Cloud computing has been helping the emerged economies like the US for some time now. However, there is a great potential for the nations that have a limited number of resources and lack of infrastructure for improving their position using the Cloud-based resources. In the case of emerging economies, necessary funding needs to be done in order to meet the ever-increasing and changing demands of its population. As a result, there has been a shift in the way capabilities are constructed and modified. Rather than going for hardware, companies in emerging economies prefer to opt for a “pay per usage” model that is implemented by the top leaders in the Cloud industry.
Benefits Cloud Offers to Emerging Markets
For some years now, below are the key benefits that Cloud computing can offer to the emerging markets. These benefits have been widely accepted and formulated based on a large number of studies carried out.
1. Usage Simplicity
Cloud technology is easy to install, maintain and update when compared to traditional hardware. It can easily be accessed by less technology-savvy customers as well. The Cloud offers a relatively low barrier of entry and this can be very beneficial in the case of emerging economies. Cloud computing allows the systems to adapt to the mobile model more. The mobile model offers a much wider penetration for emerging markets as compared to the laptops. Thus, mobile can be often seen as the key to technology growth in any emerging economy.
Simplicity can often be linked with scalability. The companies need not buy more than their requirements and simply use the building blocks for building their capabilities and increase the demands with time if needed. A scalable solution could depict low and upfront investments and this can be an ideal solution for the under-developed institutions in the emerging economies. Such a solution is very useful for the nations that are populous and looking to be a part of the digital race using mobile.
3. Lowered Cost
Simplicity and scalability help in lowering costs and this is well justified by the high penetration rate of this technology in various industry sectors across the emerging markets. The smaller companies show a very low intention of implementing new solutions because of the risks associated with the discarding of the legacy systems. Lowered costs also depict a minimized amount of risk for the government to develop infrastructures as the spending is minimum and is based purely on demand.
High Potential for Emerging Nations
The above-stated benefits depict that Cloud computing holds a greater degree of impact potential for the business firms that are ready and looking to implement it. This often gives exponential growth, allowing companies and economies to scale up their multiple technology steps ahead of their digital transformation. This is done by creating new business models.
So, the key impacts that Cloud will be offering to the emerging markets include-
1. Enhancing Security
Cloud technology has been allowing third-party developers for providing a scalable security measure that can be accessed by everyone. This, in turn, solves the major portion of challenges that are often encountered when digital solutions are developed.
2. Developing New Products and Services
The emerging nations don’t carry the burden of legacy systems. They are free to innovate and create newer processes as well as business models. Some of the emerging nations are potentially better adapted to the digital economies as compared to the developed economies.
3. Extending Reach
Due to the services that are provided by the number of players in the Cloud market, companies present in the developing nations have gained access to the globalized workforce. These countries can improve their accessibility for their users present in remote locations. These people have got the Cloud access on a global level without any time restrictions. This has enabled higher productivity along with dissemination of knowledge that can raise the abilities of the entire community and thereby giving them accelerated development.
Barriers to Cloud Adoption in Emerging Markets
The developing countries and their economies have been facing several obstacles in order to meet the standard that has been present by the Western world.
Following are the 3 major obstacles for the adoption of Cloud computing in the developing nations-
Lack of infrastructure is the most important pitfall for any developing country to adopt Cloud computing. Poor broadband connections at remote locations and the uneven access to electricity are some reasons that have resulted in the hindrance of technological development. This can also have a direct affect on reliability, though the predictability of Cloud computing remains a great asset for carrying out a technological transition. Though, the emerging economies are flexible to a greater extent without legacy systems in place and can soon catch up the pace without paying any prohibitive price for development.
2. Lack of Expertise Workforce
Most of the countries in the Asian and African continent fall short on the resources with the skill needed for designing, managing and implementing the Cloud solutions especially in virtualization, data center design along with security and modern distribution network. In such countries, the governments are already challenged to create a pool of highly skilled personnel to have local expertise for managing newer high-technologies.
3. Accepting the Sinking Costs
The developing nations have invested less in the legacy systems as compared to the developed nations. The transition from one system to another is a major concern for risk-prone sectors like the financial services that are looking to reduce the cost of loss of management and ownership of data. Such costs can be mitigated if the system migration os gradual and benefits of moving to the Cloud is justified. Other cost-related challenges include the risk of vendor lock-in and costs incurred during transition of Cloud-service providers.
The future of Cloud computing for an emerging economy will rely heavily on institutions and the backing that they perform. Institutional legitimacy is one of the key aspect for any emerging technology as the Government is responsible for providing normative, cognitive and regulative structures. Cloud technology is also dependent on the development and structure of the industries and thus it becomes important for leading Cloud players to continue their investments in the infrastructure for spreading the technology.