Local Cloud computing regulation will boost local content, local spending and invigorate local economy -Adejumo
Cloud computing in Nigeria appears to be the low hanging fruit that individuals and organizations are yet to harness because of their penchants for foreign cloud platforms, yet the country loses revenues while the foreign firms continue to develop. In this exclusive interview with some selected journalists including Gentechnews Editor,Tony Nwakaegho in Lagos, the Managing Director of CloudFlex, Mr Remi Adejumo, unraveled the nitty- gritty of Cloud Computing, challenges and the unique selling proportion of CloudFlex as one of the leading cloud organizations advocating for local hosting in Nigeria. Excerpts:
Cloud computing is a household name globally, but leapfrogging here in Nigeria, so how did you find yourself in this ecosystem in Nigeria?
Okay. My name is Remi Adejumo. I graduated as a civil engineer. I have worked in technology for 35 years. I spent the first 10 years working in Nigeria. I spent the next 15 years working in Europe. I worked in the UK, France, Belgium and in Switzerland. I worked for Citibank. I worked for natural gas bank. I also worked for Compaq, and I went to work for UBS in Switzerland, which is one of the two biggest banks in Switzerland. Then I went to Belgium and worked for Carrefour for the second largest supermarkets in the world, the first supermarkets is Walmart, with cart flows across the Francophone world, and even in Switzerland. They have Kafka, and parts of Europe have some powerful thing but I worked for them in Belgium and I also worked for IBM in Belgium. I came back to Nigeria and worked for Resourcery. I was head of applications in resources, and then I went to Eco Bank, and worked as head of infrastructure for two years before I moved across to head, admin, I head an admin for two years in Eco bank. Then I started Cloudflex in 2016.
What was the motive behind Cloudflex?
I started Cloudflex in 2012, and the vision there was the fact that I felt that the world was moving from a CAPEX to OPEX, that the world had to come to a point that people will not want to be buying machines, and we looked at that in 2012, which was long before COVID that has now changed the world. So, we decided to build a cloud platform in Nigeria. And what I’ve seen since then is the fact that in every country you have, there’s a sort of link between international cloud companies and the local cloud companies. So, if you’re going to look at the local cloud companies, especially where that country does not have an international cloud company that has a local infrastructure, one of the key things that people have realised, across the world, not just in Nigeria, is that your personal data must reside in your own country, from legal aspect and everything because if you put something in another man’s country, you’re subject to his law.You put it in your country you’re subject to your laws and I’m talking about it simply. But using the terms, they talk about the data localization, the data sovereignty and things like that. And basically what you’re talking about is that in the event there’s a dispute, in the event that there’s an issue, the regulators have a right and control over the data, and as to what to do with the data. But because of the gap in terms of the duty of our regulators, majority of our data is outside our shore. And so that’s a grave danger for us, because it means that all our data is not controlled by our country, which is quite important, and we felt that it was important to have a local Cloud Platform. Again, there is what you call localization, and when I use the word localization I’m saying, the culture, the way we work is very different from the way Kenyans work. Kenyans work is very different from South Africa, and most definitely very different from the way people in Europe work. So, if you want to set up a company to cater for the Nigerian market, who is better to do it than somebody that is aligned with the Nigerian business practice so that you understand how we are. And when I say that, I mean we have our own characteristics. You know there’s an issue of trust, we are a cash-based society. There’s far more trust in Europe and I don’t mean that as a criticism, I’m just saying the fact. The second thing, look at the culture, if you go to Spain, if you go to Italy, between two and five, they sleep, they have siesta and they come back to work and they work till eight to nine. We don’t do that in Nigeria. So, you’ve got to tailor your business to the practices and to the nature of the people. Also what the international companies do is because they’re spread across the world and they’re catering for the world, they don’t have physical people, they use emails, they use call centres, they use automation. Now, because we were are not so developed the Nigerian business wants to try it out, wants to understand what is he buying, how is he going to use it, how is it best for him within this environment. So because of all that they want to talk to a human being. We provide that which they don’t provide. So what happens now, and what people don’t tell you is that they go blindly and buy services abroad, they start debiting them long before they understand that it was a mistake. So many companies have incurred 1000s of dollars of services that they didn’t use, they didn’t understand, and they didn’t want, but nobody’s going to reverse it for them, you have to pay. So, that’s one of the ways people are losing money. But with us, we will advise and say no, that’s not what you need. This is what you need. And we won’t start billing until you put it at this stage, or we’ve gotten to this point. So, you’re saving a lot of money. The other key thing is that if you look at it the exchange rate, it has gone up, and we’ve had the devaluation of the Naira by nearly 50% in the last six to seven months. So you imagine that somebody who’s buying services in dollars is going to be paying 60% more than what they were paying at the time they made the decision. If they were on a local platform, they would be paying the same money, that is, they would be saving that 60%. So if you look at it in terms of numbers, if somebody is paying 10 million a month, today they’ll be paying 16 million a month. With us, they’ll still be paying the 10 million. So that’s the huge difference between the local platform, and it’s nothing about the international platforms but it’s our local business, our inflation, our exchange rate, and our local conditions, which is why we say we are best placed to serve the local markets because of what we do.
