Why using local cloud services makes sense

With the launch date for my new cloud computing platform looming large, I am spending more and more time involved in the intimate details of the project. I am also spending more and more time with potential customers and partners. One of the most frequently asked questions from potential partners and customers are why they should use local cloud computing services. The impression is certainly there that the big players have cornered the market and that there is no place left for smaller, local players to bring value. Nothing could be further from the truth. Let’s dissect this a bit from an African/South African context.

The local cloud market is thriving. When I say “local”, I mean companies operating in certain geographies. At the OpenStack Summit in Paris (November 2014) I had the opportunity to meet with many cloud service provides who operate within a specific country or even province. The value of being “local” in terms of language, business culture, currency etc cannot be underestimated. Many of these companies have built thriving businesses, offering products and services that serve the need of their local customers, and serve it better than international players. No one doubts the domination and scale of the large well known players, but they certainly are not everything to everyone. Why is that?

1.) Bill me in my local currency. Currency fluctuation is a real concern if you operate a business in an economy where your local currency fluctuates against the global strong currencies such as the Dollar and Euro. I am currently a Google and Amazon customer, and know what it is like to have your monthly invoice arrive 15% higher than what is was last month, simply because your currency slid by a big percentage against the currency that you are billed in. Add fee overheads for currency conversion on credit cards, and you can face invoices that fluctuate significantly, while you did not consume any more services. Local cloud service providers can build systems that have little or no variables in the form of foreign currency components, leading to fixed, predictable pricing.

2.) Payment using locally accepted payment methods. This sounds like a moot point, but many companies do not provide credit cards to all their employees who can consume cloud services. These cards also may not have the correct limits in place to allow for big bills when cloud services gets consumed in significant volumes. Local players allow you to use local payment gateways, with easily accepted and understood payment methods. For instance, we accept credit cards (of course), debit cards, electronic fund transfers (that clear immediately, regardless of the originating bank) and Bitcoin. All billed in local currency.

3.) Improved latency to the cloud services. Let’s not kid ourselves, Africa is not as well connected as the rest of the world. The big players also have no local datacentres here that provide their services. If we measure latency using PING (latency is half a PING), we can reach certain US east cost services in around 110 milliseconds. Consider that we can access our local datacentre from almost any ISP in around 15-20 milliseconds. That is around 400%+ faster. This becomes key when you start delivering latency sensitive services.

4.) Local support. Yes, I know we all speak English anyway, but that is not the point. One of the upcoming features in our cloud service, is a very advanced software defined networking (SDN) layer. For customers who want to use our public infrastructure to extend services from their MPLS networks, that will require some onsite consulting. Difficult to do if the support staff you want to interact with is a continent away. This is only an issue as we deliver new, cutting edge solutions. The drive is always there to automate and simplify as much of what we do as possible.

5.) Local datacentre access. One of the biggest reasons to use a local cloud provider is that you have the opportunity to collocate equipment with your cloud provider. Many customers that I have spoken to want to outsource certain functions to a cloud provider, but connect certain services that they have control over to these cloud platforms. In certain cases that becomes a lot easier when you can collocate services, running cross-connects to a cloud provider to eliminate any bandwidth costs. A great benefit for more complex and bandwidth intensive solutions.

I am confident that as we start providing commercial services, more and more customers will enjoy that local touch that we provide.

About Thomas Lee

I am a technology entrepreneur, father of two young boys, and husband to Mari. Love technology, audio and stuff with wheels.
Bookmark the permalink.

Comments are closed