Expensive, legal software a conundrum for Nigerian startups

Last Thursday, I chaired a panel at the Nigeria International Technology Exhibition and Conference (NITEC 2016) that focused on how Nigeria can harness cloud solutions.

I had my talking points ready and introduced the panel by speaking on how cloud computing remains both a research question and a market product — but I couldn’t have predicted how the session ended with the panelists.

We argued back and forth on Nigeria’s preparedness for cloud services beyond just using social media, YouTube, email services and the like. There was a consensus among panelists that infrastructure-wise, Nigeria isn’t ready yet for cloud computing as several of these services require constant access to the internet. This is something that’s not yet ubiquitous in Nigeria, owing to quality of service and affordability.

Then the attention gradually turned to the more interesting topic — can Nigerian startups really afford cloud-based solutions?

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Even though Bill Gates and Microsoft are worth billions of dollars, it’s an open secret that they could make much more, ten times or more I believe, if they were able to get every user of Microsoft products to actually pay for it. It’s a no-brainer that a significant proportion of Microsoft products used in Nigeria and probably elsewhere aren’t original — only a few, usually the big companies, are paying for software from Microsoft and elsewhere.

George Ejere, who founded B2BTechNG emphasised that even though cloud-based services such as Office 365 are well-priced in comparison to the previous expensive versions, they’re still very expensive and not within the reach of many Nigerian startups.

“Startup guys know the way to Computer Village in Lagos where they can get software at the cheapest price and will not be interested in paying for cloud services. No matter what you hear elsewhere, the currently available cloud services are very expensive; they are beyond the reach of startups. I know this because I attend the launch of some of these cloud-based services in Lagos. They are always at the big hotels and they are targeted at the large corporates,” Ejere said.

Survival overrules advantages of cloud

Disregarding the argument in favour of genuine cloud services, Terae Onyeje, Country Director of Personal Computing Group, stressed that startups aren’t concerned about using tools that compromise privacy — it is all about survival.

“I don’t care who is looking at my data, all I want is for my startup to survive. So I will prefer tools that will get me up and running as soon as possible. Give me tools that will make it easier for me to start selling my products immediately,” she stressed.

For Ifeanyi Ubah, Chief Executive Officer of Judes Consulting, the paucity of funds has resulted in startups becoming reluctant to use legitimate cloud products and services for their operations, choosing instead to get the very cheap or free ones that are readily available in the market.

Take for instance the Office 365 Business Premium which costs US$12.50 per user a month. This could run into thousands of dollars for a moderately sized tech startup. With bills that high, the preference for cheaper, illegal options gets quite understandable.

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The guy that I pitied most on the panel was Opeyemi Olaniran, PFE Manager for Microsoft West, East and Central Africa – although the “I’m not surprised” look on his face made me realise he wasn’t hearing the arguments for the first time.

Then I remembered several attempts by Microsoft and others to attract startups in Nigeria with their original products. On the sideline, Olaniran told me the company is, first of all, doing great in Nigeria, and is not considering interest in the startup ecosystem a lost battle. If well-played, the cloud could be the realistic way to get startups in Nigeria and beyond to pay for tech products since access will only be for paying users –- no matter how small the fee is.

In the closing remark, I looked around the hall and asked members of the audience (who are mostly startup founders) to signify by raising their hands if they are using original Microsoft Office on their personal computers. I could only see two hands, suggesting that the rest are using illegally obtained applications.

This demographic is really huge and should get the attention of the big tech companies. These firms should be making original products ridiculously accessible since a conscientious startup founder will consider going for cloud services that are very affordable. This should be the next mile to cover in the quest to boost cloud computing acceptance among startups in Nigeria and beyond.