04 Feb 2020
Posted in Press Release
Demand for hybrid cloud solutions drives 22.4% CAGR increase in Latin America’s cloud computing services market from 2019 to 2023
The Latin American cloud computing services market will expand at a 22.4% compound annual growth rate (CAGR) from 2019 to 2023, driven by the increasing demand for hybrid cloud solutions in the infrastructure as a service (IaaS) and software as a service (SaaS) segments, according to GlobalData, a leading data and analytics company.
The company’s report, ‘Cloud Computing in Latin America: Telco Cloud Offers, Best Practices and Market Opportunity’, reveals that telcos in the Latin American region are expanding their presence in the cloud space by acting as cloud resellers, providing managed services and supporting companies managing hybrid and multi-cloud environments.
Eulalia Marín-Sorribes, Senior Technology Analyst at GlobalData, comments: “With the demand for cloud computing services expanding at a fast pace and traditional connectivity service profitability declining, an increasing number of telcos are looking to strengthen their presence in the cloud market, an environment currently dominated by IT service providers such as IBM and Microsoft with its Azure platform, and pure-players such as AWS.”
SaaS is currently the largest revenue generating segment of Latin America’s cloud computing market, accounting for 49.9% of the region’s total, followed by IaaS accounting for 45.9%. Moving forward, GlobalData expects IaaS revenue in Latin America to expand at a 24.2% CAGR from 2019 to 2023 as local enterprises accelerate their migration towards hybrid IaaS solutions, combining in-house infrastructures and private and public clouds with a multi-cloud business model. By 2021, GlobalData predicts IaaS will overtake SaaS as the largest revenue generating segment in the cloud computing market.
Although its contribution to the cloud market is still relatively limited, accounting for a mere 4.3% of total cloud revenue in 2019, platform as a service (PaaS) will be the fastest growing segment with revenue expanding at a 30.1% CAGR.
Growth will mainly be driven by large enterprises looking for secure platforms upon which to develop applications such as Internet of Things (IoT), blockchain, and artificial intelligence (AI).
Marin-Sorribes adds: “Both pan-regional and local telcos have been fostering strategic partnerships with leading cloud service providers, mainly AWS and Microsoft, in order to enhance their cloud portfolios. These partnerships benefit both sides, on one hand helping telcos to expand their cloud offers and, on the other, supporting IT service providers and pure-cloud service providers to leverage telco sales channels and partners to address the increasing demand for public cloud solution.”