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Local Azure data centres to create new revenue streams for SA IT channel

Oct 03, 2018

The imminent launch of Microsoft Azure data centres in South Africa will help dispel many of the fears still holding companies back from deploying the cloud for mission-critical applications, in turn creating a significant market opportunity for local resellers and systems integrators.

That’s the word from Othelo Vieira, Microsoft CSP product manager, Tarsus On Demand, a cloud enablement company in the Tarsus Technology Group. He says the presence of local, hyper-scale Azure data centres will spur many local end-user organisations to start shifting key production systems to the cloud.

Says Vieira: “Many South African organisations are using software-as-a-service offerings for email, office productivity tools, and other less mission-critical loads, often from local cloud service providers. However, a lot of them have held back from adopting cloud-based infrastructure-as-a-service solutions, or moving line applications with sensitive data to the cloud.

“They had two major concerns. The first was the compliance risk of moving data outside South Africa’s borders, especially with the introduction of the Protection of Personal Information Act (POPI); the other was high network latency between South Africa and Amazon, Google or Microsoft data centres situated in Europe or North America.”

The launch of the Azure data centres overcomes both of those obstacles, giving local users access to the same suite of hyper-scale cloud services Microsoft clients enjoy elsewhere in the world, with the low latency needed for many enterprise applications as well as full compliance with South Africa’s data privacy laws, says Vieira.

Recent World Wide Worx research found that 90% of companies in South Africa increased spending on cloud computing last year, and 83% planned to increase budgets in 2018. Thus, cloud services form an important opportunity for resellers and are likely to become a larger part of their revenue mix in the years to come.

“However, we are seeing some resistance to moving to the cloud and Azure among South African resellers,” Vieira says. “They share some of the compliance and latency concerns of their clients, and many are unsure how the pricing and revenue model will work. But that will change rapidly once the local Azure data centres go live.”

Resellers have an important part to play in guiding organisations to the cloud, helping them to understand the offerings in the market, procure the right solutions, integrate the cloud with their processes and other systems, and manage the security implications, says Vieira. Those that get it right can build a predictable revenue stream by offering their clients subscription-based solutions.

They can also position themselves as true partners and advisors to their customers, he adds. “Moving to the cloud doesn’t remove all the complexity from the client’s life,” says Vieira. “The decisions about when to use the public cloud, when to use a private cloud, which apps to migrate, which providers to use, and how to manage the cloud and in-house infrastructure are complex, and resellers have a great deal of value to add.”

Cloud-enablement partners like Tarsus on Demand can help resellers to deliver complete cloud-based business solutions to their customers and present them with a single invoice. This includes value-added services such as support, financial backing, and an automation and billing platform.  “Resellers can already sell internationally hosted Azure solutions to their clients, but as the local data centres go live, the value proposition will be stronger than ever,” says Vieira.

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