2011 was a good year for Kenya’s technology scene. Despite a volatile financial atmosphere, the country made huge strides in various aspects of business and consumer technology re-affirming its position as the regional ICT powerhouse.
Notable among these achievements included advancements made in mobile software development, digital marketing and adoption of cloud technology. In addition to this, a growing middle class and renewed marketing strategies saw increased adoption of smart phones and pay TV.
Data from ICT regulators and industry experts indicate that 2012 is set to be an even bigger year for the country not only in matters political, but also on the technology front.According to survey results from Julisha, the national research study commissioned by the Kenya ICT Board, 2012 is the year that the country’s IT market value is expected to cross the $1 billion mark.Business Daily takes a look at the achievements recorded in some of the most active areas in Kenya’s IT scene over the past 12 months and examines what lies in store for the industry in 2012.
Mobile software development
2011 will be remembered as the year that mobile software applications, riding on the buzz generated the preceding year, became recognised as a niche in the local IT market.
At the head of the mobile application gravy-train were young men and women fresh out of colleges and brimming with talent and innovation. The result was astounding creations showcased in several competitions and developers’ meet-ups held in the country.
This saw substantial investment directed into the sector through creation of incubation centres like mLab, NaiLab and Strathmore University’s iLab. In addition to this, InMobi, the second largest mobile ad network in the world set-up shop in Kenya as a further testimony that mobile apps in Kenya are bankable.
The affordability of smart phones gave mobile developers impetus to create even more products for the local market. Smartphone vendors, led by Chinese firm Huawei made a beeline for Kenya’s growing middle class with affordable handset offerings.
Currently, Google’s Android operating system is the most popular platform powering smartphones in the country with the Huawei IDEOS alone reportedly moving 130,000 units this year.
In 2012 the focus will shift towards monetising mobile applications to generate revenue for the thousands of developers most of who, so far offer their products free of charge.
This has already started with the launch of the country’s (and Africa’s) first application store, HewaniLife by tech company Virtual City. HewaniLife seeks to become the regions market place for mobile applications and offers developers a central portal through which they can market their applications.
Similar Apps stores like Google’s Android Market, Nokia’s Ovi and iPhone’s Apps Stores only stock Apps specific to Android, Symbian and IOS phones respectively. This gives HewaniLife a competitive edge because the store includes applications designed to run on Android, Symbian, Windows and Blackberry devices.
In addition to this, HewaniLife also provides local developers a chance to market their applications in other countries.
Local software developers have always stated that the quality of applications produced locally is good enough to be exported successfully in the regional and international markets. Though this has proven true in a few select apps like M-Pesa and Ushahidi, 2012 will be the year that many mobile developers will be called to step up to the challenge of going beyond the borders.
While cloud technology has been in the Kenyan tech scene for the better part of the last three years, it was not until the beginning of this year that corporates began warming up to the idea of adopting Cloud services.
In January 2011, Flexus Technologies entered into a partnership with data services company, Quintica to offer local hosting for their Kopesha Cloud MFI (Monetary Financial Institutions) Core Banking and CRM applications.
Later on in March, MTN Business launched a server virtualisation solution enabling businesses to remotely store data at the company’s offices. Next, Safaricom, Business Connexions and InfoConnect announced cloud services within fortnights of each other.
Analysts now say that 2012 is the year that cloud computing will make more inroads as more firms and SMEs gain confidence riding on the experience of the early adopters of 2011. According to Linda Kamau, software developer for crowd sourcing platform Ushahidi, this year will see more Kenyan firms moving to the cloud.
“The interest and popularity that cloud computing has enjoyed in Kenya over the last one year tells you that this is one aspect of technology to follow keenly in the next few years”, she said.
“More businesses are slowly becoming receptive to it as they understand the concept behind cloud computing. It reduces capital expenditure and you do not have to worry about hardware and software acquisition and maintenance.”
However, while the technology has become popular in 2011, its adoption rate remains low and this is likely to remain the case for better part of 2012, particularly owing to cost and security concerns.
A 2011 Security Study report by Deloitte East Africa shows that 40 per cent of organizations in East Africa are reluctant to adopt cloud computing technology.
The report notes that the reluctance to migrate is linked to security, legislation issues, data privacy and internal issues within the organisations.
