Cloud computing nigeria

BIS4430

CLOUD COMPUTING IN AFRICA

Ogbeleje, Chidube- M00383325

Okereke, Arnold Ikenna- M00369489

Keywords: (cloud computing, ICT, internet-based, organisation)

ABSTRACT

Cloud computing is an internet-based technology which provides virtual computation
services such as software, database access, manipulation and storage services.
Considering the current economic status of the country Nigeria and Africa, we analyze
the impact of gradual introduction of cloud computing by looking at the current factors
and trends of the information technology sector in Africa and Nigeria for the past
decades.

INTRODUCTION

In the past few decades we have witnessed the bubble and burst of the internet age,
which has given rise to e-commerce, social networks, advertisement and internet-based
services. One of these internet-based service is Cloud computing. “The promise of cloud
computing is arguably revolutionizing the IT services world by transforming computing
into a ubiquitous utility”ISACA(2009,Business Benefits With Security, Governance and
Assurance Perspectives, p.4)

Cloud computing is a means of data storage, processing and sharing resources securely
over the internet by both organisations and individuals. This has been embraced by
globally but with little response from Africa.

In accordance to the most current statistics given by the World Economic Forum (2009),
Africa has the least response of 1%.

Graphical survey and statistics of response of organisations and Geographical regions as
seen in World Economic Forum (2009, fig. 1.2)

We cannot fully analyse the factors responsible for the little growth and gradual
emergence of cloud computing into Nigeria and Africa without taking into consideration
the current trend and factors affecting the Information and Communication Technology
sector. In this article we would critically analyse the challenges faced by Information
Technology in Nigeria, as one of the key factors which results to the little response in the
growth of cloud computing in Nigeria and Africa as a whole. our focus would be mainly
on the economy, social awareness and current market analysis of information
technology in relation to cloud computing.

In the next section 2, we would describe the nature of cloud computing and its relation
to information technology, its slight impact to the Nigerian economy and the structure of
the ICT market. “the introduction of cloud computing is going to reduce drastically the
fixed costs of entry and production, turning part of them into variable costs related to the
production necessities.” Etro (2009, pp. 2). As we know cloud computing has a huge
positive impact on the nations that have embraced and accepted its existence, but its

impact has not being felt the underdeveloped and developing nations like Nigeria and
Africa as a whole. As stated by Etro (2009, pp. 2) “This will have a positive impact on
entry and competition in all sectors where fixed ICT spending is crucial”. Nigerians ICT still
needs improvement and infrastructural development, which is would be discussed in
this section.

In section 3 we discuss the factors affecting Africa’s response to cloud computing and
major challenges that the Information and Communication Technology face in Nigeria.
This would be based on some key factors that hinder and affect the ICT sector.

In section 4 we would provide a good statistical market analysis of the information and
communication technology sector through the statistical Correlation and dependence.
These data’s would focus on ICT trends, market trends, population classifications,
market pressure and how it affects Cloud computing.

Section 5 would be our final result and conclusions based on the analysis done in section
4 above.

FEATURES AND IMPLICATIONS OF CLOUD COMPUTING

Cloud computing is an internet-based service that provides information and data
storage, transfer, sharing and manipulation on an online server through the use of
internet. This would have a great positive impact on the customers, business firms and
organisations. On one side customers would be able to transfer, share, store and
manipulate their data and information over an online server through the use of ICT
devices such as laptops, cellphones, touch pads, PDAs e.t.c. On the other hand, cloud
computing reduces greatly the cost of business setup by cutting off cost of computer
hardware(in some cases e.g virtual organization) and company server side development
and setup capital of business startups, existing businesses and organisations.

Computing and server side spaces over the internet would be paid for as utility bills(like
electricity bills, gas bills e.t.c) by business startups and business organisations. “firms
will be able to rent computing power (both hardware and software) and storage from a
service provider and to pay on demand, as they already do for other inputs as energy and
electricity” Etro (2009). According to Armbrust et al. (2009) cited in Etro (2009) this
would have a similar impact to the one that semiconductor foundries had on the

hardware industry. Moreover cloud computing would have cost effective structural
impact on industries using software and hardware and indirectly influence their market
value. But these impacts have not been felt in the African ICT sector due to factors
hindering the growth of information technology, yet plans are still been made to remedy
its current situation.

In preparation to embrace the new internet-based service by Nigeria, Sunnet and IBM
have announced a partnership AYANTOKUN (2011) that will help revolutionize
businesses in Nigeria through cloud computing. This would on one side help end users
to share, modify, store and access all their data from any device via the Internet at a
larger scale (internet scale). This is would also serve as a stepping stone for Nigeria’s
ICT sector into the new IT phenomena (cloud computing), which in would give rise to
several business start-ups and in turn would have a positive impact on its current
economic status.

Another important positive impact of the implementation of cloud computing would be
job creation. This would assist in reducing the rate of unemployment in Nigeria and
hence improve its economy.

