The Managing Director of Cloudflex Computing Services Ltd, Aderemi (“Remi”) Adejumo in this interview discusses what inspired the creation of Nigeria’s leading cloud computing company, as well as the future of cloud computing in Nigeria and Africa in general.
Experienced Technologist with a demonstrated history of working in the information technology and services industry, Adejumo’s strong information technology professional skilled in Management, consulting, strategic planning, business strategy, and cloud computing, sets him apart in the ecosystem.
How has Cloud Computing faired generally especially now that we are recovering from COVID-19?
In a typical office for example, if they interrupt the (electricity) light, you have to switch from grid power to generator and vice versa. Now, when we had lockdown, a lot of people couldn’t get to the office. It’s the same around the world. If your staff cannot get to the office to turn the computers on, you look for an alternative. Even people delivering diesel could not. So, what was the alternative? Cloud Computing! What Cloud Computing is saying is this – you hand me over all these responsibilities. If that happens, my staff won’t bother going to the office or run a generator.
In some companies, some staff were sleeping in the office because they couldn’t go to the office back and forth. If there is no diesel, how do you switch from grid power to generator? You cannot. So, the alternative was Cloud Computing. It was also the same situation in Europe. All of a sudden movement was restricted; things were not done the way it was done. So, people started moving to the cloud. That is to say that there was significant migration to the cloud.
The case in Nigeria was different because we didn’t think like that. But if people moved, it wasn’t locally; they moved abroad (Cloud Computing). This period people were not able to meet and within a short period, we started hearing ZOOM. Before COVID-19, just a few people knew ZOOM. I attended many meetings and funerals on ZOOM. So, people from all over the world could attend a funeral of a man that died in England. Previously, the case was different. It is you are either at the funeral or not. This was one of the key impacts of COVID-19 on society. It brought out a new way of living and doing things.
So, as a techie person, I understand all these things. Eric Yuan, the founder of Zoom Video Communications was an employee of Oracle. Oracle owned a video conferencing platform called WebEx. CNN for instance used that same platform although. Many of the CNN staff were working from home using WebEx. People have forgotten that there were Google MEET and Microsoft Teams (Skype) as well, but it is ZOOM that became more popular. What happened was that the guy who Programmed ZOOM thought he could do a better job by making it more affordable and even free as long as it wasn’t more than 40 people. If not for COVID-19, nobody would know anything about ZOOM. All of these scenarios give you a foundation for Cloud Computing.
Medium and Small Scale Enterprises (MSMEs) in Nigeria are about 40 million and there is still a need for them to embrace Cloud Computing, but how do you cover the grounds for them in terms of affordability?
In Cloud Computing, affordability is paramount. That is why it is great for the MSMEs because there is a monthly plan. Before Cloud Computing these businesses pay for 5 years but now, it’s different. You pay for one month and still get the same value of 5 years.
There is a package for small businesses. The cost is as low as N50,000 a month for a server. It’s just the impression that people are getting that it’s for the large enterprises. It is for everybody. You are just paying for one month at a time. And I saw this huge gap as far back as 2016 and we are in 2021 now. The way we look at Cloud Computing now is different from 2016.
The first Cloud that I built was in 2012 when I worked with Ecobank. It wasn’t really from a monetary point but a need point. Within the Bank, there is an approval process. The highest approval at the bank was the MD. If the cost of what you want to buy is higher than that of the MD, then, it goes to the board. So, getting the board to approve it increased the timing for procurement process. And board only met four times a year. So, what I did was that I bought a large computer at the beginning of the year. I put it up on a data center and created a Cloud Platform on it. With that platform, nobody needed to wait for a certain period to get approval.
The 11 datacenters in Nigeria have a 30 per cent utilization rate which is actually below average, why is that?
First of all, it is just simply a lack of awareness. We have the datacenters but Nigerians would rather go abroad than hosting their data in Nigeria. That’s why our datacenters are empty.
Again people do not realize that they can utilize them. People are not embracing it because they don’t understand it. It’s a new technology. So, it’s understandable. It takes a bit of time to know that physical or hardware can be virtualized through software. Until Cloud Computing becomes a household thing, many people won’t understand it. Then, people can start trusting it. So, a combination of these factors retards the growth.
If Nigerians do not patronize or use local products, there is no way it can grow locally. If you don’t grow locally, the economy cannot grow. If we take everything abroad, are we going to develop anything as a nation? When you speak about these things people think you just want to sell your product but it’s a simple thing, we have to grow locally.
Don’t you think Nigerians seek abroad instead of local because of customer service?
If you engage the services of a foreign cloud platform, you don’t speak to any customer representative. They serve millions of customers around the world. They also have a threshold. For instance, you need to be spending at least N50million monthly before they can speak to you. If it’s below that amount, you have to send an email. The response time is delayed but Nigeria is different. You speak customers in Nigeria it doesn’t matter how many servers you bought.
Even abroad, there are lots of complaints. Before you even get on the platform, they take your card details. They can give you 1 or 2 months free service but the minute it gets expired, they start to debit your money.
Aside from the money they quote you should pay, they charge you for other things which don’t happen in Nigeria. Here, you pay a flat rate for your connectivity, and that’s it.
