The adoption of public cloud infrastructure in Latin America has started slowly, using services from out of the region till 2011 when the first hyperscaler started offering local provisioning in Brazil. But even with that, in 2013 62% of the IT executives were not willing to move from their on-prem environment to any kind of outsourcing. The main inhibitor was “connectivity” as the required links were not available, when available were too expensive and not reliable. Nowadays, with most of the region connected by the cabling installed for the 5G infrastructure, the Cloud is the preferred environment to deploy new applications.
The intense adoption of the Public Cloud infrastructure in Latin America will generate a market of 5.6 billion USD.
To support critical applications that require low latency, all the major Public Cloud infrastructure players installed datacenters in the region, mainly in the south part of Latin America as the north part of the region is at a reach through the US datacenters. Public Cloud infrastructure vendors are creating options for countries and industries where digital sovereignty is becoming an issue, this is also considered in this report.
Many of the core workloads in Latin America’s organizations are legacy, monolithic or global commercial packages with large customization due to poor coverage on some specific business demands at the implementation time, local regulations, taxes complexities or other particularities. Today, in many cases is hard to assure a business return to cover cost, effort and risk of a migration or full modernization. This leads most of the IT executives to consider hybrid environments – not necessarily hybrid cloud – for the midterm. Thus, the Cloud – IaaS with PaaS “extensions” – is the chosen environment for developing new functionalities or solutions to differentiate the company while the core applications are being re-evaluated.
Multicloud is being widely adopted in Latin America, but full flexibility has not been reached yet, as less than 30% of the workloads in use can be moved between the players, according to research IDC did in March 2023.
During the 2020 health crisis, the cloud demonstrated its importance in the resilience of organizations. The public cloud infrastructure keeps adding to these organizations an agile, scalable, cost-competitive environment for business transformation in disruptive times.
Current environments for the development of business applications, differentiating solutions in the customer experience and platforms for handling large volumes of data are mainly based on micro-services, kubernetes and containers, designed and optimized for cloud infrastructure environments.
Security, one of the main concerns of technology executives in Latin America, has been continuously addressed by service providers, leading to the perception in the majority of customers that they have achieved a higher level of security in the cloud than was initially imagined, according to research carried out by IDC with 514 executives in the region. Although many environment migrations have been carried out in the lift-and-shift modality, this same survey indicates that the volume of workload repatriations has been relatively low, with 55% of companies indicating no repatriation and 40% with a lower repatriation to 20%.
Public Cloud IaaS buyers need to pay attention to the constant increase in the availability of offers, with solutions that are increasingly closer to or even within their facilities, guaranteeing the best performance for their applications. And in terms of cost, FinOps solutions allow continuous cost optimization as new versions or new technological solutions become available. They must also invest in training or re-orienting their resources to focus more on the results of implemented solutions than on the infrastructure that supports them.
This section briefly explains IDC’s key observations resulting in a vendor’s position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of each vendor’s strengths and opportunities. (Companies are profiled in alphabetical order. Placement does not reflect standing in IDC MarketScape assessment placement, revenue, or any other factors.)
Amazon Web Services is positioned in the Leaders category for the 2023 IDC MarketScape for Latin America Public Cloud Infrastructure as a Service
AWS was the first global IaaS player to offer local provisioning in Latin America, with a datacenter starting to operate in São Paulo/Brazil in 2011, with three Availability Zones spread over several datacenters in each AZ.
The offering in the region is broad, all types of processors like AWS Graviton ARM architecture and both Intel and AMD x86 architecture are available in the Latin America region, supporting large memory models on x86 – as required by in-memory solutions like SAP HANA and others. Specialized chipset like Inferentia and Trainium – are available for Machine Learning processes. According to AWS, its chipset (Nitro) allows for greater homogeneity and optimization in environment management.
The storage part of AWS offering has file, block, and object services, tiering a combination of SSD and HDD based solutions to support intensive IOPS workloads or streaming type of demand. Many file systems are available including parallel for Lustre, OpenZFS and for NetApp. For archival like media historical collections or legal obligation records AWS offers Amazon S3 Glacier, a cold storage solution.