EVALUATING THE FACTORS INFLUENCING CLOUD COMPUTING:

METHODOLOGY AND DATA

Our evaluation of the factors affecting cloud computing is based on the economic factors
affecting Information and communication technology in Africa most especially Nigeria.
We emphasis the effects these factors have on the cost structure of companies or
organisations investing in Information and Communication Technology, competitive
advantages and economic pressures.

Our methodology is based on general overview and statistical analysis of Information
and communication Technology trends in Nigeria and Africa the past decade.

In accordance with The Development of an E-Commerce Legal Framework for ECOWAS
report (2005). It is appropriate to evaluate the current status of legal and regulatory
frameworks in West Africa in three inter-related areas – infrastructure, IT generally
(investment, trade, human capacity development, hardware, software), electronic
service delivery (e-commerce and e-government). Here we analyse the individual
components of the frameworks of these inter-related areas.

Infrastructure: looking into the basic physical structure required for information and
communication technology in comparison to that which is in use in Africa, the result is
shocking. “Famous for its common fraud crime, Nigeria is the sixth-biggest supplier of
crude oil on earth and currently one of the fastest growing economies in the world. What
about IT - is it ready for it?” As reported by Porębska(2010). We cannot fully analyse this
without taking into consideration the current ICT infrastructure level in Nigeria

IT general(Information and Communication Technologies): on the telecommunication
policy, reasonable growth has been made within ECOWAS regions. Member states have
begun to libralise telecommunication licensing through independent regulatory bodies
that where formed and this has resulted to significant increase in telecommunication
density in the region. But yet this poses a challenge in terms of lack of skilled
labour.“little or no attention has been devoted to ecommerce and related legislative issues,
perhaps because competencies and accomplishments at the general ICT level are still
being consolidated”. (ECOWAS,2005 pp. 11). There appear to be much constraints
regarding the information and communication technology sector, but there is strong
level of awareness about the strategic importance of this(information and
communication technology) to regional development.

e-commerce: due to the fact that e-commerce is a new phenomenon non of the member
states of ECOWAS have effective policies in place to stimulate its development and
regulate aspects of its use.

Asides these factors listed and explained above there are factors that generally affect
information and communication technology in developing countries such as:

 Broadband usage and penetration

 IT Talent short fall(lack of skilled labour),

 IT general(investments, hardware, software)

 Electrical power generation and consumption

 pricing

 Government (ICT promotion)

IT talent shortfall(lack of skilled labor)
Nigeria has a poor literacy level, looking at the ranking by the World Economic
Forum(2011, 346), nigeria is ranked 121 out of 138 for adult literacy level. This is below
average adult literacy level. Looking into the future of our leaders of tomorrow, the
current quality of nigerias educational system is just above average (World Economic
Forum, 2011, pp.345). These and the poor maths and science education(world
Economic Forum, 2011, pp.344) has accounted for the IT staff shortfall.

IT investment
Looking at the current week state of ICT, Infrastructure and economy in Nigeria,
investors, venture capitalist and people seeking to invest into ICT, must analyse and
look deep into nigerias current economic state before investment is made. These tight
descision making has let to nigerias poor ranking when it comes to ICT venture
capitalists(World Economic Forum, 2011, pp.330)

Power generation:
“Nigeria is still in search of solutions to her power sector challenges” as stated by Abiola
and Adebayo (2011, pp. 1). This has affected startups, companies and foreign investors
wanting to invest in Information and communication Technology. As a result of poor
electrical power generation and supply in the Power sector, companies use generator
sets powered by diesel or fuel as alternative to power supply and generation.

Sources: TradingEconomics.com and *CIA World Factbook (30/12/2010) was based on
(2006 estimate as cited in Abiola and Adebayo (2011, table. 1

The above table illustrates that even in the poor state of power generation a reasonable
amount of electrical power has been lost during distribution.

CRITICAL ANALYSIS OF HOW POWER GENERATION AFFECTS ICT

In accordance with the World Economic Forum (2011) we take tech index as a measure
of ICT and cloud computing readiness. Tech index is a measure of technological
readiness. The technology index is created by comparison of several economic and
(information technology factors and indicators (World Economic Forum, 2011
Here we analyse critically how power generation and consumption affects ICT in Nigeria
and other African countries in comparison with other foreign countries through the use
.of statistical regression analysis of Correlation and dependence of the variables

