Getting ready for the Big Change - Putting the local into African services and applications

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2009 is the year of the Big Change. Cheaper and more abundant international fibre capacity will come to East Africa and 2010 will see the same happen in West Africa. New cross-border fibre connections will tie more countries together: two announcements are in the news sections below. But Africa is in danger of getting all the pipes and hardware in place and missing out on thinking about the user and the services and applications they might use. There is a danger of it becoming one hand clapping in an empty room. Russell Southwood looks at how services and applications will need to be local to drive higher levels of use.

The CEO of Nigeria’s Socketworks, Aloy Chife could be heard complaining this week that corporate customers are increasingly buying internationally branded software from the likes of Microsoft and Oracle in preference to locally generated products. He said the danger was that it would undermine innovation and the growth of the local software development community in the country.

The difficulty for local software providers is that multinational corporates are increasingly implementing the same software as their corporate headquarters. They need to deliver management information in the same way as their parent company does globally and manage their human resources in a uniform way. As the new international fibre capacity becomes available, ERP software provided by the likes of Oracle and SAP can increasingly be operated online.

Large regional corporates like the banks in Nigeria might opt for potentially cheaper local software but what IT manager wants to buy software for which there is a limited user base only to be found in one country. In olden times before the arrival of Microsoft, there was a corporate saying: no-one got fired for buying IBM. This probably also covers how the larger African corporates react to local software. Local African software companies serving corporates do exist and this is not an attempt to talk down their chances but the going is getting tougher.

Africa’s software developer ecology is very fragile because its markets are very small and the majority of revenue comes from Government (usually donor-funded) and corporates. As a result, it has little of the academic software research “back-story” that has supported the development of successful open source software elsewhere. The generosity and track record of the Shuttleworth Foundation is considerable but it stands out in a fairly empty landscape. There are very few African software developers specialising in services and apps for individuals. There’s few places which have the kind of creative buzz about software opportunities that will turn the near-impossible into the probable.

Now here’s the dilemma: how are Africa’s software developers going to make much-need local apps and services from this rather unpromising starting position? When all this cheap international bandwidth arrives, if companies pass on the savings to users, then the number of Internet users - particularly on mobiles - will increase rapidly and should reach a “critical mass”. These users will be hungry for content that they can use that fits the pattern of their lives. So South Africa has become the eight largest user of Facebook and things like You Tube, Blogger.com and Facebook already feature in the Top 10 sites in the African countries analysed by Alexa.com

The next stage in the process is usually the localisation of some part of this pent-up user demand. Two things start to happen: sites like Gumtree localise and then absolutely local versions of these types of sites get set up. In India there are sites like Ibibo.com and Indyarocks.com The same has happened in Latin America where the use levels are high: two examples are Argentina’s Sonico.com (2.9 million users) and Brazil’s 8P.com.br (1.4 million).

Some are in local languages but others are in English as this provides a “critical mass” of users that might not be available in the more limited pool of those who speak that language and use the Internet.

This is why a relatively “unflashy” service launched this week in Kenya may be the first swallow of spring. The Symbiotic Media Consortium has released Sembuse, what it claims is East Africa's first mobile social network and content platform, where users can purchase stock information, news and videos. (see Web and Mobile Data News below).

Sembuse allows users to communicate cheaply at 50 Kenya cents (US$0.006) per message, up to 1,000 characters, using the SMS (Sembuse Messaging Suite) within the Sembuse network. It has steered clear of using the Internet because it wants to create an immediate large user base. Fair enough, but if both it and the Internet are successful, there is no barrier to offering it more widely. It supports the use of Swahili. Whether or not this particular service is successful is not really the point because it will be the first of several contenders in Africa’s larger mid-scale markets.

But here’s the problem, as expressed by Symbiotic Media’s CEO Mbugua Njihia: "There exists a disconnect within the financing circles because of lack of local venture capital firms or angel investors; it was indeed difficult to find a venture capital firm or individual investor willing to cater for the costs of development and marketing Sembuse."

As the market transitions from making money out of selling high-price bandwidth to corporates to bandwidth becoming a commodity that enables a services and applications market for individuals, all those currently playing in the market need to focus on how to produce the services and apps that will create the new market. Africa needs not one M-Pesa-style service but many that cater for the life that is lived by Africans on the continent.