Nearshore Americas

Cloud Starts to Have Major Impact on Latin America IT

Latin American companies are increasingly taking advantage of the operational and cost efficiencies provided by cloud computing, to the potential benefit of both themselves and North American outsourcing partners. Two research studies provide insight into what appears to be a major trend in Latin American IT architecture.

Drivers: Mobile and Fixed Broadband

The continuing increase of mobile and fixed broadband penetration in Latin America is helping to spread cloud computing across the continent, according to a July 2011 report from Pyramid Research. Findings from “Why Cloud Computing Services are Good for Operators and SMEs in Latin America” indicate that since cloud computing rides on top of these broadband networks, its adoption helps further increase the ROI they provide.

More importantly, Pyramid Research believes that, “outsourcing in the form of cloud computing can not only help operators in Latin America reduce their internal costs, but that operators can also develop competencies in the area of cloud computing that can help them sell these same services to small and mid-size clients needing to become leaner and more agile in a global marketplace.”

Pyramid advises that operators have an advantage over traditional IT vendors in providing cloud computing services because they can provide an end-to-end solution, but IT vendors are not limited by geography and can offer their services anywhere.

2011: Year of the Cloud

According to a 2011 forecast published by Frost & Sullivan in December 2010, almost 50% of large enterprises in Brazil, Colombia and Mexico were already using some form of cloud computing. Many of those enterprises were still in pilot phase at that time, and expected to ramp up their cloud operations this year.

In addition, Frost & Sullivan expects cloud computing to increase significantly during the next two years in Latin America. The main solutions and applications expected to be implemented in the cloud model are BI, CRM, storage, website hosting, e-commerce hosting, marketing campaigns and application testing services.

“Cloud computing is not just a hype trend in Latin America anymore,” said Frost & Sullivan Industry Manager Marcelo Kawanami. “It is a reality that many enterprises are already taking advantage of the cost-savings and scalability that this business model can provide.”

However, Kawanami also cautioned that cloud computing is not guaranteed unimpeded growth in Latin America. “Security issues and the quality of broadband services are still strong barriers for the adoption of cloud computing by enterprises in the region.”

Many Latin American Companies Prefer Private Cloud Model

Frost & Sullivan says large Latin American enterprises are most likely to use a private cloud infrastructure model, with small- and mid-sized enterprises more likely to use a public cloud infrastructure model. Another option is a hybrid model, where a public cloud is used for less mission-critical workloads while more vital data is stored in private individual clouds.

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However, the report finds only 22% of the Latin American companies that already have some solution in the cloud environment decided to adopt the hybrid model, while 62% that implemented in the private model.

“Whilst public clouds suit small and medium companies’ business needs, enterprises have been demanding more secure and private environments,” said Kawanami.

Both Pedro Augusto de Oliveria and Edileuza Soares will be present at the Cloud Computing World Forum Latin America, you can still register for a free pass by clicking here:





Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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