tech index internet speed Kwh per population kwh country
Mbps person
5.33 12.37 12615.36602 307,006,550 3,873,000,000,00 USA
0
5.3 7.33 2568.931693 1,338,299,50 3,438,000,000,00 CHINA
0 0
4.95 14.5 6735.95058 127,450,460 858,500,000,000 JAPAN
5.14 15.22 6698.707451 81,702,329 547,300,000,000 GERMANY
5.21 12.29 15717.37365 34,108,752 536,100,000,000 CANADA
4.92 13.15 6893.084347 64,876,618 447,200,000,000 FRANCE
3.9 5.97 2063.130458 194,946,470 402,200,000,000 BRAZIL
5.12 11.71 5557.809163 62,218,761 345,800,000,000 UK
3.97 4.86 5208.030134 60,483,521 315,000,000,000 ITALY
3.86 3.09 4828.840218 49,991,300 241,400,000,000 SOUTH
AFRICA
3.32 2.61 121.2575079 158,423,180 19,210,000,000 NIGERIA
3.44 9.69 283.1276695 24,391,823 6,906,000,000 GHANA
(SOURCES: National master- www.nationmaster.com (accessed 2011
(Net index- www.netindex.com ( accessed 2011
(World Economic Forum (2011

(SOURCES: National master- www.nationmaster.com (accessed 2011
(Net index- www.netindex.com ( accessed 2011
(World Economic Forum(2011

The statistical correlation coefficient ρX,Y(R) between two random variable X(power
generation kwh per person) and Y(Technology index) with mean values μX and μY and
standard diveation σX and σY is defined as:

where E is the Expected value operator, cov means covarrance, and, corr a widely used
alternative notation for Pearson's correlation.
ρX,Y is between +1(positive dependency) to -1(negative dependency)

From our scatter graph and table we deduced ρX,Y(R) = +0.690295188
This is a positive correlation and hence proves that power generation per person in a
country is a factor that affects ICT

The poor power generation and distribution in the power sector has not only affected
the economic growth but also the cost of production of Information and Communication
Technology due to increase in cost of production of Information and Communication
Technology. This has in turn affected the end-users of the ICT through inflation of ICT
service charge to meet the cost of production by the ICT suppliers.

Pricing: due to poor infrastructure and power supply, Nigeria exports raw and semi
processed materials while importing lots of high-processed ones. Poor infrastructure
and power supply is poses a serious challenge to national growth. nevertheless
companies have adapted a “do it you self” approach to reaching their goals. For example
shell established its own data and communication network between Lagos, port
Harcourt and Warri by leasing facilities from the nation's Nigeria Telecommunications
Co. (NITEL) and Nigerian National Petroleum Corporation (NNPC) created a private
telecommunication network said to be today the largest in Africa (the network of 875
km of optical fiber cables). As reported by Porębska (2010). This results in high price of
user end products

ANALYSIS OF HOW BROADBAND PENITRATION, INTERNET USAGE AND
INTERNET SPEED

Cloud computing requires real-time client-server interaction with high band width and
.stable connection, which is not yet achievable in Africa most esspecialy Nigeria
Africa constitutes a small percentage of the amount of internet users in the world.
Nigeria being the country in Africa

based upon statistics gotten from fig 4 above we got a scatter graph illustrating hoe
internet speed affects technology index and we got a positive correlation

(where statistical correlation coefficient ρX,Y(R
X= internet speed Mbps
Y=Technology index
mean values μX and μY and standard diveation σX and σY
ρX,Y(R) = +0.741347492
.hence internet speed is a positive dependency of technology index

Conclusion

Based upon analysis made above Africa has apoor ICT foundation and some factors
inhibiting the growth of ICT. These factor should be taking into consideration by
any organization wating to venture into ICT in Nigeria.

Cloud computing is a wonderful technology that would help develope and enhance the
ICT sector of the African economy but as long as these factors are taken into
consideration in Africa, the success rates are promising.

Reference
• Abiola and Adebayo (2011) Towards a public Private Patnership in Nigeria
power sector: Challenges and Prospects

• Ayantokun(2011)Sunnet, IBM partner to deliver cloud computing in Nigeria.
Nigerian Tribune, 16th Aug.

• Armburst et al (2009) cited in Etro (2009) ‘the Economic Impact of Cloud
Computing on Bussiness creation, Employment and Output in Europe’, Review of
Bussiness & Economics, pp. 180-205

• Etro (2009) ‘the Economic Impact of Cloud Computing on Bussiness creation,
Employment and Output in Europe’, Review of Bussiness & Economics, pp. 180-
205

• Internet World Stats(2011) Internet World Statistics[online] 21 Sep Available
from: http://www.internetworldstats.com/stats.htm [accessed 10 Dec 2011]

• ISACA(2009)Business Benefits With Security, Governance an Assurance, pp.4

• Nation Master.com(2011) Internet statistics[online] available
from:http://www.nationmaster.com/graph/ene_ele_con-energy-electricity-
consumption[accessed 10 Dec 2011]

• Net index(2011) [online] available from:
http://www.netindex.com/download/allcountries/ [accessed 10 Dec 2011]

• Porębska (2010)Doing IT in Nigeria[online] Available from:
http://datapoint.pl/pl,news,show,23 [accessed 8 Dec 2011]

• World Economic Forum(2011) The Global Information Technology report 2010-
2011(10th ed) Switzerland

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