Businesses in East Africa are spending high capital investment in technology software and hardware that can be avoided through the new model of leasing technology solutions, says a study by Deloitte consulting group.

As a result, providers of cloud computing solutions like Microsoft, Safaricom, Deloitte and Sofgen are targeting the regional market to tap into the growing demand for cloud technology solutions from a growing informal sector.

Cloud computing is offering an opportunity for SMEs to be efficient and competitive. It will also make it cheaper for them to do business.

Financial SMEs like micro credit institutions, savings and credit societies and insurance players are particularly set to benefit from cloud computing because of the often high costs of their operating software that they can now lease through cloud computing providers.

“Some of these financial companies suffer a lot from fraud because they are unable to invest in modern software, but with cloud systems, they are able to lease the same and therefore deter fraud,” said Andrew Mulei, chairman of Sofgen.

For example, even the smallest microfinance institution can afford the most recent core banking system that they can pay for based on the number of customers or the value of their transactions, thanks to the facilitation of leasing for such software through cloud computing.

Shared software system enables free upgrading meaning the users enjoy the most up to date features. It also eliminates redundancy costs such as wages of people employed to handle hardware and software breakages.

Microsoft Office 365, for example, only requires SMEs to have a device and a connection. It is expected to help in increased automation of businesses at a minimum monthly subscription rate of$4-$6.

“The essence of this service is to help the youth create wealth through SMEs. Young people can set up companies using this public cloud and start transacting around the world faster than they it would take them to register a company locally,” said Louis Otieno, the general manager for Microsoft East and Southern Africa.

Source : theeastafrican.co.ke