19%
Rwanda
19%
Uganda
15%
Cameroon
15%
Ethiopia
7%
2007/8
Ethiopia
1%
Tanzania
2%
Rwanda
2%
Uganda
2%
Ghana
3%
6%
8%
6%
13%
13%
9%
18%
Kenya
South Africa
Thursday, 7 March 13
14%
16%
Nigeria
Botswana
Internet
use (15+)
more than
doubled
within 4
years
4%
Cameroon
Namibia
2011/12
15%
6%
26%
29%
15%
34%
Using mobile to browse the Internet
South Africa
Kenya
Namibia
Botswana
Nigeria
Rwanda
Ghana
Cameroon
Uganda
Tanzania
Ethiopia
28%
25%
24%
23%
16%
15%
13%
8%
8%
5%
5%
Output
Using mobile for Facebook etc.
South Africa
Kenya
Botswana
Namibia
Nigeria
Rwanda
Ghana
Cameroon
Uganda
Tanzania
Ethiopia
Thursday, 7 March 13
Internet use among
mobile phone owners:
Social networking more
popular than email in
some countries
25%
25%
18%
17%
16%
14%
11%
8%
7%
5%
2%
Using mobile for emailing
South Africa
Kenya
Botswana
Namibia
Nigeria
Rwanda
Ghana
Cameroon
Uganda
Tanzania
Ethiopia
17%
20%
17%
12%
15%
13%
10%
4%
6%
5%
10%
Households with Internet connection
South Africa
Kenya
Namibia
Botswana
Nigeria
Ghana
Cameroon
Uganda
Tanzania
Rwanda
Ethiopia
Individuals 15+ using the Internet
19.7%
12.7%
11.5%
8.6%
3.4%
2.7%
1.3%
0.9%
0.8%
0.7%
0.5%
Where was the Internet used first?
Cameroon
Rwanda
Botswana
Ghana
Kenya
South Africa
Namibia
Tanzania
Nigeria
Ethiopia
Uganda
Thursday, 7 March 13
South Africa
Botswana
Kenya
Nigeria
Namibia
Cameroon
Ghana
Uganda
Rwanda
Tanzania
Ethiopia
Computer
34%
29%
26%
18%
16%
14%
13%
8%
6%
4%
3%
Mobile phone
82%
18%
71%
29%
71%
29%
71%
30%
69%
31%
65%
35%
50%
50%
46%
54%
45%
55%
33%
67%
28%
72%
Where did you use the Internet in the last 12
months
Mobile phone
Work
Place of education
Internet cafe
74%
20%
29%
31%
17%
75%
75%
78%
81%
81%
87%
Uganda
Namibia
48%
Ethiopia
55%
Kenya
61%
21%
Nigeria
71%
39%
42%
36%
Tanzania
64%
71%
Rwanda
20%
10%
24%
45%
36%
23%
51%
45%
52%
51%
35%
31%
21%
Ghana
80%
32%
33%
72%
63%
South Africa
51%
50%
58%
Botswana
85%
Cameroon
30%
Thursday, 7 March 13
Internet Access Models
Thursday, 7 March 13
Old Internet
New Internet
Hardware
Computer / Laptop
Mobile
Billing
Postpaid (monthly Internet
subscription)
Prepaid
Skill requirement
High
(Windows + Internet explorer +
Viruses)
Low
Electricity
electricity mostly required at
location of Internet use
no required at home
Location
Work, school, Internet cafe
Anywhere
Internet going mobile
The mobile is closing the voice and the data gap in Africa
First wave of Internet access through PCs and fixed-line /modem dial-up. Mostly
through work, school or public access (Internet cafes)
Second wave is through mobile phones
Easier to use
Cheaper equipment compared to computers
Prepaid (modem dial-up was postpaid)
No electricity at home needed
Internet enabled mobile phones, low bandwidth applications, and social
networking are the key drivers
Mobile Internet reduces the cost of communication: Facebook Zero, whatsapp,
Mixit
Thursday, 7 March 13
ICT ecosystem
1
SA ICT landscape
2
3
SA cloud economy
Bottlenecks
4
Bottlenecks
5
Use this area to provide an optional section subtitle or explanation
18
Thursday, 7 March 13
Cloud considerations in developing
countries
Large corporate enterprises earlier adopters of cloud
computing greatest beneficiaries arguably exist for SME and
the public sector who historically not invested as intensively
in IT infrastructure and services and by moving onto the
cloud can enjoy the cost benefits associated with the
economies of scale offered by the cloud at a fraction of the
cost of having invested in the physical network and services
Benefits
‣ Cloud services eliminate the operational
complexity and cost of installing
maintaining and upgrading complex IT
systems in the users own environment
‣ SME/public sector particular benefits of
turnkey IT solution and fraction of the
price
‣ Security - greater reliability/redundancy
Risks
‣ Security/trust
‣ SME lock-into proprietorial
systems
‣ Loss of control of strategic/critical
‣ SME lock-into proprietorial
systems
‣ Squeeze out local developers/
entrepreneurs investors
19
Thursday, 7 March 13
Cloud services offerings in SA
First three established, fourth challenged conceptually
IaaS
‣ AWS’s virtual servers
global leaders in the IaaS
field.