What do you think is the cause of this penchant for foreign services and products among Nigerians even in situation where there are better and cheaper local alternatives?
I think I can give you five reasons. At the regulatory point, I think it’s a lack of knowledge, and I don’t mean to insult them, I’m just saying if you were aware that this exists, and it’s important, it would be part of your requirements. There are technology requirements in the regulatory licencing processes. The biggest regulator in terms of the number of licensees in Nigeria is the Central Bank of Nigeria (CBN) because they licence the bank, the micro finance, the mortgage banks, the finance company, the fintech. But if you look at their requirements, there was no mention of cloud in there. And when you realise that 70% of CIOs in the world are looking at the cloud, I think it’s a huge gap in terms of the fact that they are not looking at that.
They must make a policy to say this is what we expect of licensees that they either have this or have that. It must be mentioned that if you’re going cloud, this must be the type of cloud that you must go. They don’t have that. That’s the first thing. And like they say in the absence of regulation, it is a free for all.
The second thing is a question of awareness. Do we really have platforms in Nigeria? like I said on Twitter, they said, there are no data centres in Nigeria, so people are not aware that there are data centres in Nigeria and that the data centres are even internationally certified. So, it’s not as if someone used corrugated sheet to say I have a centre.
The international bodies that certify data centres in America are the same people that certified the data centres in Nigeria, and the Nigerian data centres meet the same requirements as they do. And if you go and look at our data centres, they have won international awards. The third thing is that people always say, how can you have data centres when we have power problems. And I said, the point is that the power that these people use is an economy of scale. If you’re big enough, your power will be cheap enough, and they’re big enough to be able to generate cheap enough power. The fourth thing is that people believe that Nigeria must be more expensive. We are cheaper than the International platforms. Not only are we cheaper, like I’ve just mentioned to you, we maintain the same cost because our costs are in Naira. All our costs are in Naira so we don’t need to be looking at dollars before we charge.
And the fifth thing is just that idea that if it’s foreign, it’s better.
Is that true?
My response to you is that Nigerians are educated in the same foreign places that the foreigners are educated, the boundaries are broken now. You know, in the 50s and 60s You entered a boat, and it took you two weeks to get to England and get to America to go to school. Today, in five hours, you’re in the UK and in seven hours you are in America. And even in terms of the COVID-19 vaccine, in terms of the forefront of medicine, Nigerians are there. So, we cannot say that we Nigerians don’t have the brains, or have the understanding or have the technical know how to deliver these solutions.
Now in the absence of a law or regulation compelling Nigerian businesses to host their data locally, what are you doing as local service providers to ensure acceptance?
We are in conversation, we are talking to National Information Technology and Development Agency (NITDA), we’re talking to the CBN and others. And you know, the fact that you have a minister, who is knowledgeable in terms of these challenges and all because he was from NITDA and he has a passion for it, they are driving it. But there are lots of things to put in place, it’s not just, cloud computing. We are beating the drum of cloud computing, because that’s the space we operate, there’s still that challenges with connectivity. That’s why you see what Lagos State is doing with the fibre hub. Right of Way has been a challenge for many many years and many state governments, many bodies are trying to resolve that issue. So we’re developing in Nigeria, and I believe we are going in the right direction. Things are being done, it’s not as if we are sitting still. We do have quite a number of customers on the local cloud platforms, but it’s just not enough. In order to create that growth, in order to stimulate that ecosystem of local hosting, we need a lot more, because with a lot more, we will train people, we will grow, we will create more jobs and more money will stay within our shores, because it will be money within the ecosystem rather than money going out and developing other economies. Because as long as we patronise foreign platforms, we are developing foreign economies we’re not developing the local economy.
