Google Cloud is one of the largest cloud providers on the planet without a doubt. When they declared their Q1 results earlier in the year, their total cloud sales had hit $7.45 billion, with their revenue growing much faster than the competition, circling in at 28 per cent. Following years of generating an operating loss, Google Cloud successfully turned a profit during the first quarter of 2023, by generating an operating income of $191 million in the quarter, compared to an operating net loss of $931 million year over year. This is an incredible turnaround.
I would like to think Google Cloud Africa and its Head, Niral Patel, had something to do with it. In October 2022, South Africa joined Google’s global network of 37 cloud regions and 112 zones worldwide. An announcement that followed the recent preview launch of regions in Malaysia, Thailand and New Zealand. Google Cloud regions make it possible for users to deploy cloud resources from specific geographic locations, and access several services including cloud storage, compute engine and key management systems. Basically, Google Cloud Africa brought it all closer to home: data analytics, AI and machine learning capabilities. So, when Patel flies into the country and an opportunity for a one-on-one interview came up, it was a clear yes.
I would like to start off by welcoming you to Kenya, Niral, and thank you so much for showing up. Welcome.
Thank you, Carol. Kenya has become a second home to me, so it is always great visiting.
We are having a lot of conversations around technology as a country and a continent. Our current administration is quite keen on a turnaround while pondering how to infuse tech into the country’s agenda. Just like our government, you have to handle the day-to-day of tech. So to start us off, what do you think is the future of cloud when it comes to digital transformation in Africa?
It’s a question everyone is asking themselves, especially in this continent. And just to comment on your current administration. Recently, the president of Kenya talked about digitisation as a priority for his government, with a specific milestone. (He directed that all 5,000 government services be digitised by June 2023). That will be an acceleration to the digital transformation taking place at a sound rate for Kenya. Primarily, we are seeing governments wanting to get closer to citizens, and enterprises wanting to get closer to their customers, making lives more effective and efficient in the way we transact. I think the prospects are pretty exciting. You asked about cloud computing. It is an enabler from a scalability perspective and a secure way on how to provide the services. These are the opportunities open to governments and enterprises.
What would you then say would be the biggest trend/s in cloud over the next 10 years if that is not too many –
In technology, 10 years is quite a long time. Sustainability is really top of mind from CEO to Chief Information & Digital Officers (CIDOs) and CIOs when it comes to being responsible for the environment. (The Cloud, according to a 2022 MIT Press Reader article, The Cloud Is Material: On the Environmental Impacts of Computation and Data Storage, cloud computing now has a greater carbon footprint than the airline industry. Stating that the Cloud is not only material but also an ecological force. That, as it continues to expand, its environmental impact increases, even as the engineers, technicians, and executives behind its infrastructures strive to balance profitability with sustainability).
Then there is the acceleration of cloud adoption by businesses. They need to expand, but they also need to meet market, customer as well as citizen needs. We are seeing IT departments are no longer merely supporting teams in the organisation. They are becoming quite integral decision-makers at the board level. And IT decision-makers are no longer reporting to a COO function, but they are reporting directly to the CEO, directly contributing to the transformation and direction we see. And, as tech becomes more adopted across the continent, the need for skills becomes crucial. There is a big drive on the talent front.
This question came up in our Africa Cloud & Security Summit (2023). Does everyone need to be in the Cloud, or can some businesses opt out of it?
It depends. The Cloud enhances what you do today, making it more secure and reliable. Organisations and governments are living in a hybrid world and can therefore say whether the Cloud works for a certain set of services but not others. It is, fundamentally, down to the organisation that needs to make the decision. At the end of the day, our role as Google Cloud is to enable their strategy and add value, but it is up to the business to make that to be, or not to be in the Cloud decision.
This is bandied about quite often, that cloud enables digital transformation. How does it do this?
In a couple of ways. If you look at speed to market, organisations can deploy really huge services. The other is there is a space for innovation. The ability to innovate at pace and at scale has become a defining change in the adoption and use of tech. And, with more tech being adopted across our everyday lives, the notion of security becomes paramount. Cloud becomes a big differentiator and enabler depending on what we do on the daily.
Like any other courtship leading to a union, what are Google Cloud’s intentions when it comes to Africa?
Quite big. Very recently, we announced our intent to launch a cloud region in South Africa during the Google for Africa 2022 event. And that is the first of our cloud regions to be launched on the continent. To give you some insight into the impact Google Cloud has, we conducted a study through AlphaBeta Economics for Google Cloud, and it envisaged that it will contribute over $2.1 billion to the South African ecosystem and contribute an additional 40,000 jobs by 2030. As we continue to scale our investments throughout the continent, we will see this accelerated.
Why did it take Google so long to come to Africa? AWS and Microsoft had already made inroads and established their presence by 2022 when you landed. What took you?
Like every business, we’ve got to make sound decisions. Surveying the opportunities, where we are going to invest, and how and why we are going to land; these are multiple decisions we must make. I wouldn’t say it has taken us long. I would say it has given us the opportunity to do it right so that when we landed, we delivered impact.
Has working with SMEs indicated that they are quick at adopting tech or do they think it is expensive and only for the multi-corporate?
Actually, SME cloud adoption is quicker than enterprises. There is a lot less legacy that they have to deal with. And the ability to innovate and get their products or services out to market is far quicker. It allows them to focus on innovation while leaving the tech to us.
Right before we started the interview, you mentioned the hybrid workplace has its own unique opportunities and challenges. How has this new workplace adapted to the Cloud?