‣ South Africa AWS
competes against local
providers such as Telkom,
Internet Solutions and
MTN Solutions.
‣ Hosting and data centre
providers believe that
hosting and co-location
services as part of
infrastructure as service
offerings.
Thursday, 7 March 13
PaaS
‣ Microsoft’s Windows
Azure platform largest
share of SA market but
Google’s App Engine
‣ Competitiveness
dependent on richness of
the ecosystem of
applications that leverage
a common frameworks
and interfaces.
‣ Monetize the services by
charging developers to
use the underlying
processing power,
storage and network
capacity, billing, SLA but
differentiate on unique
attributes, efficiency of
application
SaaS
‣ Software as service
providers such as
Salesforce.com create
third party application
markets to enhance their
server offering.
‣ Provides CRM and related
cloud computing
application solutions
development tools for the
business web.
‣ Applications and content
services, include Google
Apps and Microsoft
Office, offer productivity
services, e-mail, customer
relationship management
CRM and Enterprise
Resource Planning via the
Cloud.
CaaS
‣ Content shift to cloud
provides major services
for individual users
‣ while shift from buying
digital content (primarily
music and video) to
subscribing to services is
quite comfortable for
users the business
models is not so clear
‣ content providers able to
command less for the
actual content and need
to look for other revenue
streams.
‣ mobile wireless devices
offer an array of services
and considerably more
potentially, without cable
entertainment is more
20
Integration as a service
This is a delivery model in which functionality of system
integration is put it into the cloud, providing data transport
between enterprise wide systems and third parties
(suppliers and other trading partners) on-demand. South
African based cloud aggregator, Pamoja seeks to provide
integration services between different cloud providers based
on open application programme interfaces (APIs). This
model is expected to allow greater flexibility than closed
proprietor cloud computing services as companies have the
liberty to select different cloud service from multiple cloud
providers and that best meet their specifications and at the
best price.
21
Thursday, 7 March 13
‣ Enterprises
‣
Some companies have migrated onto the cloud mostly onto the private cloud as
companies still have security concerns about moving on the public cloud.
‣
Out of 100 large JSE-listed corporations interviewed by World Wide Worx M 46% are
already using cloud computing. Cloud providers believe that the significant benefits, and
security and privacy improvements from the public cloud will help migrate customers
there in time.
‣
However, even with these obvious advantages some large enterprises are constrained
by Cloud providers believe that the significant benefits, and security and privacy
improvements from the public cloud will help migrate customers there in time.
‣
Even with these obvious advantages some large enterprises are constrained by
governance rules that prevent them from moving some of their applications into the
public cloud as the location of the servers is unknown as required by law or company
policy (Microsoft South Africa, Interviewed 29 June 2012).
22
Thursday, 7 March 13
SME
‣ Most to gain from the associated economies of scale
at a fraction of the price of investing in such
infrastructure and services
‣ High cost of bandwidth and absence of long
standing trust relationships have inhibited SME take
up
‣ Estimated that by 2011, only 9% of SMEs made use
of the cloud, according to World Wide Works.
‣ Microsoft offering start-ups free cloud services on
their platform as part of innovation entrepreneurialism
support programme -USD 60,000 of free cloud
computing over a two-year period.