They’re just a few cloud companies and many other companies that claim to be one and they are not. If you engage the services of those that are not, that experience pushes you abroad. These companies that call themselves cloud platforms never understood what it takes to build such a platform. To build a platform you have to reserve 50-60 of free (rack) spaces.
The nature of each server you give out is elastic. They load their machines full and that causes downtime or outage. Cloudflex hasn’t had any outage was two and half years ago. We have built redundancy upon redundancy on our system to ensure continuity.
Understandably, 95 percent of Nigeria’s data is hosted abroad, how do we bring them back?
If your business is located, licensed and regulated in Nigeria then it gives the licensing authority the ability to put (local hosting) as a condition to obtain a license. If you are a private entity you can only appeal to them by showing your value. It is not a case of pointing a gun in someone’s head. What we have in Nigeria is as good as what you have abroad. It’s cheaper. We have better service because you speak to human which is not the same abroad. There are no hidden charges (with foreign hosts), but here what you are told to pay is what you will be charged.
So, to answer your question: We are going to make this happen through the regulators. My expectation would be if there are regulations, policies, and laws that encourage local cloud, it is going to cause an explosion of cloud companies.
By implication, it will amount to development in that space. What we are doing is advocating for the economy and ecosystem. If we have more cloud companies, it’s going to make the business interesting more than it is now.
For example, we just have four cloud (computing) companies in Nigerian. In South Africa, there are 150. South Africa is a population of 60 million while Nigeria is 200 million.
Imagine if Nigeria goes from four to at least 60, it’s going to be an interesting landscape. It’s going to increase competition and that’s a good one for us as a company. The positives are massive, huge employment, money retained within the shores of Nigeria; increased money in the government coffers e.g., taxes and levies.
Do you think NITDA can use NDPR to achieve this objective?
The equivalent of NDPR is GDPR in Europe. They are focused on making sure that data resides in Europe. It made foreigners who wanted to do business in that space to establish businesses in that area. GDPR came with teeth, but NDPR doesn’t have teeth. Why is it missing in enforcement? For instance, data created in Nigeria should be in Nigeria. If your data is outside Nigeria, then it’s subject to laws outside Nigeria’s jurisdictions.
You said Nigeria is losing about N400million on Cloud Computing, how did you arrive at these statistics?
It’s a complex calculation because we do not have comprehensive figures. We only have figures for Africa which is $1.7bn for 2020. The major market for Cloud Computing in Africa is Nigeria, South Africa and Kenya. If you look at the GDP per capita income in Nigeria, it is $2,000. South Africa is $19,000, while Kenya is $1,800. You look at the population, Nigeria has a population of 200 million, South Africa is 60 million and Kenya is 30 million. For the number of Cloud Computing companies, there are 150 in South Africa. In Nigeria, we have four.
Therefore, I would say, $1 billion of that figure is in South Africa. The other $700 million is shared between Nigeria and Kenya. Maybe, because of our population, not necessarily in development.
In some areas, they are more developed than Nigeria. So, I would say, Nigeria has about $400 million and they have $300 million, because of our size. I am even modest with these figures. In the end, if the figures are reviewed, it might be higher at $700 million. I can only estimate because it’s a business you are doing directly. And because you are doing it directly, it’s very difficult to measure it up with the cost.
And there are other factors that I put into consideration. I looked at how much hardware we buy in Nigeria. The relationship between Cloud Computing and hardware in other areas where you can apply those figures. I applied those ratios to come up with those figures.
I spent a bit of time trying to come up with it. It’s not just data that was plucked from somewhere. I looked at all related figures that are available in the IT market. For example, if you look at what they are saying abroad, 70 percent of CIOs are considering the cloud, 40/50 percent of infrastructure purchases are moving towards the cloud. So, when you look conservatively at these figures you begin to extrapolate and see what we are a little behind the curve.
What is the future of Cloud Computing in Nigeria?
Rack Center, which is one of the foremost datacenters in Nigeria, received an injection of about $250 million. These are seasoned investors putting in their money. If they don’t see anything positives they won’t put their money in Nigeria.
Also, Africa Data Centre owned by Liquid Telecom is putting in $100 million in building datacenters in Nigeria; the first one will open in August. They are also partnering with us.
Our platform is going to be within that datacenter as well. We are already working closely to do that.
So, if you look at all these, there is already an investment of $500 million in building datacenters in Nigeria. If that kind of money is being spent, you start to gather that the figures I mentioned earlier as not far off.
If people are putting out their money in this despite hardship, instability, covid, then, it means there is a huge potential and expectation that a lot will come out of Nigeria. If it wasn’t the case, Google is building their subsea cable to Nigeria. The name of that cable is named after a Nigerian called Equiano (a slave in Nigeria) which is meant to launch this year. Facebook is also laying a cable in Nigeria for 2024. If we are not a market with potential, these guys won’t spend money.
When MainOne launched their cable, they borrowed over $100 million and that was 6 years ago. With inflation and everything, I can see these people spending nothing $150 million just on a cable between Europe and Nigeria. The key focus is Europe, Nigeria, and Capetown. The numbers are there, and if the market is not bright, people won’t invest in Nigeria.
