South America Poised to Catch Up in Global PaaS Market

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With the benefits of cloud resources being adopted by an increasing number of businesses, TechNavio analysts predict that the Global Platform as a Service Market will post revenue of US $6.45 billion in 2016. Currently, North America is responsible for most of the market’s value thanks to enterprises in Canada and the US who have embraced the technology as a way to streamline communications, tidy up databases, and cut costs. That said, in the next few years South America is likely to become a much more significant shareholder in the market.

South of border, businesses often struggle to keep up with the technology, manpower, and overall infrastructure of their American competitors. PaaS solutions have the potential to level these issues by enabling companies to acquire economies of scale and ramp up data systems almost instantaneously.

Despite these obvious advantages however, the market has yet to truly take off in the region. The main issue that vendors are encountering, is that although everyone in Latin America is talking about Cloud Computing, less people understand the full magnitude of its benefits and what is involved in implementing it.
In addition to this lack of awareness, two other hindrances to the market’s growth are connectivity and security.

Firstly, any network related technology requires stable connectivity, which is typically only available in South American metropolitan centres. Luckily, this isn’t a major problem because most businesses requiring Cloud Solutions are located in the continent’s large cities.

But what about security? In reality, the security of PaaS and Cloud platforms is just as strong in both North and South America. The issue is that the latter’s business world is more ”face to face” oriented. As a result, end-users are less keen to use a shared data network. Furthermore, South America is typically an average of 3 years behind North America’s technology. Therefore, business owners below the border have yet to familiarize themselves with PaaS solutions.

Nevertheless-even with these issues, South America’s share in the Global Platform as a Service Market is expected to multiply six fold by 2016. One of the key factors contributing to this market growth is the increasing adoption of cloud computing due to the availability of a pay-per-use pricing model. Additionally, the PaaS market in South America has been witnessing a lot of support from the government, which is resulting in the increasing number of foreign players entering the market.

Overall, there’s no doubt that the industry will take a bit longer to take off than in other regions. That said, we at TechNavio recommend keeping your eye on the South American PaaS Market for the next few years, because we are confident that it will be worth the wait.

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