Cloud Computing in the Developing World

Carl Eschenbach, a Partner at Sequoia Capital and former President of VMware, discussed the evolution of cloud computing during last Friday’s lecture. One particular aspect of cloud computing that Eschenbach touched on, that I’d like to expand upon in this blog post, was the effect of cloud computing in the developing world. For countries that struggle to provide their citizens with basic necessities, cloud computing may seem like an improvident investment when there are more pressing demands on the treasury. However, case studies have shown that cloud computing is a catalyst for creating jobs and encouraging financial independence.

What used to be a major shortcoming in the developing world is now one its biggest advantages: the lack of existing IT infrastructure. It’s much easier for companies in emerging markets to transition to cloud computing resources as they aren’t burdened by the large IT capital investments and conversion expenditures holding “western” corporations back from making a quick transition to the cloud. The New York Times cites an African startup using cloud computing to accelerate their growth in the used car market as an example of the benefits cloud computing in developing areas. Cheki, a used car classifieds business, was founded by a Kenyan expat living in Japan to make the process of buying and selling cars easier and more accessible to the burgeoning African middle class. Carey Eaton, founder of Cheki, witnessed the explosive growth brought on by the advent of the Internet and cloud computing in Japan, so decided to take his novel idea back to Africa, where online business was still a nascent industry. Cheki now has over a billion pageviews per month with millions of users spread across eight African countries. Additionally, most of its users access the website using Android-based smart phones. As cheap, Chinese manufactured smartphones continue to flood the African market, websites like Cheki will become more easily accessible, thereby fueling their continued growth.

In a 2015 article, IBM cites another major benefit of cloud computing in emerging markets: the ability to the rapidly develop and deploy new product and services. Unreliable electric grids, network connectivity (and accessibility), political turmoil, and insufficient access to affordable hosting environments make it challenging for entrepreneurs in these areas to quickly bring new e-products to market. But the ability to rapidly modify products to cater to changing market dynamics allows entrepreneurs from developing nations to compete on a global stage. Furthermore, the rate of change is much quicker in developing markets with large populations—being bogged down by the old IT infrastructure still widely used in the “Western World” would make it increasingly difficult to provide an effective service or product. “In a non-cloud world, there would be sunk costs that would slow down a startup’s ability to adapt or change, but with cloud, many of these considerations are abstracted away,” says IBM.

Cloud computing is allowing developing nations to catch up to their developed peers. Paired with more widespread access to mobile phones (the figure below, from Cisco’s Cloud Global Index, shows the largest improvements in mobile latency since 2014 have occurred in the Middle East and Africa), the potential of cloud computing to impact and improve the lives of billions is endless.

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