23
Thursday, 7 March 13
ICT ecosystem
SA ICT landscape
SA cloud economy
Bottlenecks
Bottlenecks
Use this area to provide an optional section subtitle or explanation
1
2
3
4
5
24
Thursday, 7 March 13
International bandwidth no longer a problem... electricity and backhaul national networks are....
HH connected to main electricity grid
South Africa
89%
Ghana
South Africa
18.0%
Botswana
15.0%
Cameroon
65%
Namibia
Botswana
60%
Ethiopia
Kenya
60%
Cameroon
2.2%
Nigeria
58%
Ghana
1.8%
Uganda
1.5%
Namibia
42%
11.5%
4.0%
Tanzania
19%
Kenya
0.6%
Ethiopia
18%
Tanzania
0.4%
Rwanda
16%
Nigeria
0.3%
Uganda
13%
Rwanda
0.2%
Country
ISP
Technology
Product
name
India
MTNL
ADSL
TriB 49
2 Mbps
200 MB
0.88
Sri Lanka
SLT
ADSL
Entrée
2 Mbps
2.5 GB
3.78
Mexico
Cablevision
Cable
Intense 3.0
Mbps
3 Mbps
South Africa
MWEB
ADSL
Capped ADSL
384 Kbps
Kenya
TelkomKenya
ADSL
Surf and Talk
Cameroon
Ringo
Fibre
Fibre Ringo
Uganda
Uganda Telecom
ADSL
Thursday, 7 March 13
73%
HH with landline
Downstream Usage Monthly
bandwidth
cap cost (US$)
Notes
Speed reduces to 512Kbps after exceeding the usage cap + Additional charge
INR1.00 per MB after exceeding usage cap
10.56
Installation charge for the internet only package is taken as the connection
charge
17.55
Modem cost from ZAR 369 onwards, excludes voice line rentals.
256 Kbps
34.99
The cost of Livebox+Panasonic Handset is taken as the modem cost
1 Mbps
47.29
XAF95000 is the charge for equipment and installation cost.
64 Kbps
90
1 GB
Fixed line prices Africa
Monthly#Fixed#line#rental#(in#USD)#
Gabon#(Gabon#Telecom)#
Gabon#(Gabon#Telecom)#
Lesotho#(Econet#Telecom#Lesotho)#
Lesotho#(Econet#Telecom#Lesotho)#
South#Africa#(Telkom#SA)#
Ascension#Island#(Cable#&#Wireless)#
Lesotho#(Econet#Telecom#Lesotho)#
Gabon#(Gabon#Telecom)#
South#Africa#(Telkom#SA)#
Oman#(Omantel)#
Morocco#(Maroc#Telecom)#
South#Africa#(Telkom#SA)#
Lesotho#(Econet#Telecom#Lesotho)#
Oman#(Omantel)#
Saudi#Arabia#(STC)#
Lesotho#(Econet#Telecom#Lesotho)#
Botswana#(BTC)#
Lebanon#(Ministry#of#TelecommunicaHon)#
Jordan#(Orange)#
Mozambique#(TDM)#
Saint##Helena#(Cable#&##Wireless)#
Seychelles#(Cable#&#Wireless#Seychelles##Limited)#
Niger#(Sonitel)#
Sao#Tome#and#Principe#(CST)#
Burkina#Faso#(Onatel)#
Cape#Verde#(CV##Telecom)#
Nigeria#(Nitel)#
UAE#(Emirates#TelecommunicaHons#CorporaHon)#
Swaziland#(Swazi#Telecom)#
Swaziland#(Swazi#Telecom)#
Tanzania#(TTCL)#
Bahrain##(Bahrain#Telecom#(BATELCO))#
Tunisia#(Tunisie#Telecom)#
Sudan#(Sudatel)#
Ethiopia#(ETC)#
Egypt#(Telecom#Egypt)#
0,00#
Thursday, 7 March 13
Gabon#(Gabon#Telecom)#
Gabon#(Gabon#Telecom)#
Lesotho#(Econet#Telecom#Lesotho)#
Lesotho#(Econet#Telecom#Lesotho)#
South#Africa#(Telkom#SA)#
Ascension#Island#(Cable#&#Wireless)#
Lesotho#(Econet#Telecom#Lesotho)#
Gabon#(Gabon#Telecom)#
South#Africa#(Telkom#SA)#
Oman#(Omantel)#
Morocco#(Maroc#Telecom)#
South#Africa#(Telkom#SA)#
Lesotho#(Econet#Telecom#Lesotho)#
Oman#(Omantel)#
Saudi#Arabia#(STC)#
Lesotho#(Econet#Telecom#Lesotho)#
Botswana#(BTC)#
Lebanon#(Ministry#of#TelecommunicaEon)#
Jordan#(Orange)#
Mozambique#(TDM)#
Saint##Helena#(Cable#&##Wireless)#
Seychelles#(Cable#&#Wireless#Seychelles##Limited)#
