Llew Claasen
Llew Claasen

Unpredictions for the SA web in 2008

It’s quite possible that I’m no good at short-term industry predictions and that this post is a ruse to avoid them, but my built-in BS filter (at least partially informed by a healthy serving of Nassim Taleb and Phil Rozenzweig) tells me that if you took a big enough sample of the informed and considered predictions for 2008 made by intelligent Thought Leader contributors like Jaxon Rice and add to this enough of the uninformed, misguided or just plain sensational predictions by some bloggers and journalists that flail around the web space, then I contend that you will find that there is at best a weak correlation between their level of successful prediction come end 2008 and their skill, intelligence or industry experience.

Annual industry predictions are little more than bets where an observer can only ever have an inaccurate conception of the odds based upon the incomplete information available to him and his own prejudices and biases. Additionally, he has no way of meaningfully influencing the outcome (unless you’re actually the CEO of Google or Microsoft, in which case you probably wouldn’t be making a prediction, but rather a statement of intent, wouldn’t you?). I don’t value most of these predictions in the news media and in the blogosphere, because they are noise masquerading as interpretation or fact.

The international press and blog coverage of Clinton vs Obama in Iowa and later in New Hampshire is a classic example of this noise in action. My tainted summary goes like this: first Clinton was going to walk Iowa, but then Obama made all the right sounds and attracted people who had never before showed an interest in politics and won Iowa. His Iowa success gave him so much lift that it suddenly looked inevitable that he was going to walk New Hampshire too. It was all over for Clinton. She was going to withdraw from the presidential race, but then she came back fighting, giving a speech on a soapbox in a parking lot, and the next day she took the New Hampshire primary by two percentage points.

It took almost a week’s constant and pervasive press, TV and online coverage to unearth two facts: Obama won in Iowa, but Clinton won the New Hampshire primary and on the face of it is the favoured Democratic Party candidate. Thank God I’m no newspaper man, because there would be a lot less advertising space to make money out of!

If you think I’m exaggerating, then bear in mind that there are more search results on Google for predictions 2008 (78 800 000 on January 9 2008), than there are search results for world hunger (4 850 000), Third World poverty(3 560 000) or world peace (36 400 000). Just maybe we’re expending an awful lot of energy talking about the wrong things.

Noise and elusive odds all considered, I’m not going to make any predictions for the South African web space in 2008. What I am going to do is deal with certainties in 2008, and by that I don’t even mean the things are that are planned to occur in 2008, but rather three of the most important things affecting the South African web that will definitely not be features of 2008.

  1. High-speed internet access
    I wish I were a techie, because then I would understand how it’s possible that Telkom can market and sell to me broadband of “up to 4Mbps” when to my knowledge I have never, ever managed a connection of more than 1.1Mbps with my Telkom ADSL internet connection. In fact, I’ve just tested my connection at Speedtest.net, and I managed a whopping 56kbps download speed, so I retested it and managed 116kbps! Do I really need to tell you that on average even Morocco (1 132kbps) and the top eight South American countries by download speed (read: rather backward, developing countries) have faster internet connections than us (868kbps), or is that just being nasty? It’s a little difficult for South Africa to be taken seriously as a web technology innovator when it’s getting bitch-slapped by the girls on the block.
  2. Pervasive internet access
    At the end of 2007, estimates of the size of the South African internet user base vary between 3,85-million and 5,1-million, or approximately 10% of the population. By some estimates, growth in the internet user base between 2007 and 2008 will be no more than 4%*. By the same estimates, this number has averaged no more than 3% per year between 2004 and 2007*. Morocco (20%, 6 100 000 users), Tunisia (12,5%, 1 294 900 users), Argentina (34%, 13 000 000 users), Brazil (21%, 31 194 000 users), Chile (42,4%, 6 700 000), Colombia (15,8%, 6 700 000), Peru (21,1%, 6 100 000 users), Uruguay (33,6%, 1 100 000 users) and Venezuela (13%, 3 354 900 users) all have higher internet penetration rates than South Africa (stats unverified, apparently from Nielsen//Netratings).

