Amazon Web Services is Raising its Bet on Latin America

Aug 15, 2017

Amazon Web Services is Raising its Bet on Latin America

 

A few weeks ago I was about to attend an event in the Transamérica Expo Center in São Paulo (Brazil). When I arrived to the center, it felt like I had gotten to a music festival: the lines of people waiting to get in reached about 200 meters. I was shocked. Luckily I was going with a few other Frost & Sullivan folks, so they could confirm that I was at the right place: the Amazon Web Services (AWS) summit in São Paulo, which held over 6,000 people in one day on June 22nd, something quite unusual for a sole-vendor event in Latin America. A well-diversified public attended the convention: from AWS´ local partners and customers to a growing community of technology and application developers, as well as industry analysts, members of the press and, of course, AWS´ executives coming from all over the Americas.

 

The remarkable number of people that attended the event is a powerful sign of the increasing importance of cloud computing in Brazil and Latin America, both for the private and public sectors´ economic development. An increasing number of organizations in the region are using cloud computing for part (or all) of its technological resources, in order to avoid significant capital expenditures (Capex) and gain flexibility and faster time to market. Consequently, according to Frost & Sullivan independent research, the cloud computing market in the region attained US$ 2.2 billion in 2016 and grew by 37% compared to the year before, an impressive rate considering the past and current economic slowdown in the region.

 

As a result of this solid growth, many cloud computing providers are expanding its local presence and augmenting the number of industry events in Latin America. Particularly AWS held several summits in the region during the last two years in principal cities such as São Paulo, Buenos Aires, Bogota, Santiago de Chile, Mexico City and Lima, and opened new offices in Bogota and Santiago de Chile in order to better attend the increasing local demand both in those countries and in Argentina, Peru, Ecuador, Uruguay, Costa Rica and Guatemala, among others. AWS already had offices in São Paulo (Brazil) and Mexico City from which it serves the domestic markets in those countries.

 

The path to the cloud is not the same for all types of organizations. While start-ups are “born in the cloud” and all of their computer resources are managed in this way, retailers and e-commerce providers are also experiencing a strong momentum in terms of cloud adoption. Other segments such as banks and financial services are usually more “slow” to adopt new technologies, are more subjected to national regulations and are often more selective regarding which application they will move to the cloud and which will remain on-premises. However, there are significant milestones in the region that are sign of a growing acceptance of this modality among banks and financial services companies, such as the Peruvian Credit Bank (BCP, as per its acronym in Spanish and the largest bank in Peru), which recently adopted cloud computing to streamline its operations.

 

Government is another hard vertical to penetrate with an immense business potential for cloud computing providers. The national regulations are usually more restrictive for the local governments; however, according to Marcos Grilanda, AWS Latin American Manager, the number of processes, applications, infrastructure, data bases and general computer resources that can be moved to the cloud (while still being regulation-compliant) is much higher that what is commonly perceived. Actually, AWS recently signed a memorandum of understanding (MOU) with the Argentinian government to gradually migrate some of its processes to the cloud, replicating successful experiences with the governments of Honduras and Chile.

 

Frost & Sullivan believes that the cloud computing market is headed for explosive growth in Latin America. The compound annual growth rate (CAGR) of this market will surpass 20% mark in the next 5 years, driven by organizations that increasingly comprehend the benefits of cloud computing – such as reduced Capex and less risks, more flexibility and scalability, greater business agility, advances in the security and reliability of the services available in the market and general costs reductions –, as well as an increasing demand for new technologies that will be largely supported from the cloud, such as artificial intelligence, internet of things and machine learning. 


Category : Cloud

Sebastian Menutti


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