For customers who need to extend their solutions in low latency environments, edge or even on-prem, AWS has several offerings: AWS Outposts (for on-prem deployment), AWS Wavelength (for private 5G deployments), AWS Local Zones (available Argentina, Chile, Peru and Mexico) and for content delivery (CDN) Amazon CloudFront is available Sao Paulo, Rio De Janeiro, Fortaleza, Bogota, Buenos Aires, Santiago, and Lima.
For organizations that make use of VMware Cloud on AWS – which has great penetration in Latin America, AWS offers native solution for this environment. VMware Cloud on AWS Outposts is a jointly-engineered solution that delivers VMware Cloud on AWS as a fully managed experience to virtually any datacenter, co-location space, or on-premises facility with AWS Outposts, available in most countries in Latin America. It runs VMware’s enterprise-class Software-Defined Data Center (SDDC) on dedicated AWS Nitro System-based EC2 bare metal Outposts instances. It is optimized for VMware workloads with low latency, data residency, or local data processing requirements.
Being the first to offer on-premises IaaS services in the region gave AWS the opportunity to embrace a broad ecosystem of partners and developers to support customers, leading to recognition of the “Customer Obsessed” motto in many of them. The strong continuous creation of new services and their rapid implementation in the region contributes to meeting the diverse needs that customers and prospects demand. This, added to the high-availability and reliability of the services offered in the region, helps AWS to maintain a strong “mindshare” between developers and corporations that purchase public cloud infrastructure services.
The growing importance of data sovereignty – which is already strong, for example in Europe – could be a challenge for AWS in Latin America due to the concentration of its plant in southeastern Brazil. The large and growing range of solutions is a strong point, but it challenges partners to get to know them all and deliver the most suitable option to customers. Smaller customers, such as startups, would like to rely on the provider’s support beyond the infrastructure – getting into the business – an area more challenging for AWS.
This IDC MarketScape is an evaluation of global public cloud IaaS providers. IDC’s Public Cloud Services Tracker covers more than 30 global and regional cloud providers with IaaS, 16 of them are tracked in Latin America. However, many of these companies are focused on specific countries or have not reached a material revenue scale. This IDC MarketScape focuses on providers which have reached a certain threshold of revenue and have a presence in all global regions. IDC uses the following inclusion criteria for service providers included in this IDC MarketScape:
IDC opted to exclude service providers with public cloud services that were either no longer a strategic business focus, or with offers that are different from country to country, and providers that are or were in the process of undergoing a major transformation since the evaluation would not be an accurate reflection of the service.
For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies.
Positioning on the y-axis reflects the vendor’s current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market.
Positioning on the x-axis or strategies axis indicates how well the vendor’s future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-to-market plans for the next three to five years.
The size of the individual vendor markers in the IDC MarketScape represent the market share of each individual vendor within the specific market segment being assessed.
IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants and end users. Market weightings are based on user interviews, buyer surveys and the input of IDC experts in each market. IDC analysts base individual vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor’s characteristics, behavior and capability.
The public cloud infrastructure as a service market is defined in detail in the sections that follow, which describes the infrastructure as a service functional market and public cloud service deployment model.
IDC defines public cloud infrastructure as a service as the aggregate of compute, raw storage capacity, and the associated networking capability, delivered through a cloud deployment model.
Note that client functionality delivered as cloud services is categorized as virtual cloud client computing (including “desktop as a service” offerings, such as those from Amazon, Microsoft, and VMware). This fits within the software-as-a-service system infrastructure software market and is not part of the IaaS market.
Cloud deployment models describe how a cloud IT service is built and delivered to consumers of the service. The factors that determine the cloud deployment model are:
IDC defines cloud services through a checklist of key attributes that an offering must manifest to end users of the service (see Table 1). To qualify as a “cloud service,” as defined by IDC, an offering must support all of the six attributes listed in Table 1. These attributes apply to all cloud services — in all public and private cloud service deployment models — although the specifics of how each attribute applies may vary slightly among these deployment models.
Six Attributes of IT Cloud Services
|Shared, standard offering||Built for massive scale, automated deployment|
|Delivered as an all-inclusive service||Pre-integrated and manages/updates all required resources|
|Elastic scaling||Dynamic, rapid, and fine grained|
|Elastic pricing capability||Tied to resource consumption or number of users|
|Self-service||Self-service provisioning and administration options|
|API/published service interface||Programmable access via open/published API|
|Source: IDC, 2022|