Favorable business environments in Latin America are attracting high profile vendors like Amazon, Google, IBM and Microsoft to set up bases and offer advanced cloud computing solutions in the area.
Economies in Brazil, Argentina and Mexico are currently characterized by low wage rates, increasing broadband penetration and an increasing numbers of SMEs—a perfect ecosystem for a market that is projecting a 26.1 percent CAGR from 2013-2018.
Increasing Adoption of Cloud-based Solutions in SMEs
There are a few distinct factors that will significantly impact uptake of cloud services in Latin America, one of which is the presence of many small and medium-sized enterprises (SMEs) in the market. SMEs are constantly expanding their budget on IT products and services to improve the efficiency of business processes and gain a competitive advantage in the market. In order to differentiate themselves, companies are looking for innovative, cloud-based solutions to reduce cost, provide better services, and increase customer satisfaction levels.
Cloud systems let these companies to use software products on a pay-per-use basis, thus reducing their expenditure. Also, less dependency on internal IT personnel, no licensing costs, low maintenance costs, very limited hardware infrastructure, as well as easier and faster implementation of IT solutions are some of the factors that are driving SMEs toward the adoption of cloud services. Less time and money spent on implementing and managing software solutions means that businesses can concentrate more on, well, business.
Increased Support from Latin American Governments
The financial crisis has forced many governments to think in terms of reducing their IT-related expenses, leading many to turn to cost-effective cloud solutions. The cloud has become an integral part of conventional IT in both small and large government agencies.
The benefits include everything from simplified management of software maintenance and upgrades, low upfront costs, effective security, high reliability, to integrative capabilities to connect the functional gaps in existing systems and processes. Economic turbulence will only boost adoptions of cloud solutions because they give end-users the ability to innovate and manage business at a significantly lower absolute cost of entry.
Increasing Adoption of Hybrid Cloud
While the overall market is growing, hybrid cloud is actually doing its best to edge out pure cloud-based services.
In order to overcome the shortcomings of both on premise and cloud-based models, customers are turning towards hybrid models, which are more flexible, customizable and suit the individual business needs of customers. Firms that need to increase their IT capabilities without adding servers or related infrastructure are seen moving toward hybrid models.
As countries like Brazil, Argentina and Mexico develop their IT infrastructure and services markets, and attract well-established vendors, cloud computing in these regions will only gain in popularity, and continue to grow over the projected period.
