Report estimates that the Nigeria Cloud hosting market is worth between $100m – $450m (approximately NGN50bn – NGN200bn), but there is a problem.
The Managing Director of Cloudflex, a leading local Cloud hosting company in Nigeria, Mr. Aderemi Adejumo, has identified that major beneficiaries, accounting for 95% market spent in Nigeria’s cloud hosting market, are actually foreign hosting companies.
Mr. Adejumo, an expert in the field with over three decades experience, made the remark while speaking at the recent Nigerian information Technology Reporters Association – NITRA Technology Forum held in Lagos, on the theme: Achieving 30% growth in Local Cloud Hosting by 2024.
By implication, about 95% of the N200billion market valuation is with the Hyperscalers, (AWS, Azure & Google Cloud Platforms), outside the shores of Nigeria and public sector organisations are the most culpable.
Yes, earlier statement accredited to the Director General of the National Information Technology Development Agency (NITDA) hints that over 90% of Ministries, Departments and Agencies (MDAs) data hosted abroad have been repatriated by the Federal Government.
Adejumo quoted ResearchAndMarkets.com’s report which shows that Africa’s cloud market increased to $1.7billion in year 2020 and growing fast with South Africa, Kenya and Nigeria as the major cloud hubs on the Continent.
How to bring the funds home:
The Cloudflex MD argued that the Central Bank of Nigeria (CBN) has major role to play in ensuring that most data hosted abroad are repatriate in-country by “having as part of its licensing agreement a commitment from the licensee that they will be hosted in Nigeria”.
“NAICOM and PenCom can also play their part to ensure the organisations they regulate do not host their data outside of Nigeria”.
“There are three important definitions about data: Data Residency – where the business defines where its data is located; Data Sovereignty – country law where the data resides; and Data Localisation – legal requirement that the data is stored within the country’s borders.
“With 95% of Nigeria’s data being abroad, the country’s regulators have no control or authority over the data”.
He called for more stringent measures by NITDA and other agencies in Nigeria to strengthen NDPR and related regulations to maintain watertight data sovereignty for the country.
Cloudflex boss said that encouraging local hosting will “grow our economy; empower Nigerian youth which accounts for 60% of the population; increase job creation; encourages the advancement in technology; increase local investments and increase technology infrastructure growth.
“An example of the problem was recently, FIRS made an order that Local cloud hosting should provide access to the authorities. This does not have much effect when most of the data is outside the authority’s jurisdiction.
“A 30% increase in local hosting will increase the revenue by $30m – $150m (N15bn – N75bn)”, he said.
Adejumo added that with 60% of Nigerians under 26 years, this shows the affinity to technology is a route to labour and economic growth in the country.
“Technology is an enabler and Cloud Computing is the new oil.
“Development and advancement in technology and Cloud computing will accelerate Nigerian’s regional and Africa at large.
To further buttress his points, he said that the datacenter market is vibrant and developing in Nigeria.
“Rack Centre has had a $250m investment and they are expanding their capacity
“African Data Centre – Liquid Telecom are spending $100m to build a number of datacenters in Nigeria. This serves as a promising future for local hosting and cloud hosting.
“And there are more plans in the works to provide more datacenter capacity in the country. Google and Facebook are in the process of building subsea cabling along the West African coast. This is huge for the sake of cost of internet and will surely stimulate growth.
“We hear a lot about the government trying to persuade MDAs to host locally. The government has the right to stipulate that regulated industries to be local. This consists of more that 50% of Nigerians GDP”.
Adejumo argued that the current high level of offshore hosting is contributing to the pressure on FX.
Speaking on Cloudflex’s role in the market as a leading local Cloud hosting company, the MD said, “We reside in two datacenters; Tier 3 Rack Centre and Tier 4 Cloud Exchange. We should also be in the African Data Centre in the 3rd quarter of 2021.
“We are VMware cloud verified. We are the only company in Africa using Cloudian S3 storage for our block storage. We are Cloudflex.ng . Nigeria built, Nigeria domain and proudly residing in Nigeria.
“We are cheaper than AWS or Microsoft Azure. We do not suffer any currency fluctuations”.
He also said that Cloudflex has provided IaaS services since 2016, maintaining more than a 99.95% uptime.