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A Comparative And Cost Effectiveness Analysis Of Cloud Computing In Nigeria

Electrical Electronics Engineering | Industrial Physics | Physics

A comparative and cost-effectiveness analysis of cloud computing involves evaluating the efficiency and economic viability of cloud-based services in contrast to traditional on-premises infrastructure. Cloud computing, a paradigm shift in IT provisioning, offers scalability, flexibility, and accessibility of computing resources over the internet. By comparing the performance, scalability, security, and operational costs of cloud solutions with in-house data centers or legacy systems, organizations can make informed decisions regarding resource allocation and infrastructure investments. Assessing factors such as total cost of ownership, operational expenses, capital expenditures, and return on investment, enables stakeholders to optimize IT spending and enhance business agility. This analysis considers diverse aspects of cloud deployment models, including public, private, and hybrid clouds, to determine the most suitable approach tailored to organizational requirements and budgetary constraints. By leveraging comprehensive insights derived from this analysis, businesses can streamline operations, drive innovation, and achieve sustainable growth in today’s dynamic digital landscape.

Cloud computing is changing how technology as we know it. It is changing the way that organizations operate. It solves the problems related with the traditional computing. Cloud computing has opened new ways of using computing resources and capabilities.

Cloud computing has been advantageous to Small and Medium-sized Enterprises (SMEs), but still numerous SMEs have not adopted cloud computing to delve into its appealing benefits. Asia and Africa vary notably regarding their innovative capability. Asia has been competent to advance and sustain world leadership in technological innovations whereas Africa has not developed significantly in these terms. A seldom comparative study has been implemented on the reasons for the innovation gap between these two continents. This article examines and compares the cloud computing adoption from a Geo-regional framework; Asia and Africa. A comparative study is used to organize the findings from China in Asia, and Nigeria in Africa. The article identifies the probable benefits, usage of cloud computing and level of cloud computing adoption amid SMEs in Nigeria and China. The paper explores the margin that subsists amongst the level of cloud computing adoption in SMEs of these two countries and specifies challenges particular to each country intercepting the complete cloud computing adoption and proposes solutions for Nigerian SMEs to beat these challenges. Furthermore, the article contributes proof-supported intrusion for cloud service providers, the government and the capitalism to enhance the cloud computing adoption amid SMEs to eventually determine the enterprises for the probable financial advantage.

LIST OF ACRYOMS

BCX Business Connexion Limited

CEO Chief Executive Officer

DIT Diffusion of Innovation theory

Dr Doctor

EC Compute Cloud

ICT Information Communication Technology

IDC International Data Corporation

IPPIS Integrated Payroll and Personnel Information System

IT Information Technology

MSc. Comp IT Masters In Computer Information Technology

MTN Mobile Telephone Network

NCC Nigeria Communication Commission.

