Why Cloud Computing Hasn’t Been Successfully Implemented Yet in Developing Countries?

Cloud computing is sweeping the United States and Europe by storm, partly because of its low cost, ease-of-use and extreme efficiency.  While cloud computing is taking those areas by storm, it is lagging behind in the numerous developing countries of the world.  There are many reasons why cloud technology has yet to be implemented in developing parts of the world.  Reasons such as lack of existing infrastructure, costs and lack of service providers hinders the development and growth of cloud-based computing technology in developing countries.

Lack of Infrastructure

While people in the United States take the internet for granted, people in part of Africa, Russia or the Middle East may never have heard of the internet.  Cloud computing relies on the power of the internet to transmit data from virtual machines to central servers and vice versa.  Without a highly developed internet infrastructure it is very difficult for developing nations to incorporate cloud based computing technologies.  Other infrastructure that is necessary for the proper operation of any cloud-based computing environment includes computer hardware, servers, connection cables, databases, web platforms and administration.  Most developing countries lack these resources, or they are prohibitively high preventing existing cloud service providers from setting up operations in these countries.

High Costs

Another major limiting factor when it comes to incorporating cloud based services in developing countries is the relatively high cost of opening up a cloud based operation in a foreign country.  If the company is originating from Europe or the United States they will have to pay fees and taxes when they incorporate their business in the foreign country.  Foreign incorporation fees can range from thousands of dollars to millions of dollars depending upon the countries policies regarding foreign investment.

Another cost that can hinder the development of cloud services is the cost related to purchasing the equipment required to run the operation.  While computers and IT technology equipment has fallen dramatically in price in the United States and Europe it continues to remain at a premium price point in developing countries.  This means a startup cloud service must either import their computing equipment from a developed nation or bear the high costs or purchasing new equipment in the developing nation.

Lack of Competition

A lack of competition could create issues for a company attempting to start a cloud-based computing service in a developing country.  If the country has monopoly laws similar to the United States and Europe it may be impossible to start a service as there will be no competition to compete with.  The service may face harsh restrictions such as being controlled in part by the government or having some level of government oversight.  This can cause the service to be slow, delayed or otherwise cause an inconvenience for potential customers.

If a service manages to establish themselves in a developing country they must offer fair service and prices to their clientele.  If the clients in the developing country feel the prices are too high they may decline the service and continue to use whatever service or method they have already been using.  This can make it difficult to establish a large enough customer base for a cloud-based computing service to be profitable.

Recap

There are numerous challenges relating to starting a cloud-based computing service in a developing country where no such services currently exist.  A company looking to expand their operations into a developing country must overcome a variety of hurdles including lack of existing infrastructure, prohibitively high costs related to starting their operations and the ever present threat of having no competition, which can easily lead to government intervention.

Edward Dennis is a tech and marketing blogger. He likes to write topics about dedicated server, cloud computing and any marketing related materials.