Developing Countries Look To The Cloud

With the emergence of Google Drive, Dropbox, iCloud, and Chrome OS cloud computing is well on its way to becoming a necessity in most people’s life in the developed world. It allows for rapid sharing of documents and automatic back up of family pictures and school papers. But cloud computing is capable of much more: it now also allows for the actual applications and programs we use every day to be stored away from our personal computers and accessed through the web. IT-programs are increasingly accessed through the web instead of being physically shipped in a box and manually installed on your own computer.

Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

How can this development in IT benefit the developing world?  The Information Technology & Innovation Foundation’s event “The Impact of Cloud Computing on Developing Countries” on November 8 in Washington, D.C. put forth the potential for these measures to help level the playing field for small and medium-sized enterprises (SME’s) in developing countries allowing for growth and prosperity.

Globally,  goods and services are becoming more information and communications technology (ICT) intensive. This means that for developing countries to compete they need to have access to ICT. Cloud computing makes this accessible in a way never seen before.  For example it gives SMEs in the Global South functionally the same ICT capabilities as many Fortune 500 firms, and does it at similar unit and transaction costs. In South Africa, small firms with fewer than 100 employees have full Customers Relations Management functionality via Cloud.

Cloud computing eliminates many of the supply challenges SME’s face when investing in IT products. In the past, businesses had to estimate how much computing power they would require and then purchase enough servers to cover its peak needs. These resources would either go underused or if the need for computing power exceeded capacity they would have to scramble to meet demand. Cloud computing allows for the rental of computing power on a need basis. This allows for the price of hardware and maintenance to be shifted to remote datacenters where significant economies of scale and scope can be achieved making IT-costs more manageable for small companies.

However cloud computing is not only a tool for businesses: it can also fundamentally improve the integrity, quality and speed of the delivery of government services. Mexico has implemented an e-government portal in the cloud in 2011. The results were overwhelming as costs were lowered while the number of users more than doubled to over 100 million.

There are some concerns being raised with regard to privacy and security. The thought of vulnerable personal information “floating” around is not comforting to many. Governments are increasingly trying to regulate the location of datacenters so that one country’s data can only be stored in a cloud based on domestic datacenters. Localization requirements have the effect of making cloud computing less efficient and profitable.

The biggest payoff from cloud computing is achieved when high-speed communication –  Broadband – is available. Interestingly broadband service is now considered a key to economic growth and many development banks (including the World Bank) have programs promoting the spread of broadband. The World Bank estimates that a 10% increase in broadband penetration increases a developing country’s GDP by 1.38%

Cloud computing comes with great potential but we will only reap as much as we sow. The full benefits of the Cloud require broadband networks, unrestricted flow of information (also across borders), and the freedom to locate and operate data centers on the basis of efficiency and not national sovereignty. We need to find the balance between blatantly naïveté and debilitating fear when discussing the handling of personal data and the benefits of the Cloud.

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