What are your thoughts on Federal Government’s suspension of Twitter’s operations in Nigeria?
We grow in an uproar that people do not set up businesses in Nigeria. Our history of people setting up businesses in Nigeria has not been good. Let the truth be told, we are not a conducive environment for business to grow.
In the last list of Ease-of-Doing-Business in Africa released, Nigeria is 17th. We as the largest black African country should be leaders. I believe that Nigeria should be in the top 5 of ease of doing business in Africa. And if we do not have the right policies that encourage inward investments and give us a platform for people to operate, we should not complain about people going elsewhere. Ghana is just a population of 20 million and we are 200 million, but in terms of organization and what they do, they are more organized than us.
For example, if you compare Accra Airport and Murtala Mohammed International Airport (MMIA), you will see the difference. If we do not get our acts in order, we should not expect people to look at us favourably. Even in what happens today with insecurity everywhere, Ghana does not have that. If you as a foreigner who wants to invest, would you not go to a more secured place? A place that you feel that it’s equitable to both foreigners and locals. There are many factors even before I can comment on the Twitter ban in Nigeria.
So, who is responsible for the security of the land? It’s the government, not the people. Who is responsible for the ease of doing business? It’s the government. If all these things are not in place, then, there is a problem.
We live in the past glory and seem as if we have an entitlement mentality. It’s an investment, not a favor. You don’t invest in a country where historically, it’s not favorable. People invest where they get good returns. So, Nigerians should understand what they are asking for. We need to look at the facts on the ground. We don’t make it easy for investors and yet we want them to come. If a country wants investment, they make it easy for them.
It’s obvious that many Nigerians prefer hosting their data outside the country than locally, have you made any attempt in approaching the government to change this trend?
We are in conversations and the government is receptive to it. In fairness, they have a lot of works to do; it’s not as if they are neglecting what we have brought to the table. It will take time before we can start seeing effects. They are putting things in place to ensure implementation. From what they are doing, they are interested in it. Sometimes, the development of technology moves faster than the authorities can. And because of the number of things that they are trying to do, it’s as if they doing nothing but the workload is just too much.
It’s not necessarily a criticism of the government but there is a big gap in the system. It’s an ever-evolving market. Let’s take the CBN for example as the regulator; there are lots of challenges in there: the exchange rate, the financial market, inflation, and others. So, it’s easy for me to talk about my sector. My sector is about different things that the regulator needs to handle. It’s not two or three things, if it is, then it has become easy.
If you look at the section of technology in CBN regulation, the focus over time has been stability, continuity of business, and redundancy. And that makes a lot of sense if you look at the focus. But what is missing is coming up to speed with the latest technologies and developments. For example in America, since 2001, the focus has been on how to track data against things that will affect them, security-wise. But these things go against the GDPR and NDPR but their premise is that security is paramount over any other thing.
On the other hand, what it does is that it contravenes the laws that have been put in Europe and even Nigeria. So, there has to be a balance with everybody having different emphases. So, there is a discussion between Europe and America on this. Therefore, we need to get natured to that level but how long it will take is what I don’t know.
It’s an ever-evolving discussion, look at the CBN with cryptocurrency. A lot is going on there at the desk of the regulators. Cloud Computing is not the only thing that they are dealing with.
So, can you tell us more about Cloudflex Computing Services’ products and services?
Cloudflex is an infrastructure and service company. We provide the infrastructure in the cloud. We have several partners. VMWare is our high-profile source. We are VMWare cloud-verified which means that we are recognized by VMWare and we have built a platform to their standards and they are happy to partner and recognize what we do in Nigeria. We also partner with VIM which is for backups.
We are the only company in Africa partnering with Cloudian a block storage company – what Amazon calls X3 storage, e.g OneDrive, DropBox. What enables us to do is to give people Storage-as-a-Service (SaaS).
This means you don’t need to have a server, all you need is to buy storage and you get a link where you store your data. Veeam and Cloudian have a partnership and they got a product, anti-ransomware. We have that technology also, which means if you back up on our platform, Cloudflex protects you against any ransomware. We have quite some technologies under our bonnet and partnerships that we feel are necessary to serve our cloud platform. We make sure we keep up to date with the latest technologies and developments they are rolling out.
There are small businesses such as e-learning platforms that need cloud services, do you have packages that cover them?
We can provide a platform for everything that they need. In today’s computing and technology, nothing can happen without Cloud Computing. People talk about Artificial Intelligence, Data Science, Machine Learning, and the Internet of Things, the fact remains, none of these things can happen without Cloud Computing.
Cloud Computing is the foundation of future technologies. So, when we speak, we are preaching and advocating. It’s not that we want to sell, no. People need to understand that this is the way to go, in terms of the development of technology in this part of the world.
The opportunities are in what people are doing. They need Cloud Computing to further what they do. They don’t necessarily need to go to Cloudflex but they need to embrace the technology. Of course, we want people to buy from us, but we are preaching that this needs to happen in the ecosystem. The more people embrace and contribute to the technology, the better the framework for development. The growth of one company alone cannot push for development. It has to be community growth.