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In the first part of this series, I wrote about how individual
developers in the developing countries are benefiting from cloud computing. In
this post, I am going to make some arguments to highlight how small businesses
in these countries can also benefit from the cloud computing and compete in the
global economy.
Small businesses in the developing countries are faced with various
investment and infrastructure issues. The high cost of hardware and broadband
coupled with the lack of reliable infrastructure pose tremendous hurdles for
small and medium businesses. I can talk about India with confidence as I have
personal experience in the country and I am sure the conditions are almost
similar in other developing nations too. The investment and infrastructural
hurdles made sure that the businesses faced difficulty competing in the current
era of globalization. Not only that, lack of IT resulted in a very inefficient
business process, resulting in a tremendous loss of opportunities for these
businesses.
The problems faced by the businesses in developing countries include
- High cost of software
- Poor power infrastructure
- Unreliable broadband infrastructure
The high cost of OS and productivity apps added severe strain on the
financial health of the businesses in the developing countries. They are either
forced to give up on their plans for a strong IT infrastructure or forced to the
use pirated versions of the software. This puts them in a disadvantaged position
compared to their counterparts in the advanced nations. The unreliable power and
broadband infrastructure ensured that many of the developing nations didn’t have
the opportunity to build world class data centers catering to the local needs.
This situation forced the businesses to look for hosting resources from advanced
nations like US and parts of Europe. The high currency conversion rates of Euro
and Dollar resulted in a higher cost of renting the hosting infrastructure.
Because of this, many businesses are reluctant to adapt web in their business
strategy. In this era of web and beyond, this results in lost opportunities for
businesses in these nations.
Even though power and broadband infrastructure are abysmal in developing
countries, mobile revolution was sweeping through these nations for a long time.
To give a perspective on the unreliable broadband growth in developing nations
and the disruptive mobile revolution, let me offer some statistics. The global
broadband usage has increased from 17 million in 2001 to quarter of a billion
now. Compared to this, India has a meager 2.43 million users by April 2007
(Source: The Financial Express). In Africa, 4 out of every 100 use
internet and it is 1% penetration in the population (Source: BBC
News). Compared to this, the mobile usage in India has grown by 350 million
in 2008 alone and by the end of 2009, 80% of the Indian population will be under
mobile coverage (Source: Reuters). More than 85% of small businesses, surveyed in South
Africa, rely solely on mobile phones for telecommunications. 62% of businesses
in South Africa, and 59% in Egypt, said mobile use was linked to an increase in
profits. 97% of people surveyed in Tanzania said they could access a mobile
phone, while just 28% could access a land line phone. There was a 5000% mobile
growth in Africa between 1998 and 2003. Currently, there are more than 82
million mobile phone users in Africa (Source: BBC
News).
Mobile phones are used by reporters to report news from potentially any
corner of Africa. Mobile financing is the hottest trend in Zimbabwe and few
other Asian and African countries. Money is transferred through SMS at ease.
Countries like Rwanda use mobile extensively in the health care sector. I have
seen many Indian farmers using mobile phone exclusively in their agricultural
trade. It is the same case in many other countries in Asia and Africa too. There
are several other examples of mobile data usage in the developing
economies. In Africa, wireless operators are not only providing an opportunity
for banking and commodity exchange, they are also providing them at a much lower
cost leading to drastic proliferation of mobile data usage. Similarly, in India
the number of mobile data users are four times that of PC based internet users.
In Thailand, mobile TV is being offered by 2.5 G infrastructure. Today, we saw the
release of 3.75 G supported Eee PC from Taiwan. Such netbooks have a good
market in many Asian countries.
The comfort level in the usage of mobile communications in these countries,
combined with the lack of power and broadband infrastructure, offers an unique
opening that cloud computing can fill. The SaaS offerings give businesses in the
developing world a free or low cost alternative to traditional desktop based
productivity applications. They need not buy expensive bloated office suite or
accounting software. There are many SaaS based productivity and accounting apps
that can satisfy their needs. These businesses now have an option to use CRM
applications which were prohibitively expensive in the traditional software
world. By moving their data to the clouds, these businesses are not held hostage
to frequent power failures and broadband disruptions. Their data is always
available for easy access through their mobile devices. With the advent of low
cost smartphones and netbooks with mobile data capabilities, they can now have
an IT infrastructure that can parallel even some bigger companies in the
advanced nations.
Cloud computing is a boon to this world. It offers an opportunity for
individuals and businesses in developing countries to compete with those in
advanced nations on an equal footing. Such an opportunity will create tremendous
growth in these countries and help in our fight against global poverty.
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Computing and Developing Countries – Part 1
Hi Krishnan,
You haven’t addressed the perform concerns raised by one of the comments of the earlier post. Applications hosted on the cloud are indeed slower than the ones hosted on a dedicated server. Normal business apps serving web pagses/process workflow should be ok, but as the applications increase in complexity, from word processor to spreadsheets to drawing, the cloud computing experience is less than optimal. What steps are the cloud vendors taking (if any) to address this problem? (Or should we just wait for the CPU speed/system throughput to increase?)
I do agree that the performance is less than optimal in the case of clouds. However, I haven’t seen any benchmarks that shows a better performance by these applications in the dedicated server environment. Do you have any benchmarks to share?
I have just come back from 3 months in southern Africa, a trip that included the richest (South Africa) and poorest (Madagascar and DR Congo) levels. My trip was to evaluate the operating characteristics of National Standards Bodies as a part of a EuropAid project. NSB develop standards using groups of national experts and also participate in international projects, an activity also based on discussion and consensus across internationally located groups of experts. Amongst the things these organizations need are ways to collaborate electronically, and for that reason I was wondering about collaborating via The Cloud, as on paper it looks ideal. But with the hindsight granted by this project I am of the opinion that right now this is not at all practical. To depend on such ways of operating in the national contexts of (non)availability of public and non-public services lays such organizations open to short- to long-term problems of non-functioning systems. For example in Swaziland ‘broadband’ arrived last year at a level that is way way below (512) anything now ‘normal’ in USA, Europe, etc. In Zimbabwe internet wasn’t function in the NSB for the four days I was there. In Madagascar the NSB had been without electricity for more than a month. And so on. From the comfort of our homes and offices in ‘developed’ countries we know what it is to have “always on” connections, not just to internet but also to basic services, including those that connect us to the web such as electricity and phone lines. We read reports that make – frankly extraordinary and exaggerated – claims about how widely connected is the world. It’s not like that, at least not in a reliable way, and as a result the relevance of “The Cloud” to even the best functioning organizations (and NSB are typically relatively well organized, it’s the nature of their role) is right now close – in my opinion – to zero. It’s not just the connectivity, it’s also basic availability of hardware to connect! So, sadly, Cloud Computing for the developing massed is not just not around the corner, it is a long way down a very long road.
Cloud computing is clearly dependent on internet access. Not necessarily broadband, but at least some internet access. And a couple of years ago it was clearly impractical.
But have things changed now? I was in Rwanda recently and saw a tremendous amount of fiber optic cable being laid.
If we are beginning to see areas in the developing world that have somewhat decent, somewhat dependable internet access, I’d argue that is the perfect time to start experimenting with SaaS as a solution for small/medium sized businesses in those areas, so as access spreads, we have experience under our belts that we can use to expand SaaS as internet access spreads.
From what I am hearing, it is improving at a greater rate than ever before. I do think it is time for them to use SaaS. The key component here is widespread mobile data networks in these countries.