Niger#(Sonitel)#
Sao#Tome#and#Principe#(CST)#
Burkina#Faso#(Onatel)#
Cape#Verde#(CV##Telecom)#
Nigeria#(Nitel)#
UAE#(Emirates#TelecommunicaEons#CorporaEon)#
Swaziland#(Swazi#Telecom)#
Swaziland#(Swazi#Telecom)#
Tanzania#(TTCL)#
Bahrain##(Bahrain#Telecom#(BATELCO))#
Tunisia#(Tunisie#Telecom)#
Sudan#(Sudatel)#
Ethiopia#(ETC)#
Egypt#(Telecom#Egypt)#
0,00#
10,00#
20,00#
30,00#
40,00#
50,00#
60,00#
Unlimited#local#and#long#
distance#calls#at#no#charge#
0,05#
0,10#
0,15#
0,20#
0,25#
Leased lines
Na#onal'leased'lines'basket,'34'mbps'
Mexico!
Korea!
South!Africa!!
Ireland!
Canada!
United!Kingdom!
Portugal!
France!
Japan!
Italy!
Turkey!
Greece!
United!States!
Austria!
Belgium!
Germany!
Australia!
Denmark!
Luxembourg!
Norway!
Iceland!
Leased&Lines&Pricing&Trends&
34"mbit/s"(Rands)"
140"000"
120"000"
100"000"
80"000"
60"000"
40"000"
20"000"
!"!!!!
!5!000!!
!10!000!!
!15!000!!
!20!000!!
!25!000!!
0"
2005"
Thursday, 7 March 13
2"mbit/s"(Rands)"
2007"
2008"
2009"
2010"
2012"
Broadband Pricing
Comparison OECD/SA Broadband subscription price ranges, Sept. 2010 (SA July 2011), all
platforms, logarithmic scale, including line charge (or 3G modem), USD PPP
Thursday, 7 March 13
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Thursday, February 21, 2013
ISPs call for Telkom price cuts
Up
to a two line subtitle, generally used to describe the
Industry association wants wholesale access charges reduced again to
takeaway
for the slide
ensure fixed-­line broadband remains competitive next to mobile
alternatives.
Added by Editor on 20 February 2013.
Saved under News, Top
Tags: Ispa, Marc Furman, Telkom
5
Tweet
5
4
Like
Bottleneck: Broadband
interconnect
The Internet Service Providers’ Association (Ispa) has called for further reductions in the fees
Telkom charges ISPs for access to its fixed-­line broadband network.
The fees, known as Internet Protocol Connect (IPC) charges, were reduced by 30% in 2012,
prompting a wave of price cuts to consumers.
“Further reductions in IPC prices are required urgently to keep fixed-­line connectivity
Thursday, 7 March 13
Connect with TechCentral
Follow TechCentral o n Twitter
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29
Bottleneck: Quality of Service
Thursday, 7 March 13
Bottleneck: Computer ownership
•
31
Thursday, 7 March 13
Legal protections/constraints
‣ Protection of Private Information Bill
•
Prohibits the transfer of personal information to a foreign
entity unless the recipient of the information is subject to
a law or agreement which upholds similar information
protection principles or the data subject consents to the
transfer.
•
Makes it difficult for local cloud service developers to
compete/achieving economies of scale of global or
trans-border players.
32
Thursday, 7 March 13
Bottleneck summary
‣ Regulatory uncertainty & lack of effective
competition
‣ Institutional capacity/competencies
‣ Demand stimulation: e-literacy
‣ (International bandwidth) National backbone
backhaul network capacity
‣ Open systems/interoperability
‣ Consumer protection
‣ Security & trust
‣ Taxation
Thursday, 7 March 13
33