Since buying cloud service from foreign companies is done online, is the Nigerian government losing tax from these transactions?
Definitely. The government is losing tax because the revenue that should come to local companies is going abroad and because this is digital. You see, this is the challenge with development. The challenge with development is that, how do you tax something on the internet. Because the way you tax, a transaction is you tell the local vendor, add withholding tax, add this and that tax, you don’t have that jurisdiction, if the person is buying directly outside of the country. So, you can’t go to Amazon and say add Nigeria’s tax if a Nigerian company is buying. Rather, Nigerian companies are paying tax to the country where the service provider is domiciled. And let’s not get this wrong, I’m not saying this in a discriminatory way, but I’m just saying that if more was done within, there’ll be more development and we will all be winners. So, some people now say that, why are you asking for these things, that it’s selfish. No, we’re saying this for the economy and for all operators. I’m not the only cloud company in Nigeria. There are several cloud companies. So if you choose to be within Nigeria, you’re still going to make a choice locally as to which local company you’re going to go with. So it’s not about me, it’s a collective sort of discussion, and there’s collective benefit, because if more people are employed here, and there’s more money within the system, everybody benefits. Even you the person that is paying locally, you will benefit from it.
The issue of cybersecurity has been a concern for many stakeholders especially with cloud computing. For you as Cloudflex, how secure is your service?
That’s a really good question. In the light of everything that we see, and everything that’s going on, you hear this all the time. The first thing to say is that we are more secure than putting your data in your own premises. We are more secure. Why do I say that, first of all, when you put your data in the cloud, you don’t know exactly where the data is, or should I say, if somebody has malicious intent, there’s no address location and sites that they can say, let me go and break into it and get it, that’s the first thing that you have. The second thing that you have is that because of the economies of scale, collectively, we spend more money on security than what an individual can spend on security. So because we spend a lot more money on security, we do a lot more on security than you can do. Thirdly, virtualization and cloud computing gives us a more detailed degree of security than you have in terms of physical. So what I mean by that without having to go technical is that you look at the barrier. The common barrier against threats is a firewall. In a physical situation, a firewall is at the edge and you put a firewall at the edge in a cloud environment. We also put several other firewalls behind the edges and all that gives us a lot more security.
So, earlier you mentioned what the CBN should have done to many companies and organisations, but what should be the role of organisations like the Nigerian Communications Commission (NCC), and NITDA in this respect?
Because all of them handle different silos in terms of our economy, I believe there has to be a handshake between them because I don’t believe that they operate on their own. So by having that handshake, they can play their parts and stimulating our economy by encouraging local content. Let’s just put it that way, it’s not just cloud, we want to see local content, because by spending locally, you’re invigorating your local economy, as opposed to just spending out. So, they can say is it possible to use a portion of what you guys are doing locally, as opposed to using it outside Nigeria, is it possible to use Nigerians rather than foreign engineers, is it possible to engage Nigerian subcontractors rather than foreign subcontractors, it’s across the board. The net effect is that we grow our economy by spending more within our economy. I’m not an economist, but I mean it’s a no brainer. So that’s basically what we’re talking about. And if you look at it, CBN’s role is to protect the naira exchange rate and to grow the economy, to keep inflation down. All these things are done by the policies that they do.
So, announcing there’s a granularity in these policies, that from a technology point that we noticed now technology is a big part of development, will change things. Technology was not as big a part of development 20 years ago as it is today, so you can understand, there was not a focus on it 20 years ago, but today more and more focus is on technology. You see, it’s like what you have with the big buzzword today’s digital currency, and suddenly it’s a big issue because, you know, CBN suddenly saw that a huge amount of the Nigerian economy was moving into that thing so they’ve got to pay attention to it, and they’ve got to bring their laws and regulations, to make sure that the country’s interest is protected, and they stimulate local growth by the policies they make within that area.
So we’re saying that in the same way within this area of cloud computing, there must be some regulation or some guidelines that encourages local growth.
Considering the fact that those at the helm of affair at the CBN are mostly economists, would it be easy for them to come up with a policy on technology, which is not their forte?