NIST National Institute of Standards and Technology

NITDA National Information Technology Development Agency

PC Personal Computer

PHD A Doctor of Philosophy

Prof Professor

SMEs Small and Medium Enterprises

UTAMU Uganda Technology And Management University

UTAU Unified Theory of Acceptance and Use of technology Theory

FIRS Federal Inland Revenue Services

CSP Cloud Service Providers

UTAUT Unified Theory acceptance of use technology

EC2 Elastic Compute Cloud

Saas Software as services

Paas Platform as services

Iaas Infrastructure as services

AWS Amazon web services

Maas Messaging as a service

Spaas share points as services

Laas Linc as a service

GBB Galaxy backbone

TABLE OF CONTENT

COVER PAGE

APPROVAL PAGE

DEDICATION

ACKNOWLEDGEMENT

TABLE OF CONTENT

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

1.2 PROBLEM DEFINITION

1.3 AIM OF THE PROJECT

1.4 SCOPE OF STUDY

1.5 RESEARCH QUESTIONS

1.6 JUSTIFICATION

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 INTRODUCTION

2.2 EVOLUTION OF CLOUD COMPUTING

2.3 CLOUD COMPUTING PARTICIPANTS

2.4 CHARACTERISTICS OF CLOUD COMPUTING

2.5 CLOUD COMPUTING SERVICE MODELS

STATE OF CLOUD COMPUTING IN NIGERIA

2.7 REVIEW OF RELATED WORKS

2.8 DEFINITIONS OF CLOUD COMPUTING

2.9 CHARACTERISTICS OF CLOUD COMPUTING

2.10 BENEFITS OF CLOUD COMPUTING

2.11 CHALLENGES OF CLOUD COMPUTING

2.12 CLOUD COMPUTING IN DEVELOPING NATIONS

2.13 CLOUD COMPUTING IN AFRICA

2.14 CLOUD COMPUTING IN NIGERIA

2.15 CHALLENGES FACING ADOPTION OF CLOUD COMPUTING IN NIGERIA.

2.16 SOLUTION TO THE CHALLENGES

CHAPTER THREE

METHODOLOGY

3.0 METHODOLOGY

3.1 INTRODUCTION

3.3 SOURCE OF DATA

3.4 INFLUENCE OF SMES TO NATIONAL GROSS DOMESTIC PRODUCT (GDP) IN CHINA AND NIGERIA

3.5 ADOPTION OF CLOUD COMPUTING BY SMES IN CHINA AND NIGERIA

3.6 STRUCTURAL GAP BETWEEN CLOUD COMPUTING ADOPTION AND USAGE IN CHINA AND NIGERIA

CHAPTER FOUR

4.1 ADVANTAGES FOR CLOUD ADOPTION IN CHINA AND NIGERIA

4.2 CHALLENGES FOR FULL ADOPTION IN CHINA AND NIGERIA

CHAPTER FIVE

5.1 CONCLUSION AND FUTUREWORK

5.2 REFERENCES

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Over the last decade, cloud computing has been a major agenda in the computing field. Cloud computing is the on – demand delivery of computer system resources as a service over the network. [Buyya, 2009] The features of cloud computing, including scalability, flexibility and pay-per-usage model [Dahiru A. A, 2014] has the potential to influence the various aspects of social and economic activities globally.

Cloud computing offers enormous benefits to all organizations and enterprises, including SMEs [Benton D, 2010]. Small and medium Enterprises (SMEs -are the enterprises in which amount of personnel are less than certain limits, and they are control the data of high sensitivity. Some cases of sensitive data which is controlled by SMEs are: data of intelligence agencies and government federal, financial data of companies, purchase contracts, company databases, de-identified research data, bank associated data like bank accounts, pin, passwords, balances and dealings, trade secrets, email accounts, drug formulas, accounting records and source codes [Subhas Chandra, 2011].

The adoption of cloud computing is growing rapidly as it allows enterprises to concentrate on their essential business events, and, thus, efficiency is improved [Garrison, 2012]. An adequately adopted cloud provides a plenty of benefits to the enterprises such as unlimited computing power, easy access of data and applications, lower IT expenditure, and build up competitive advantage. Recently, SMEs has shown a great concern in including cloud computing to their overall Information technology (IT) strategies. A recent report by Mckinsey [Avrane-Chopard, 2012] on the adoption rate of cloud service by SMEs informed that, 70% of SMEs have formerly bought at least two cloud service, and 40% have bought six or more cloud services. Nevertheless the touted benefits of cloud computing, its adoption and implementation in SMEs is faced with many challenges including national and international regulations, shortage of industry-specific conformism to principles, security and privacy threats [Kern Thomas, 2012]. Due to these challenges, some enterprises are quiet anxious around the threats of shifting business-critical applications to the cloud.

1.2 PROBLEM DEFINITION

There is need for guidance on how to systematically increase the uptake of cloud computing in developing countries given the enormous benefits of the technology.

Use of cloud computing is growing day by day at the expense of traditional IT service providers (Linthicum, 2013). It came of overcome the traditional means of computing. Not much has been studied about solutions for these challenges and or more importantly how adoption of cloud computing can be adapted in developing countries. The aim of this research is to examine the extent of cloud computing adaptation in the SMEs of government of countries with the case study of Nigeria and China.

1.3 AIMS AND OBJECTIVES

To design a comparative analysis of cloud computing in terms SMEs in Nigeria and China. The specific objectives of the study are:

To review systematically the extant literature regarding adoption of cloud computing amid SMEs in Nigeria and
To recognize the probable benefits and usage of cloud computing amid SMEs in China and

To contrast the level of cloud computing adoption amid SMEs in Nigeria and

To determine main problems critical to complete adoption of cloud computing in the two
To propose solution for Nigerian and Chinese SMEs to overcome these

1.4 SCOPE OF STUDY

The research is intended to examine the state and cost effectiveness of cloud computing in developing countries using Nigeria and China as case study and how its uptake can be increased in such countries in order for them to benefit more from the advantages cloud computing offers.

1.5 RESEARCH QUESTIONS

The research questions for this study include:

What are the requirements for increasing the uptake of cloud computing in SMEs in developing countries?
How can the requirements for increasing the uptake of cloud computing in SMEs in developing countries be realized?
How can improvement in the uptake of cloud computing in SMES in developing countries be validated?

1.6 JUSTIFICATION

This study will provide an understanding of the benefits, status, and need on how the uptake of cloud computing in government institutions in developing countries can be increased. This will benefit both potential consumers and providers of cloud computing services as well as the general IT and research community.

he results will also be useful to the governments in developing countries that may have plans of rolling out Cloud Computing infrastructure and or services. It will also benefit government institutions responsible for formulating policies regarding technology innovations and adoption.