    Additionally, Telkom still controls the SAT3 undersea cable connection to the rest of the world, which will keep the cost of broadband connectivity prohibitively high, with competitors Seacom and EASSy only coming online in June 2009 and later in time for the 2010 Soccer World Cup, respectively. This makes internet connectivity unbelievably expensive compared with international standards, which is already widely documented.

    * Many thanks to Arthur Goldstuck at World Wide Worx for these statistics.

  3. Reliable electricity supply
    As the saying goes, you can’t complain about the quality of Eskom’s service, because there is no service. Whether through the government’s bureaucratic bungling, poor Eskom planning or unexpectedly high economic growth, South Africa has a chronic electricity-supply shortage. It seems that demand for electricity during December 2007 exceeded supply by 2 000MW, or half of a large power station, and with current and projected growth in demand for electricity of 4% per year, this situation will become increasingly dire and is unlikely to improve for the next five to eight years. Look forward to living your life between rolling blackouts.

So why are these three things the most fundamental challenges that the South African web faces?

The internet has enjoyed such tremendous growth in the developed economies because high-speed broadband connections enable richer online experiences. Access to email and a web consisting of text and sparse low-resolution images didn’t make generations X and Y abandon the television, but MySpace and YouTube did. Web TV and variations around that theme are supposed to be the next big thing in 2008 with a number of respected television writers and producers breaking out and creating purpose-built video content for delivery over the web, including web-only shows such as Quarterlife and Prom Queen, and even full-scale replacements for television like Joost, which has its own array of channels.

You’ve never heard of these shows or of Joost? Well, don’t be so surprised: our limited internet connection speeds largely keeps the South African web chained to Web 1.0. Now you could put on your 2008 prediction hat and tell me that large-file video applications that require high-speed connections are not going to become widely adopted elsewhere during 2008 either, but that isn’t really the point, is it? In South Africa we don’t even have a fighting chance.

Pervasive internet access is a crucial element of changing the culture of a country to one that embraces technology and, more specifically, online commerce. If we have only 10% of our entire population of approximately 50-million people capable of connecting to the internet, then we don’t have enough people who can appreciate first-hand the value created by web applications and online commerce.

Without a large and hungry internet user base, it’s near to impossible for most local web commerce applications to scale of economically profitable levels, web commerce innovation is stymied by a lack of interest and, ultimately, web commerce skills languish behind those in developed economies. High internet connection costs make web businesses that should be economical during the start-up phase uneconomical, and depress the uptake of broadband internet connectivity by both potential upstart producers of web commerce applications and the South African internet user base overall.

The problems with not having a reliable supply of electricity is so fundamental that I could spend volumes talking about the negative impact that it has on the development of the South African web. I’ll leave your imagination to that task and keep it brief and largely anecdotal. It is unreasonable to expect international web companies or even local web entrepreneurs to soldier on and set up local operations when they are faced with the very real prospect of daily interruptions to their work schedules as a result of load-shedding. Without power, web businesses can’t function at all.

According to my sources, Amazon has opted against expanding its local operations in South Africa (it created and support the EC2 cloud, which should have been a major win for us as cloud computing becomes more common) and Google has decided against establishing a local engineering operation despite the abundance of keen technologists in Cape Town. My international partners laugh at me when I tell them that I won’t be able to get them information they request right away, as I don’t have power!

Companies that I have been involved with have sent their staff home for the day on more than one occasion, because load-shedding made it impossible for them to operate. Most industries would just have to put up with it, but it is quite conceivable that the most talented South African technologists and web entrepreneurs will simply move their web business operations offshore.

The ultimate result of this sad state of affairs is that my answer to the question “What is going to happen in the South African web in 2008?” is a resounding: “Not very much!” We’re treading water in 2008, folks, so pray for a more exciting 2009. My apologies for soap-boxing this early in the new year, but somebody has to be the contrarian and I’m not certain that Ronald Suresh Roberts knows or cares much about the web!

Best wishes for 2008!