Nearshore Americas

Cloud in LATAM: An Inside Look at Growth Drivers

While Latin America is still finding its feet in terms of cloud, it looks set for growth as the region starts to see the benefits. The Infrastructure-as-a-Service (IaaS) market in Latin America reached US$1.8 billion by 2017, will reach US$7.4 billion by 2022 and has an annual growth rate of 31.9%, driven mostly by the growth of the Internet of Things (IoT), the use of Artificial Intelligence (AI), as well as the use of Big Data in the cloud.

This growth in IaaS implies a growth in the Data Center Market. In fact Amazon announced the construction of Edge infrastructure in Bogota, as well as signing an agreement with local entities to provide cloud skills to more than 2,000 students. In Amazon’s plans are new data centers for Argentina and Chile, too. In Brazil, meanwhile, overall growth in IT spending is geared towards Software-as-a-Service (SaaS) solutions, which strengthen the cloud market. IBM is also expanding its data center in Costa Rica with more than US$21 million of investment to improve cyber security services offered to its customers.

While the main players in LatAm are Amazon, Google, Microsoft and IBM, their business partners are fundamental to reaching a very heterogeneous market, especially in Brazil, Mexico, Chile and Colombia, which together represent almost 90% of the regional market.

But selling cloud services in the region involves reaching hundreds of thousands of small and medium businesses, as well as serving large corporations. And that’s where the channels come in, which also tend to add value to cloud services thanks to consulting processes, good practices and other resources.

To get a better idea of the technology landscape, NearshoreAmericas talked to three leading channels about the market for cloud services in LatAm.

Clouxter: Betting on the Cloud

Leonardo Suarez is the CEO of Clouxter, a +30 employee company based in Colombia, serving clients in Colombia, Ecuador, Chile, Mexico and USA.

The company helps its customers to adopt cloud technology, especially hybrid and cloud high availability I.T. solutions.

Although the company was created in 2008, it has been focusing 100% on the cloud market since 2016. Suarez points out that much remains to be done. “The region is lagging behind in adoption – only 10% of the region’s workloads have migrated to the cloud – and regulation – too protectionist and obsolete. If these constraints are resolved, they will generate significant growth”.

Suarez asserts that the financial sector (fintechs) and multi-sector start-ups drive the innovative use and application of cloud computing. Other more traditional companies are more careful when adopting new technology, but when they see good results they end up following the early adopters.

Clouxter sees a great business opportunity to deepen its expertise in areas such as: security, Big Data and analytics, and in the future to be able to expand its offering to multicloud, as they currently only offer AWS solutions.

ClickIT: LatAm is Not Yet Ready for Cloud

Alfonso Valdés, Founder and CTO of ClickIT Smart Technologies says: “the cloud market in Mexico and LatAm is extensively behind compared to other international markets. From the cloud consultancy perspective, there are not many cloud consultants in LatAm due to there  not being much advocacy about the cloud in the entrepreneurship community, universities, and international news.”

ClickIT Smart Technologies is a nearshore Cloud and DevOps consulting company –located in Saltillo, Coahuila Mexico with Sales offices in Chicago– and focused on helping enterprises run their digital transformation through DevOps practices, cloud migration, cloud-native development, security compliance, and open source tools.

Their clients include financial services, health-care, Martech, Ecommerce, Big Data & Analytics, startups, mid-large enterprises, and HIPAA/Soc2. ClickIT have helped more than 200 U.S companies with their cloud and DevOps opportunities. They are AWS and GCP partners, with around 40 engineers and with more than 20% of them are certified. They have been recognized by Clutch as Top 5 Web developer company, IT outsourcing company, and they have been certified by Accelerance, a global authority to verify, evaluate and vet Outsourcing companies.

Valdes think they are still a long way in front. “The LatAm market seems not ready for the cloud, because they don’t know a substantial benefit associated with the Business value, as well as there are just a few Cloud data centers in LatAm (AWS, Azure, GCP), and is unable to grow exponentially as others do”.

But for Valdés there is a huge potential to use cloud servicies in areas like Big Data, financial services, and IoT, the industries and verticals that are growing exponentially in the region, and adds: “the entrepreneurs and cloud providers have to focus on building their knowledge and integrate these disruptive features into the cloud, which without the cloud would take you two to three times more to develop.”

Valdés adds: “It’s evident that Brazil and Mexico are top providers in the cloud niche, but the rest of LatAm is just right behind them, it is just a practice to keep it up on leveraging cutting-edge technologies related to the cloud, open source, and Linux ecosystems, which are the trending technologies based on the cloud.”

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Tavano Team: Working from LatAm

Rodrigo Alonso, Director of Operations at Tavano Team, says that cloud-based solutions such as Oracle Netsuite are still very expensive for companies in the region. However, there is a lot of recent interest in the topic and probably next year there will be a greater focus on this.

Tavano Team is a digital agency with 100% of its focus on Oracle Netsuite Ecommerce. Located in Uruguay, they are distinguished partners of Oracle Netsuite. Their clients are 95% based in the USA, although they also serve companies from Europe and Australia. Their first Latin American customer, from Argentina, signed just last month.

Alonso thinks that Brazil and Mexico will be the most important and fastest growing markets for cloud, but very likely those markets will drive the others as there are many companies operating in several countries in the region.

For Alonso “there is still a lot of knowledge missing about what the platform can do and [we have to] assume a more evangelizing role about the solution in this part of the world.

Alcides León

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