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LATAM Cloud Space Boom Puts Spotlight on AMZN, GOOGL & Others
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The fast-paced data driven nature of the world we inhabit has made cloud technology almost indispensable to businesses globally. Cloud technology has already become a crucial part of developed regions and is rapidly gaining momentum in emerging markets. Among these emerging markets, Latin America (LATAM) holds a special place.
Growing adoption of Internet of Things (IoT), Artificial Intelligence (AI) and big data within the cloud infrastructure remain the key catalysts in the infrastructure as a service (IaaS) market in LATAM. According to a report from Frost & Sullivan, this market is anticipated to reach $7.4 billion by 2022 and witness a CAGR of 31.9%.
Moreover, IoT, AI and big data are aiding growth in the LATAM’s data center market which as per a report from Arizton Advisory & Intelligence, is expected to generate revenues above $1 billion by 2023 at a CAGR of more than 11% between 2018 and 2023.
Given the scenario, LATAM is an attractive market for technology solution providers.
Currently, cloud players like Amazon (AMZN - Free Report) , Alphabet’s (GOOGL - Free Report) Google, Microsoft (MSFT - Free Report) and International Business Machines (IBM - Free Report) are leaving no stone unturned to bolster presence in LATAM’s booming cloud space.
Countries in Detail
Penetration of cloud services in countries like Brazil, Chile and Colombia that forms a major part of LATAM is increasing significantly.
Growing IT spending in Brazil is a key catalyst to the country’s cloud computing market. This is leading to increasing adoption of software as a service (SaaS) solutions in the country. Further, Brazil is a hub of financial service providers which demand greater scalability and flexibility in their data management. This remains a tailwind.
Further, IaaS, SaaS and platform as a service (PaaS) providers are gaining traction in Colombia due to growing data security concerns among the companies.
Additionally, favorable environment for technical innovation, growing utilization of Internet, strengthening infrastructure for digitization and business friendly regulations present in Chile are attracting major cloud providers to expand presence in the country.
Stocks Under Spotlight
Amazon which holds the largest market share in the global cloud market is continuously increasing investment in LATAM in order to capitalize on the region’s prospects.
Amazon Web Services (AWS) is likely to establish an infrastructure location in Colombia, marking its fourth such establishment in LATAM. Notably, the new location is likely to speed up AWS’ delivery capabilities for data, videos and applications. Moreover, the company intends to team up with Colombia's public technical education institute in order acclimatize 2,000 students with cloud techniques.
Apart from the latest move, AWS continues to ride on its expanding number of data centers in LATAM. It has plans to set up advanced data centers in Argentina and Chile. Further, the company is in talks with the president of Chile to foray into space by storing and mining astrodata from Chile’s giant telescopes.
Additionally, the company has three availability zones in LATAM which are located in Sao Paulo, Brazil. Further, AWS has offices in Brazil, Chile, Colombia, Argentina and Mexico. In fact, it has further expansion plans in the region. The company’s interest of operational expansion stems from its view that it is a hub of new and skilled talents.
Alphabet’s Google Cloud unit is firing on all cylinders to make a mark in LATAM’s cloud space. The company is planning to invest $140 million in its Chilean data center located in Quilicura, Santiago. Notably, the recent plan is in addition to the company’s initial investment of $150 million. We believe the additional investment will expand the company’s storage capabilities and size of the data center. This is likely to add efficiency to its cloud services.
Moreover, the search giant intends to create 120 new permanent jobs and more than 1,000 new jobs in the construction process with its investment plans, thus benefiting the society. Additionally, the company is a member of Chile’s Large Synoptic Survey Telescope (LSST), which will be fully operational in Cerro Pachon in 2022.
Google Cloud has also three regions in LATAM with the newest one located at Sao Paulo.
Apart from the cloud initiatives, Google entered into a memorandum of understanding agreement with Cuba-based telecom company, ETECSA, to establish a direct connection between their networks in order to improve Internet traffic exchange. This will enhance the Internet connectivity in Cuba and is likely to create an opportunity for Google Cloud to gain traction in the country’s cloud space.
Microsoft is catching up in the growing cloud market driven by its robust offerings by Azure. The company provides cloud facilities in LATAM through its data center in Brazil. Further, the company also has an availability zone in the Brazil.
Microsoft’s partnership with Millicom’s Tigo is notable in this regard. This continues to strengthen the adoption rate of Azure’s services which are offered to Millicom’s business customers. Its robust computing capacities remain its key growth driver.
