Hosting platforms that are efficient and cost-effective are sort after by organizations. Organizations look for the best to host their content and make it easily accessible.
Although most businesses in Nigeria have these expectations, many still opt for foreign data centers. These service providers that most time cost them the speed and cost-effectiveness they look for.
There are various downsides of using a foreign service provider. Upload and download could take more time. The data service is quite far from the business that stores and accesses the needed data.
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Another major issue is data sovereignty, it is not clearly stated if it is the business home country or the host country that has rights over the data.
Fluctuation in currency exchange rates is another problem businesses that use foreign data centers cope with. they have to pay for foreign hosting services in foreign currency. If an organization in Nigeria decides to host its content with a United States cloud firm, it will pay in dollars.
According to the Nigeria Internet Registration Association (NiRA), the country looses over ₦60 billion to foreign web hosting every year. As of 2016, domain names registered was less than 2% in Nigeria.
This can prove to be very problematic. Most Nigerian organizations will continue to face fluctuations in foreign exchange. This will occur if they continue to rely on foreign data centers.
If there is an increase in the value of dollars, they will spend more to pay for these services.
Let us take for instance, if company A in Nigeria hosts its website with a hosting firm B in the United States. The Nigerian company A pays the hosting firm B $700 every year.
If the current dollar to naira exchange rate is ₦360 to $1, the Nigerian company will be spending at least ₦252,000 on hosting in one year.
But if the naira slumps and the exchange rate becomes ₦400 to $1, the Nigerian firm will have to pay ₦280,000 in hosting fees in a year. That is an additional ₦28,000.