The pandemic has taught us a lot. People talk about the new normal, but I don’t think we’ve seen that yet because it will be playing out in the next couple of years. The hybrid workplace is interesting. It gives you flexibility, especially with the Google Workspace solutions we have. It gives one the opportunity to collaborate with staff, customers, and business partners. Here is an example. We could’ve conducted this interview virtually, and I don’t doubt it would have been a rich experience. That being said, I personally tend to believe face-to-face has an impact. But we have seen an equal amount of impact in the hybrid world.
Did you observe the uptake of digital transformation during COVID-19 with regard to cloud adoption? What was it like and did the pandemic play out as a catalyst?
A lot of ideas were being executed very quickly around the time the pandemic hit. I was in South Africa, and we entered a Level 5 lockdown. We were not allowed to be working from any office. You had to be at home. Organisations that were deliberating on how to leverage cloud services were struggling. Organisations that had the ability to switch over immediately could fully function and continue to drive focus in their business. The pandemic definitely proved to be a catalyst, and we saw that momentum. We are now witnessing tech adoption and transformation simultaneously.
You must have worked with clients during this period to date. How do you go about developing a strategy with a client? Do they walk in and then tell you … what, exactly? Do they have a clear sense of what they want, or do you have to walk them through it?
It is a partnership. Every customer discussion is unique and is about understanding who we are and the details around who they are. My advice is, to start small and test the merits of what you’re trying to achieve, and then scale. Cloud is not an immediate big-bang approach. You’ve got to navigate the process and journey carefully. It goes back to having the right level of skills to support the journey you are on and whether you can execute it. It is important to also note that what you pick has an impact on the organisation and that you realise the value to what you are doing. Otherwise, why would you do it?
The part where you mentioned talent is a great segue. What is the issue with talent? Where, precisely, is the skills gap?
It’s a function of skills accelerating far quicker along with the adoption of cloud. However, partnerships accelerate the growth of skills adoption and growth. A lot of the time, we partner with organisations to help them upskill their workforce on the technologies they have adopted.
Would you be in a position to share a case study on a project or organisation you have worked with when it comes to cloud installation and impact?
Yes. In fact, we have a very good example in Kenya; Twiga Foods. Twiga started out selling bananas and tomatoes. Leveraging cloud technology has allowed them to do a couple of things such as supplying vendors. They can now use dynamic pricing from a cloud standpoint and know the right price point in the market they are operating in. Prices fluctuate a great deal in the current economy, and this has helped Twiga Foods align with the market they serve. Replenishing and managing stock in organisations that were taking approximately 300 hours are now that piece of work within five minutes. The material benefit from a business standpoint is significant.
I would imagine so. And I presume you also worked with them on upskilling and reskilling of staff.
This merger between cloud and security makes them next to impossible to separate. How do trends in cybersecurity impact the Cloud?
They go hand in glove. The more tech is adopted, the more malicious activity exists. Security is quite interesting because you want to make sure you are protected before there is a problem.
Yes. This is very true.
Early prevention and detection are key elements of security when it comes to securing an organisation. In the world of security, when you have a problem, there is a big impact on the organisation or wherever the problem resides. Prevention is crucial. Security will also become more dynamic as tech is more readily adopted.
When it comes to cloud, there is no ignoring the Big Four. What would you say sets Google Cloud apart from its competitors?
Data is a very strong point for us as well as security. It is the value we bring to our customers in that space. 300 hours to five minutes is a significant bottom line for a company. It breeds a strong element of trust.
In that case, you must get a great deal of positive feedback from clients. For instance, when you cut down 300 hours to five minutes, what did the customer say? They must have been incredibly appreciative.
They say that we are an integral part of their business. And I use the word ‘partnership’ deliberately because that’s what it is about. Being invested in each other’s success. It is a thing of beauty when customers give you their feedback. If you are adding value to the client, you are driving value to the end user. Relevance and impact really matter.
What is the distinction between a cloud journey in Africa versus, say, the West, and what can we learn from their journey?
We continue to learn from each other. I use the word ‘journey’ a lot because it applies, and no two journeys are the same. It is very bespoke to that customer and market. There is a lot we can learn from Kenya as well as Africa, and that is the beauty of partnerships and what we do at Google. We have a global reach that we can share with Africa that we are learning. It helps us figure out how to do it better. How to customise it – for this market. For this region. No customers, regions or countries are the same. But there are certain fundamentals we can leverage to find a solution that makes sense for this market.
Finally, with your unique perspective when it comes to handling data, do you bump into regulations because of the General Data Protection Regulation (GDPR) and have to hire an expert to keep you in check?
We are certified for GDPR, Protection of Personal Information Act (POPI Act) and the Data Protection Act (2019) in Kenya. Where organisations need to see how it works, we take them through these regulations and the example of what we are trying to achieve and give them a level of comfort with us. It allows them to achieve what they want while subscribing to the guidelines of policy.
When your clients come to see you, what is usually the trigger for their needs?
It is industry/customer specific. There are definitely trends which will exist across industries and with most partners, but it is usually quite specific to their goals and what they are looking to achieve. It’s not a one-size fits all.
In all the years you have been in cloud, what has most surprised you about your clients?
Innovation stands out for me. And the burning desire specifically in Africa to innovate. Because a lot of the discussions we get into are functions of innovation and gaining a competitive advantage. Those are very exciting and invigorating conversations we get to have.