While debate rages regarding whether Kenya is ready to host major cloud providers, some of the largest names in the industry are setting up shop in the country. Amazon Web Services (AWS), Microsoft, Google and Visa are only a few that have recently chosen Kenya as their base for new operations.
The decision for these tech giants to set up local offices all comes down to one thing: meeting client demand. And that demand comes from Kenya’s growing economy and small but fast-growing startup sector. With many entrepreneurs beginning to explore cloud computing as an alternative to self-hosting – or even just sharing a server with other businesses – the need for a local presence has grown significantly.
Microsoft has several cloud services present in Kenya and is one of the leading software companies in the country. They have a number of cloud services, including Azure, Office 365, and Power BI. In addition to their cloud services, they also have 50+ data centres in Africa and over 1,500 employees across 16 countries. Microsoft has been present in Kenya since the 1990s and has been growing its presence there since 2011. Additionally, in 2018 they announced plans to launch a $100 million impact fund to help Kenyan companies grow with technology (e.g., by using the cloud).
Visa’s M-Pesa partnership and Google Cloud’s policy on data residency will help cement the companies’ positions. In January, Visa and M-Pesa, one of Kenya’s most popular digital payment services, announced a partnership that will see M-Pesa customers make Visa Direct payments to over 30 million accounts across Africa.
This will result in additional revenue for both companies as it increases their customer bases within the continent. It also prevents any single company from dominating the sector (like M-Pesa) or creating a monopoly against its competitors (like Visa).
Similarly, Google Cloud’s policy on data residency (which requires its data to be stored where it is created) was a major factor in why Nairobi was selected as one of two cloud regions on the continent. The policy means that Kenyan businesses won’t have to store their data in Europe or America and will instead be able to use Google’s services locally.
The competition for Africa’s cloud market is heating up.
There are opportunities galore in the burgeoning African cloud computing industry, and tech giants like AWS, Microsoft and Google are rushing to get a piece of the action. The world’s largest cloud computing company – AWS– launched an office in Nairobi, Kenya, last week; its first in Africa. Visa Inc., one of the global leaders in electronic payments technologies, also announced plans to open an office in Kenya to focus on its digital payments business within the Sub-Saharan Africa region.
Microsoft has had an office in South Africa since 2005 but it wasn’t until last year that it opened a similar space dedicated to cloud services only. In January this year, Microsoft announced it would expand Azure Cloud capabilities into South Africa with two new regions by 2018. Google followed suit with a data centre launch announcement earlier this month – the search giant will be launching a cloud region based out of Johannesburg next year.
Why are AWS, Microsoft, Google, and Visa setting up in Kenya? The answer is simple. They are expanding the market. Did you know that Kenya is the largest economy in East Africa, with a GDP of $69 billion? It makes sense then that they would want to be there.
And if you think about it, Kenya is a very strategic place for companies to set up shop – 55 per cent of Fortune 500 firms have an office in Nairobi, and most of them have their African headquarters there.
It’s interesting because you have this weird dichotomy where there are the world’s biggest companies competing on one hand and then on the other hand there’s a lot of innovative startups that are disrupting traditional business models in sectors like insurance and banking.