> WHY IN HELL IS EUROPE, WITH ITS INCREDIBLE AMOUNT OF AVAILABLE RESOURCES NOT DOING TH SAME?!?
Probably because Euro is much more stable (relative to dollar) than Naira (the official currency of Nigeria). So european companies don’t feel the need to compromise for an inferior service (this claim comes from the article linked in the OP, not from me) or bother creating their own one.
If EU countries had an ongoing inflation rate of 30%+, which would result in GCP/AWS costs for european companies go up insanely every year (without GCP/AWS increasing pricing on their end and usage staying constant), I bet EU would consider switching to a cloud provider that accepts EUR instead of USD as well[0].
That’s not a good problem to have at all.
0. I have no idea if GCP/AWS accept payments in EUR. So that statement was written with a scenario in mind where GCP/AWS only accept USD (to draw an analogy with the situation in Nigeria).
> If EU countries had an ongoing inflation rate of 30%+, which would result in GCP/AWS costs for european companies go up insanely every year
Inflation would mean that the nominal revenues of EU companies would also increase to the same extent. Thus, the affordability of the foreign service would, ceteris paribus, remain the same.
> Inflation would mean that the nominal revenues of EU companies would also increase to the same extent.
Only if their customers are not from EU (aka their customers pay in USD instead of EUR) or if the company increases pricing to match the inflation on a regular basis (while managing to not lose any customers).
With the first scenario being a very specific edge case, and the second scenario being borderline impossible, I don’t see the inflation being a nothingburger here. Otherwise, the Nigerian companies wouldn’t care about the inflation either.
> Only if their customers are not from EU (aka their customers pay in USD instead of EUR) or if the company increases pricing to match the inflation on a regular basis (while managing to not lose any customers).
Under standard conditions (nothing else then inflation matters), is the same for the domestic market. If we have x % yearly inflation, it means that the exchange rate at the end of the year is x % "higher", meaning the costs for the company are x % higher, but likewise the prices for companies's goods and services are x % higher and thus their revenues. So its profit margin (in percentage of its costs) remains the same.
> Otherwise, the Nigerian companies wouldn’t care about the inflation either.
The real problem is not inflation per se, but accelerated, unpredictable inflation. This ruins the exchange rates of a currency, as it is a risk that is not easy to manage. Due to these unfavourable exchange rates, companies from such countries are exposed to greater cost pressure when they purchase services in countries with a hard currency.
Calm down. This is just a single (private - so no public data or real numbers - just what they claim) Indian company (unsupported by the Indian Govt in any way shape or form) doing a decent job. It has nothing to do with political will.
You say it takes political will, but this isn’t a political decision by African companies. The first three bullet points tell you what’s going on pretty well: African companies are choosing to use a more affordable competitor that they can use local currencies to pay for even though the product isn’t quite as good (per the article, I have no horse in this race myself) and doesn’t have the same level of developer community support. It’s an affordability tradeoff, which is valid, but fundamentally it didn’t take any crap like the political will to do it, just buying decisions at the corporate level.
And if you dig down, all you’re really getting is that Google and Microsoft are the established players but Zoho is making a nice business for itself at their expense with African startups.
What is it that Africa does? Choose the cheaper alternative they can pay with their own currency?
How can the EU (Remember, Europe also has large parts of Russia and other countries) do to mimic that? Become much poorer and change the public currency to something Google does not want.
Lower vages in developing countries have always been one of the major drives for outsourcing. Without market ristrictions, as long as there is no other advantage that an industrialised country can provide, the business will in the long run move to the developing country.
It does seem telling that I don't use a single Europe-based tech service that I know of, even a free one. In fact the only tech companies I can think of, some game developers, are in the UK, no longer in the EU.
do what exactly? it doesn't seem like these African startups are choosing it because of some regulation based on "political will". they're choosing Zoho because it's cheaper and they can use their currency. if they were richer and Google supported their currency (like most EU startups) they would probably choose Google.
The problem is EU does not want home-grown ecosystem. EU wants BigTech they can do business (as well as „business“) with.
Big old businesses are very reliant on export to certain markets. E.g. German car industry in China. Thus there's a big push to not have protectionist policies due to fear of retaliation. But such approach does not help to build local ecosystems in newer niches.
> Could you imagine EU doing to TikTok what US did?
Since they seem to have no qualms picking fights with big US tech when they run afoul of their regulations...yes. Yes I can absolutely imagine that.
Plus, establishing a homegrown market is not "protectionist politics". It's allowing for, and enabling, competition, which, according to every proponent of capitalism, is a good thing (which is funny, because capitalisms systems actively enable and encourage to stifle competition as muc as possible, because it threatens the bottom line of established players. But I digress).
What is China going to be (officially) angry about? That the EU takes their own money to fund startups and alternatives, in, and for, their own home market?
> Since they seem to have no qualms picking fights with big US tech when they run afoul of their regulations...yes. Yes I can absolutely imagine that.
Meh. It's just squeezing some cash.
> Plus, establishing a homegrown market is not "protectionist politics".
It's 100% protectionist politics once you start doing more interesting things :)
> It's allowing for, and enabling, competition, which, according to every proponent of capitalism
Ah yes. That's exactly what modern europe is known for :)
> What is China going to be (officially) angry about? That the EU takes their own money to fund startups and alternatives, in, and for, their own home market?
China doesn't need to be officially angry. They can simply retaliate by forcing EU-related companies out. Sort of like they already do, just more strictly. Which is funny that China has all sorts of protectionist policies, but what if West retaliates... All hell breaks loose.
> It's 100% protectionist politics once you start doing more interesting things :)
So its aggressive economic politics now if country A buy less from country B, by making the stuff it needs itself? That doesn't compute.
> They can simply retaliate by forcing EU-related companies out.
Sure, they can do that. Only, given that the EU is their most important trading partner, and forcing companies out would probably spiral China into a recession, destroying decades worth of economic growth in the process, I somewhat doubt that China is willing to shoot itself in the foot just to throw a tantrum.
> So its aggressive economic politics now if country A buy less from country B, by making the stuff it needs itself? That doesn't compute.
Yes it is. The problem with modern manufacturing (and services to lesser extent) is not to build something, but find a market for it.
> Sure, they can do that. Only, given that the EU is their most important trading partner, and forcing companies out would probably spiral China into a recession, destroying decades worth of economic growth in the process, I somewhat doubt that China is willing to shoot itself in the foot just to throw a tantrum.
China is already doing all sort of protectionist practices. And West does not retaliate. Furthermore, it plays along to make a quick buck in massive Chinese market.
Do you want what would send China into a recession for sure? Chinese economy is export-driven. If West limited import from China (effectively capping Chinese export), that'd do a lot of damage to China. And China knows that very well.
