Cloud and data infrastructure provides a pivotal foundation for economic growth and innovation as the world experiences an unprecedented surge in the generation and flow of digital data. Cloud computing technologies now underpin a wide range of real-world uses—from disaster warning to smart agriculture, online education, social media engagement, digital trade, and most financial transactions. However, the development of cloud and data infrastructure is highly uneven: most existing capacity is in high-income economies, risking low- and middle-income economies’ digitization pathways and resultant social and economic gains.
This report analyzes the transformative opportunities and challenges associated with developing robust cloud and data infrastructure markets in low- and middle-income economies. Because only a fraction of global data are currently being processed and driving decision-making, data have untapped potential that can be better leveraged through cloud computing. The report argues that—because of the cost efficiency, agility, security, and innovation afforded by the cloud—governments should facilitate the development of cloud and data infrastructure markets by creating an enabling environment conducive to private investment.
Technological innovations, such as edge computing and artificial intelligence; growing market demand; and regional resource constraints are resulting in a global geographical expansion of cloud and data infrastructure. Network effects, economies of scale, and significant barriers to entry have made cloud markets private sector led and highly concentrated, but low- and middle-income economies can become significant players as these markets expand. The report discusses how comprehensive national digital transformation strategies that embrace cloud computing can create an enabling environment for providers’ entry and for market growth. Data centers, the cornerstones of cloud and data infrastructure market expansion, also require reliable and affordable energy supply along with good broadband connectivity for their operations. The nature of the business environment influences data center investments and includes factors such as political stability, a technically skilled workforce, and accessible land. At the same time, a well-defined regulatory landscape that incorporates data governance safeguards and enablers—such as good data protection, cybersecurity, and interoperability standards—is essential.
Hybrid and multicloud models, which combine public and private clouds from one or more providers, offer flexibility, optimize performance, and enhance resiliency. These new models of cloud services provisioning can help mitigate service failure risks and avoid vendor lock-in, encouraging greater adoption of and demand for cloud services. However, these models also come with the challenge of increased operational complexity and require a high degree of skill and organizational capabilities for optimal use. Strong data portability frameworks and policies to foster competition can allow hybrids and multiclouds to thrive.
Finally, as these markets expand, so does their environmental footprint. The report notes that the pursuit of sustainability requires obligations, incentives, and collaborative efforts. Government policies should promote renewable energy generation and use, encourage energy-efficient practices including sustainable server cooling techniques, and consider the efficient use of physical space for approval of new data centers. When aligned, cloud and data infrastructure markets can drive positive change by favoring renewable energy and can contribute to national sustainability objectives.