1. Introduction to Cloud Computing:

Cloud computing refers to the delivery of computing services, including servers, storage, databases, networking, software, and more, over the internet. These services are typically provided by third-party providers known as cloud service providers (CSPs), who manage and maintain the underlying infrastructure. Cloud computing is characterized by its on-demand availability, pay-as-you-go pricing model, and scalability.

2. Comparative Analysis:

2.1 Scalability:

Traditional Computing: In traditional computing environments, scaling infrastructure to accommodate fluctuating workloads can be challenging and time-consuming. Organizations often need to provision additional hardware, which involves upfront costs and lead times.

Cloud Computing: Cloud platforms offer elasticity, allowing organizations to scale resources up or down based on demand. This enables businesses to quickly respond to changing needs without incurring significant upfront investments.

2.2 Flexibility:

Traditional Computing: On-premises infrastructure is typically designed to meet specific requirements, making it less flexible in accommodating new technologies or adapting to evolving business needs.

Cloud Computing: Cloud services provide flexibility by offering a wide range of computing resources and services that can be easily customized and adapted to suit diverse workloads and applications.

2.3 Cost-effectiveness:

Traditional Computing: Traditional IT infrastructure requires substantial upfront capital investment for hardware, software licenses, maintenance, and staffing. Additionally, organizations may over-provision resources to handle peak loads, resulting in underutilization and wasted costs during periods of low demand.

Cloud Computing: Cloud computing offers a pay-as-you-go pricing model, allowing organizations to pay only for the resources they use. This eliminates the need for upfront capital expenditure and enables better cost optimization by scaling resources according to demand.

2.4 Security:

Traditional Computing: With traditional on-premises infrastructure, organizations have full control over security measures but are responsible for implementing and maintaining them. This can be resource-intensive and may require specialized expertise.

Cloud Computing: Cloud service providers invest heavily in security measures to protect data and infrastructure. However, some organizations may have concerns about data privacy and compliance when storing sensitive information in the cloud.

2.5 Reliability:

Traditional Computing: The reliability of on-premises infrastructure depends on the organization’s ability to maintain hardware, software, and network components. Downtime due to hardware failures or maintenance activities can impact business operations.

Cloud Computing: Cloud providers offer robust infrastructure with built-in redundancy and failover mechanisms to ensure high availability. Service-level agreements (SLAs) guarantee uptime levels, and providers typically offer 24/7 technical support to address any issues promptly.

3. Cost Effectiveness Analysis:

3.1 Total Cost of Ownership (TCO):

Calculating the TCO involves evaluating all costs associated with deploying and maintaining IT infrastructure over its lifecycle. This includes:

Initial Investment: Hardware, software licenses, networking equipment, and infrastructure setup costs.
Operating Expenses: Maintenance, upgrades, energy consumption, and staffing costs.
Cloud Services Costs: Subscription fees, data transfer fees, and additional services (e.g., backup, disaster recovery).

Comparing TCO between traditional computing and cloud computing requires careful analysis of these factors over a specified time period, taking into account factors such as depreciation, scalability, and utilization rates.

3.2 Cost Optimization Strategies:

To maximize cost-effectiveness in cloud computing, organizations can implement various strategies:

Right-sizing: Adjusting resource allocation to match workload requirements, avoiding over-provisioning.
Reserved Instances: Committing to long-term contracts or reserved instances to benefit from discounted pricing.
Automated Scaling: Implementing auto-scaling policies to dynamically adjust resources based on demand, minimizing idle capacity.
Cloud Cost Management Tools: Utilizing cloud cost management tools to monitor usage, identify cost inefficiencies, and optimize spending.

4. Case Studies and Real-world Examples:

4.1 Netflix:

Netflix, a leading provider of streaming media services, migrated its infrastructure to the cloud to handle massive scale and global reach. By leveraging cloud computing, Netflix achieved cost savings, improved scalability, and enhanced resilience to meet growing demand for its services.

4.2 Airbnb:

Airbnb, a platform for booking accommodations, relies on cloud computing to support its dynamic workload requirements. By utilizing cloud services, Airbnb can scale its infrastructure based on user demand, optimize costs, and focus on innovation and growth.

5. Conclusion:

Cloud computing offers significant advantages over traditional computing models in terms of scalability, flexibility, cost-effectiveness, security, and reliability. By leveraging cloud services, organizations can achieve greater agility, reduce capital expenditures, and focus on core business objectives. However, careful planning, optimization, and risk management are essential to maximize the benefits of cloud computing and ensure cost-effective operations.

In conclusion, while cloud computing may not be suitable for every use case, its benefits outweigh the drawbacks for many organizations looking to modernize their IT infrastructure and adapt to changing business requirements. As technology continues to evolve, cloud computing is expected to play an increasingly central role in driving innovation and competitiveness across industries