If you look at the licence regulation, there is a technological part, and the people you have at the CBN are technocrats. There are some very very good people who understand technology in CBN, but all we are saying is that, hurry up and put this in place. It’s too slow at the moment we’re not seeing that progress in keeping up with the development of the world. Cloud has exploded in the last five years, it’s even exploded more in the last 18 months because of COVID. Because we’re working from home, in order to work from home, you’ve got to do a lot more in terms of putting infrastructure in the cloud. Before COVID, a lot of us have never had a zoom. A lot of us never used video conferencing. Today, birthday parties, funerals, weddings, meetings, everything is on zoom and zoom is cloud. So, this is something new, bring the laws and bring the guidelines in line with the evolution of technology.
As MD Cloudflex, what is your company’s projection in the next five years and what challenges do you envisage that may hinder your projections?
Our goal is to be the premier cloud company, not just in Nigeria, but here in this region, because we as Nigeria have influences across both West Africa and across black Africa, and we are looked upon in other countries. So, we want to drive that narrative to make us the premier cloud company in this region. Now, what will it take for us to be there. With or without favourable governmental policies, I believe we’ll still get there because we have a lot going on. And I think that naturally people will see that, because we’re doing a lot to convince companies. We’re not asking the authorities to do our bidding but we are asking that there must be a pro Nigerian agenda, or a pro local agenda within here. You know, that’s what we’re looking at than just having the basic ego to have and like I said to you because we spend more money. We can do a lot more than what individual can do. The other thing that you do in terms of security is that 70% of intrusion is from within. So what I mean by that is that 70% of what goes wrong, is from somebody within the organisation is not without, because without, cannot do anything without collaboration or somebody inside. So, because there’s a demarcation of responsibility, because you have half, I have half. It’s much more difficult to collaborate and to create an intrusion, as opposed to the fact that one man has the keys. One man has the dope. One man knows where everything is so all he has to do is go by himself and he can get there. But because of that demarcation and they’re far more. There’s a lot more granularity in a cloud structure. One man cannot do everything, or get to everything. So, that is so key, that it’s far more secure. And it’s a lot more. It’s a lot more opaque, in terms of knowing weights is where you can get to and how you can reach the company.
So what is the way forward for the local of Cloud hosting in Nigeria?
What we’re saying is that we want a pro- Nigerian agenda because we operate in this economy, we don’t operate in America. So we can’t appeal to the American government and say, Please have a full Nigerian agenda. It’s Nigeria for Nigerians, that is what we’re looking at. And I said that helps us grow. But we’re determined to grow. We’re determined to scale, and we’re determined to create that awareness of Nigeria, and to promote the media in Nigeria, because like I said, we will, there’s a lot that we want to achieve. You see, we are part of it, we’re not the only one, we’re not anything in there. They were a foundation, infrastructure and services in the foundation. I have said that cloud computers are the foundation of the future. So, artificial intelligence, machine learning, Internet of Things, none of them can grow without cloud computing. So, if we want to promote technology, and promote all these things in Nigeria, there’s no way we’re going to do that if we don’t set the foundation within, and we can’t depend on others to grow our foundation. So, that’s the vision, that’s what we’re looking at and we believe that there are a lot of brains here that people who are doing things in here. I met a lady last year who is actually doing voice to text in Nigerian languages, which is a unique thing so that you know because we have this abroad, but nobody is doing it and she is doing doing it from scratch. So now, how do you do that, if you don’t have a cloud platform. How do you do that, if you don’t have collaboration with other components to deliver this so what that means is that to give you a practical example is that woman who speaks the Benin language can go to an ATM. Speaking beneath the hood. Yes, and it can be translated into technology, and she can collect. Now today we don’t have that, and you can’t expect Microsoft to do that for us.You have to put something in place to improve how business is done and how things are done.
NITDA gave some warnings to us about some hackers recently in some way. So, what is your firm doing about this concern in clouding computing?
We actually have a ransomware solution. So what the ransomware solution does is that we work with two companies we work with a company called Veeam and we work with a company called Cloudian, and we actually had a webinar with the two international companies that have created a solution. And what they do is that they create what they call a warm which is write once read many times. So, what it does is that it takes basically ransom ways, that is they take your data, and they encrypt it, and you can’t have access to it. But what we have done is that we take your data, and we back it up daily, and that backup, you cannot encrypt you cannot write, you cannot do anything to. So in the event that your live data is captured, we replace it with the last compressed backup you have so you’re only using information for one day, or you’re not paying anybody around some to get your data back. And we’ve had that product available for more than a year. That’s one of the advantages of cloud and that’s one of the advantages of working with us, because we keep up with the technology and we keep up with the protect prevention to create solutions for companies.
