According to industry research conducted for the SoftwareOne 2023 cloud report, the cloud computing market in South Africa anticipates a compound annual growth rate (CAGR) of 22.5% between 2022 to 2027. This growth is being driven by the same factors as the global cloud market, such as the increasing adoption of cloud-based applications and services, the need for scalability and agility, and the desire to reduce IT costs. As organisations move through the stages of cloud adoption - from cloud beginner to cloud leader - they will invest less in the cloud, save more money, and generate more revenue, says Marilyn Moodley, SoftwareOne Country Leader and Local Director for South Africa and Africa.

Our report also reveals that tech business leaders currently invest 1.1% of their revenue in the cloud, save 25% on overall business costs, and generate 48% more revenue than cloud beginners. Cloud leaders also benefit from increased scalability, business resilience, agility, market competitiveness, improved decision-making, customer retention, and enhanced reputation. The key to maximising cloud ROI, ultimately, lies in understanding the business case for each workload. By following best practices, cloud beginners can strategically manage their cloud migration and investments to unleash their full cloud potential.

Propelling South Africa’s cloud computing boom

Mid-sized enterprises are playing a major role in the growth of the cloud computing market in South Africa, driven by the desire to improve agility and responsiveness, and reduce IT costs. The local adoption of multi-cloud and hybrid cloud architectures is also on the rise in response to the need for flexibility and scalability that avoids vendor lock-in. Cyber security is a top concern for enterprises pursuing a cloud strategy, indicated by the fact that organisations seek cloud providers that offer powerful security products and services to help mitigate risks.  In addition, these help organisations comply with stringent industry regulations.

Navigating a challenging cloud landscape

The path to becoming a cloud leader for mid-sized enterprises in South Africa is marked by both challenges and opportunities. A significant obstacle is the scarcity of skilled cloud professionals, which hinders organisations' ability to swiftly adopt and manage cloud solutions due to a lack of qualified staff. 

The cost of cloud in South Africa is currently high and more so than in other parts of the world. This is due due to a number of factors such as the high cost of internet bandwidth and the lack of competition in the cloud market. The absence of uniform cloud adoption policies and regulations in South Africa makes it difficult for organisations to understand the legal and regulatory landscape around cloud computing, which complicates industry-specific compliance. Additionally, cloud costs and visibility are significant challenges for businesses on their cloud journey, with only 15% of organisations worldwide having a FinOps capability in play.

Finding potential in the pitfalls

South African businesses can become cloud leaders by adopting key trends that drive efficiency, growth, and innovation. The rise of artificial intelligence (AI) and machine learning (ML) – both largely enabled by the cloud- is profoundly reshaping the market by automating tasks, enhancing decision-making, and thereby boosting efficiency and fostering innovation, ultimately driving business growth. The explosion of the Internet of Things (IoT) is also increasing the demand for cloud computing, as IoT devices generate large amounts of data that can only be analysed and processed in the cloud, to identify and exploit new revenue opportunities.

How can businesses evolve from cloud beginners to cloud leaders?

Organisations will need to develop a cloud strategy that aligns with their business goals, which could mean considering adopting a multi-cloud or hybrid cloud architecture to improve flexibility and scalability. Security must be a top priority when embracing the cloud, and businesses should partner with a cloud provider that can help them implement and manage their cloud solutions, with a view to driving continuous efficiency improvements.

To overcome local challenges and optimise their cloud solutions , mid-sized enterprises will need to apply six best practices, according to SoftwareOne’s 2023 cloud report:

1. Actively manage cloud costs: using practices and tools such as FinOps to create a culture of accountability through visibility and transparency.
2. Focus on business goals: rather than the technology aspect of cloud transformation to ensure that actions achieve desired outcomes. 
3. Take a structured approach: to decisions about shifting and modernising applications, focusing on business imperatives to set the correct priority order.
4. Develop the culture and talent for cloud success: A centre of excellence focused on cloud relies on the right training and advice, ensures proper cloud governance and standard processes, and fosters wide adoption of cloud best practices.
5. Select the right tools and partners: using a variety of cloud service options and bringing in cloud providers, leveraging ‘everything as a service’ to bridge skills gaps.
6. Put cybersecurity at the centre: of cloud migration plans, assessing and improving app security before migration, and ensuring that teams have the necessary cloud security expertise.

Additional tips for businesses setting out to become cloud leaders

• Start small and scale up progressively. There is no need to migrate everything to the cloud all at once. Start with a few key applications and workloads, and then scale up cloud deployments as once teams are comfortable with the technology.
• Use cloud-native applications and services. Cloud-native applications are designed to take advantage of the cloud's scalability, elasticity, and pay-per-use pricing model. Using cloud-native applications from the outset is an effective way to get the most out of cloud investments.
• Automate cloud management. Automating tasks such as provisioning resources, managing security, and monitoring performance can help teams save time and improve efficiency.
• Measure the success of cloud initiatives. It is important to track the progress of cloud initiatives to measure success. This helps to ensure that cloud investments are maximised.