The new UNCTAD Information Economy Report (2013) is examining the economic potential of cloud computing for low- and middle-income countries, where rates of adoption are currently low. Policy recommendations for governments are formulated but the power of local innovators is under estimated. 

In the preface BAN Ki-moon sets the tone:

Innovation in the realm of information technology continues its rapid pace, with cloud computing representing one of the latest advances. Significant improvements in the capacity to process, transmit and store data are making cloud computing increasingly important in the delivery of public and private services. This has considerable potential for economic and social development, in particular our efforts to achieve the Millennium Development Goals and define a bold agenda for a prosperous, sustainable and equitable future.

Cloud computing has matured quickly over the past years and has become an important new direction in the ICT infrastructure for governments and enterprises in the developed world. Some predict that cloud technology will be among the most significant disruptive technologies over the next two decades, with major implications for markets, economies and societies.

According to definitions proposed in April 2013 by the International Telecommunication Union (ITU) and the International Organization for Standardization (ISO), cloud computing is a paradigm for enabling network access to a scalable and elastic pool of shareable physical or virtual resources with on-demand self service provisioning and administration. Cloud services are defined as services that are provided and used by clients on demand at any time, through any access network, using any connected devices that use cloud computing technologies.

At an individual level cloud services have an extensive adoption in Africa as local services are often expensive, unreliable and of low quality. Especially services like webmail an online social networks are popular and still growing fast. It is common practice that Yahoo! or Gmail services are used for official communications by government officials and companies.

In countries with is a growing SME sector, the potential for SaaS (Software as a Service) solutions is high. High quality ICT services at a low cost can help SME’s to mature fast. Although the adoption of cloud services but SME’s is still small, if the SME sector expands, the market for SaaS in developing countries will become more important and eventually dominant as it already is in developed countries.

At the levels of Governments in Africa the potential still needs to be fully explored. Because of privacy fears, Government departments and larger corporations prefer private over public cloud approaches.

The drivers for the adoption of cloud computing and cloud services are clear:

• Cost savings in hardware, software and personnel, derived from the economies of scale that are available from the cloud;
• Flexible access to processing and storage capacity on demand, with a high degree of elasticity;
• Improved system management, reliability and IT security.

At the same time, the options for cloud adoption available in low- and middle-income countries look different from those in more advanced economies, for several reasons. Critical factors relate, among other things, to:

1. The availability and quality of cloud-related infrastructure: Access to broadband internet is not yet common, but also the lack of supporting infrastructure, such as Internet exchange points (IXPs), reliable and inexpensive electricity and robust fibre-optic backbones also affect the deployment of national data centres.
2. Cost considerations: The fees for broadband access and usage and charges by the ISP are still high compared to developed economies.
3. Data protection and security: Issues of data protection and security are among the concerns most frequently mentioned by potential cloud customers in both developed and developing countries. Especially in Africa, very few adequate legal and regulatory frameworks are available to address data protection and privacy concerns. The placement of data in the cloud may require regulatory intervention to address concerns related to personal  privacy, commercial secrecy or national security.

In spite of the expected potential, UNCTAD is careful in its recommendations:

Experience of cloud computing in developing countries
is too recent for there to be a strongly established
evidence base on which to assess impacts. Businesses,
Governments and other organizations should carefully
examine the potential for cloud services to improve their
management and service delivery. They should only
migrate data and services to the cloud when they are
confident that the cloud offers significant benefits and
that attendant risks can be appropriately mitigated. Both
public and private cloud solutions should be considered
in this context, taking into account implications for data
security and privacy.

UNCTAD proposes the following steps for Governments that wish to translate the potential of the cloud into tangible development gains. In terms of scope, at the national level policy making would be advised to consider measures related to the following areas:

• Assess the cloud readiness of the country: Governments should start by carefully assessing the current situation in their countries, to identify bottlenecks and weaknesses that need to be addressed if the cloud is to be effectively exploited, and clarify what kind of cloud solutions are most propitious.
• Develop a national cloud strategy: Based on the readiness assessment, a national cloud strategy could be drafted either as a stand-alone policy document or as an integral part of the national ICT strategy.
• Address the infrastructure challenge: This would involve measures to improve the provision of reliable and affordable broadband infrastructure and to monitor regularly the quality of broadband services. Effective communications regulations are here of the essence. Attention should also be given to the role of IXPs and the provision of electricity.
• Address relevant legal and regulatory issues related to cloud adoption to ensure that cloud service users’ interests are properly protected: Key areas include the location of data, e-transactions and cybercrime. Efforts should be made to reflect international best practice in the development of new legislation.
• Map opportunities in the supply side of the cloud economy: Three key areas deserve particular attention: the development of national data centres, the potential for cloud aggregation services, and the development of new cloud services.
• Address the need for human resources. Skill areas that are likely to become increasingly important include those related to the IT and software skills needed to manage the migration and integration of cloud services; management and organizational skills to handle the reorganization and re-engineering of business processes; and legal and procurement skills.
• Government use of cloud services: Given their important role in the information economy in many developing countries, the role of Governments should be explored with regard to the establishment of national data centres, e-government systems and related public procurement.

Although the report of the ITU clearly provides a very positive impulse to explore the potential of cloud services for Africa, unfortunately the centre of gravity is very much on the side of the government. It is true that regulation needs to be in place, and the threshold to broadband access needs to be lowered, but the report seems to overlook the power of industry to make Governments move. Local innovators and early movers in IaaS, PaaS and SaaS should be supported and motivated in order to develop local solutions. In Africa business and an local initiative are still the most important drivers for change, not governments.