Cloud adoption offers start-ups faster growth, AWS chips in credit – O’connor
Cloud technology is driving the growth of start-ups in Africa like the rest of the world, and adoption is only gradually taking off despite its potential. KELLEN O’CONNOR, EMEA managing director for Start-ups at Amazon Web Services (AWS), spoke with BusinessDay’s CALEB OJEWALE during the recent re:Invent conference in Las Vegas. He highlights success stories on the continent and what start-ups can gain from cloud adoption. Excerpts:
When we hear of AWS it is usually with this perception of ‘this is something for the big boys’, but apparently, there’s room for start-ups too. What has the adoption by start-ups been and especially from Africa?
The team that I have the pleasure and responsibility to lead is really focused on how to help entrepreneurs from idea to IPO and exit, and I think that’s really important in the context of your question about how we can help entrepreneurs and start-ups in Africa, not only the big boys and girls.
The team was formed because AWS recognises that start-ups go on a journey, and it is important to us to help them from the beginning. We as a large cloud provider, and a large global organization can make a bigger difference to their success. And this is something we have seen over time.
We have given credits to hundreds of thousands of start-ups in the last couple of years alone, worth over $2 billion. It is a massive investment
When we first launched AWS in 2006, the first customers to use the cloud were start-ups. It was not enterprises back then, so it is deep in our DNA to work with start-ups of all sizes. They have been a big part of the success of the cloud. They have given us a lot of the product feedback that resulted in the 200 Plus services we have today.
From Nigeria we have Flutterwave that is built on AWS, as well as Paystack (among others). Our mission is to help get the next wave of entrepreneurs from ideas from early on, all the way up to joining the list of big successful names.
What really do start-ups get to benefit by adopting cloud computing? Is it that much of a game-changer?
Yes, it is that much of a game-changer. The operational resilience that you can have is much greater in the cloud. You can deploy across multiple data centres and there are no upfront fixed costs. Before the cloud, you had to buy servers or rent out an expensive contract with a colocation provider in order to build your tech start-up.
With the cloud, you pay for only what you need, whenever you want it, and when you do not need it anymore, you stop paying for it. Flexibility is important for a start-up and the number of products and services that we have means start-ups can focus on building their core value proposition. They do not need to reinvent the wheel and build-out, you know, the machine learning services that we have built.
These include the analytic services, the database, the networking, and they get all of that instantly from day one and can focus on building only the pieces that their customer needs.
And if you talk to any founder, they will say one of their most scarce resources is engineering headcount. And so, this really saves them time to market. Speed matters for a start-up, you are in a race to disrupt the incumbents, and the cloud gives you that.
The last thing that I would say is, it gives you a business partner, in this case, AWS, who is invested in your success. We actively support start-ups beyond just providing the technology.
We have a credit program so that you can use these cloud services at zero cost when you are getting started. To give you an idea of the scale, we have given credits to hundreds of thousands of start-ups in the last couple of years alone, worth over $2 billion. It is a massive investment.
We are also taking the knowledge that we have from working with start-ups and helping them scale globally since the beginning of 2006. One of the ways we are doing that is we launched an accelerator called the Start-up loft accelerator, one year ago.
We have had over 270 early-stage companies participate in it. Several of them have gone on to raise VC funding. We have over 100 VCs that are involved as well in that accelerator, and there are some great successes.
An example from Nigeria is a company called OneHealth.ng. They are an online pharmacy using AI to help their patients provide better access to the services and understand based on what your illness is, what the right package of medication to access on that pharmacy, and they have gone through our accelerator.
We got great feedback from the founder that their growth journey has been accelerated because we are bringing this global knowledge into the local market to try and help entrepreneurs achieve success faster, and this is a free accelerator. By the way, we do not take any equity in the company. We are doing it just to help companies grow.
Earlier, you mentioned that for founders, the engineering headcount is a major reason why they want to adopt cloud because it saves them that headache in terms of human resources. From your perspective, how much of a headache really is the skill gap needed to adopt cloud, especially in Africa? And more importantly, how do you think this skill gap can be bridged?
It is true that there needs to be more skilled people; even development skills, front end or back end are all sorely in demand. At AWS, the way that we see it is we are trying to help bridge that gap. There are several training programs that we have, training millions of people a year on AWS cloud skills, and I know that we have a big presence across Africa in trying to bring AWS skills there.
One of the things that our customers tell us is, there is this huge demand across all of the IT industry for skills of all kinds, but when they choose to build on AWS, there are more AWS skills in the market than any of the other clouds and so that actually makes it easier for companies, especially start-ups who are just starting out to actually find talent with the skills to build what they need. There are more of them from AWS and we’re trying to invest on top of that to grow and even bridge more of that gap.
You recently launched in Nigeria, what does the future hold for you there and the region in general?
We are investing in the local field within the AWS start-ups team. We have hired a number of people on the sales and marketing side, we have solution architects, and management and leaders to be based there because we really see the opportunity.
We also see the need that is present because it is a younger ecosystem. There have been a few big unicorn successes and one of the great things about that is there are a lot of experience Founders who are going to come out of those companies and see the next wave of really big successful companies both in the established verticals like fintech and we hope to see in healthcare and in many other fields. We are investing our time and resources in it, and I am just personally really excited about what the next five years hold for this start-up ecosystem.
Read also: Here are five new database and analytics capabilities on AWS
How are you responding to emerging competition in cloud computing on the continent? It used to be mostly Microsoft but now Google is also trying to get into that space. Is this an issue for you at all?
I think about it in a different way, which is I focus maniacally on what customers want and what customers are telling us they need. I think it is great by the way, that lots of companies are coming and investing in the start-up ecosystems in Africa. I think there is a huge long-term opportunity for entrepreneurs there.
From our perspective we are kept more than busy listening to customer needs and responding to those. We find that we are kept plenty busy by that versus getting distracted by what the other Cloud providers are doing, and that has been a recipe for a lot of our success so far.
We keep innovating based on the customer feedback that we get. For example, 90 percent of the products and features we build and release, we did not come up with them in AWS, customers told us they needed those things. That playbook has been working well for us.
Finally, what success stories stand out for you in Africa in terms of start-ups that have adopted AWS?
One of them is Flutterwave, which is a big name and they are using a host of our services up and down the stack, which are enabling their success.
AWS developed lambda, as well as a number of other serverless offerings where you don’t even have to worry about managing machines, you just pay for compute when you need it.
That was huge for Flutterwave, because they have peaks and troughs in their customers’ usage for their payments, which sees them saving over $100,000 a month in cloud consumption, to use those services.
Another good example is Jumia, which has a big e-commerce company and different companies under it.
Jumia has been built on AWS and we have been able to really help with their infrastructure needs, as they scale very rapidly. There is this resiliency in the data centre network that allows you to rapidly scale your business, which Jumia has benefited from. They also happen to be a big customer of AWS serverless resources as well and that has been pretty great for them.
The third company is Paystack, which is like the stripe of Africa. I think we all know FinTech has been strong out of Nigeria and on the continent, and there is a reason for that. You have a lot of people who are unbanked, and the traditional financial sector has not been super innovative so far in Africa and so that’s been a real opportunity for start-ups.
For Paystack we have been able to help them with building their payment solution on entirely AWS native services, compute and storage and databases, which has enabled them to focus on building a market-leading solution, which ultimately resulted in a $200 million exit when they were purchased by stripe a couple of years ago.