“As it is we are just breaking ground as far as cloud computing is concerned and while we expect more businesses to move to the cloud in 2012, the numbers will not be so much as to bring down the cost of the service.”
“If however, more companies start offering cloud services, then competition will see prices reduce but only marginally. However, businesses are slowly realising that you are better off in the cloud and 2012 will clearly see more people subscribe to cloud services.”
Online Marketing takes off
The year 2011 saw the largest ever number of Kenyan businesses going online especially from the SMEs sector as more businesses sought to reach out to the ten million plus Internet users.
According to data from the Julisha survey, the number of .Ke domain names now stands at 18,000 and the number is growing.
In June 2011, the government also joined the online bandwagon by launching the Open Data initiative. The open data portal is one of the first initiatives in Africa and has seen over 400 datasets made public for purposes of research, monitoring and evaluation, policy making and project design.
In the course of last quarter of 2011, Google, Equity Bank, Safaricom and the Kenya Network Information Centre, KENIC launched the initiative dubbed getting Kenyan Businesses Online initiative. The programme allowed SMEs to register for an address under the .kbo.co.ke domain name and establish a website free of charge.According to Google’s regional communication officer Dorothy Ooko, the project has been a success and has managed to register 11,000 domain names in just three months.”If you look at the Zeitgeist findings Google released a few weeks ago you will see that more Kenyans today than ever before are going online to look for information and this number is set to rise in the near future. In the last three months alone we have seen 11,000 websites come up and we are hoping that in coming year this number will triple.”Her sentiments are echoed by Moses Kemibaro, the country manager for Dealfish East Africa who says that SMEs will be the growth drivers for digital advertising in the next year.”Online Marketing has virtually exploded in 2011 and we expect to see even greater activity in 2012. This is because smaller firms which form the bulk of the country’s registered businesses will seek an online presence.”In addition to this, Mr. Kemibaro states that the upcoming general elections will stir up activity online as aspirants to the various positions reach out to their electorate online.
Pay -TV and Digital Broadcasting
The entry of GTV into the Kenyan pay TV market four years ago kicked off an intense battle for subscriptions that saw prices drop drastically. Although GTV pulled out two years later, it left a lasting impact in the market as the dominating player Dstv was forced to review its pricing downward.
2011 saw renewed activity in the Pay TV market as new entrants moved to claw at Dstv’s 15-year old market dominance.
Wananchi Group’s Zuku led the onslaught using a low pricing strategy that bore fruit with 35,000 subscriptions in just five months. Other entrants in the market in 2011 included SmartTV, Pay TV and Star TV that have forced Dstv to offer new value added services to maintain its foothold.
Moving into 2012 and the battle for viewers is set to intensify further if current trends are anything to go by.
Wananchi Group-which owns Zuku, Dstv’s greatest competitor, announced that it is seeking to raise Sh8.9 billion in 2012 from foreign banks.
The investment will be directed towards boosting the company’s services and growing marketshare. In addition to this, its application to the Communications Commission of Kenya (CCK) to be allowed to offer its services through mobile phones is currently being processed. This points to a vicious battle between Dstv and Zuku with consumers set to win big.
2011 also saw a cloud of controversy surround the awarding of digital broadcasting licenses with the tussles playing out in courts and parliament. This comes as the country is expected to make the migration into digital broadcasting in June 2012.
However, analysts are now stating that the country might not make the deadline unless the government makes deliberate moves to make digital broadcasting more accessible to majority of Kenyans.
“As it is there are many loose ends and July is just six months away so more still needs to be done if we are to meet this deadline,” said Mr Kennedy Kachwanya, an expert on consumer technology.
“There are tax issues that need to be addressed because the cost of the set top boxes is expensive owing to the import duty levied on them. If the government were to waive the duty then the devices would be more affordable and more people will be able to migrate.”
Set top boxes convert the signal to allow analog television sets to display digital signals. The majority of Kenya’s 3 million television owners will opt to buy set-top boxes rather than acquire expensive digital television sets which retail at over Sh50, 000.
“Unless the import duty is waived, we might see a situation where the deadline approaches and many Kenyans are switched off because they are still using analogue devices.”
Source: All Africa.Com – 29 dec 2011