IBM’s cloud platform that aids companies in maximizing their choice and control by offering scalability to their data has also strong presence in LATAM. The company owns three data centers in this region – one located in Hortolandia, Sao Paulo, one in Jundiai, Sao Paulo and one in Queretaro, Mexico.
Recently, the largest data center infrastructure provider of LATAM, Ascenty, has added IBM Cloud Direct Link to its connectivity portfolio. This is likely to strengthen IBM’s position in the cloud market of LATAM.
The company carries a Zacks Rank #3.
International Business Machines Corporation Revenue (TTM)
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
Image: Bigstock
LATAM Cloud Space Boom Puts Spotlight on AMZN, GOOGL & Others
The fast-paced data driven nature of the world we inhabit has made cloud technology almost indispensable to businesses globally. Cloud technology has already become a crucial part of developed regions and is rapidly gaining momentum in emerging markets. Among these emerging markets, Latin America (LATAM) holds a special place.
Growing adoption of Internet of Things (IoT), Artificial Intelligence (AI) and big data within the cloud infrastructure remain the key catalysts in the infrastructure as a service (IaaS) market in LATAM. According to a report from Frost & Sullivan, this market is anticipated to reach $7.4 billion by 2022 and witness a CAGR of 31.9%.
Moreover, IoT, AI and big data are aiding growth in the LATAM’s data center market which as per a report from Arizton Advisory & Intelligence, is expected to generate revenues above $1 billion by 2023 at a CAGR of more than 11% between 2018 and 2023.
Given the scenario, LATAM is an attractive market for technology solution providers.
Currently, cloud players like Amazon (AMZN - Free Report) , Alphabet’s (GOOGL - Free Report) Google, Microsoft (MSFT - Free Report) and International Business Machines (IBM - Free Report) are leaving no stone unturned to bolster presence in LATAM’s booming cloud space.
Countries in Detail
Penetration of cloud services in countries like Brazil, Chile and Colombia that forms a major part of LATAM is increasing significantly.
Growing IT spending in Brazil is a key catalyst to the country’s cloud computing market. This is leading to increasing adoption of software as a service (SaaS) solutions in the country. Further, Brazil is a hub of financial service providers which demand greater scalability and flexibility in their data management. This remains a tailwind.
Further, IaaS, SaaS and platform as a service (PaaS) providers are gaining traction in Colombia due to growing data security concerns among the companies.
Additionally, favorable environment for technical innovation, growing utilization of Internet, strengthening infrastructure for digitization and business friendly regulations present in Chile are attracting major cloud providers to expand presence in the country.
Stocks Under Spotlight
Amazon which holds the largest market share in the global cloud market is continuously increasing investment in LATAM in order to capitalize on the region’s prospects.
Amazon Web Services (AWS) is likely to establish an infrastructure location in Colombia, marking its fourth such establishment in LATAM. Notably, the new location is likely to speed up AWS’ delivery capabilities for data, videos and applications. Moreover, the company intends to team up with Colombia's public technical education institute in order acclimatize 2,000 students with cloud techniques.
Apart from the latest move, AWS continues to ride on its expanding number of data centers in LATAM. It has plans to set up advanced data centers in Argentina and Chile. Further, the company is in talks with the president of Chile to foray into space by storing and mining astrodata from Chile’s giant telescopes.
Additionally, the company has three availability zones in LATAM which are located in Sao Paulo, Brazil. Further, AWS has offices in Brazil, Chile, Colombia, Argentina and Mexico. In fact, it has further expansion plans in the region. The company’s interest of operational expansion stems from its view that it is a hub of new and skilled talents.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon.com, Inc. Revenue (TTM)
Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote
Alphabet’s Google Cloud unit is firing on all cylinders to make a mark in LATAM’s cloud space. The company is planning to invest $140 million in its Chilean data center located in Quilicura, Santiago. Notably, the recent plan is in addition to the company’s initial investment of $150 million. We believe the additional investment will expand the company’s storage capabilities and size of the data center. This is likely to add efficiency to its cloud services.
Moreover, the search giant intends to create 120 new permanent jobs and more than 1,000 new jobs in the construction process with its investment plans, thus benefiting the society. Additionally, the company is a member of Chile’s Large Synoptic Survey Telescope (LSST), which will be fully operational in Cerro Pachon in 2022.
Google Cloud has also three regions in LATAM with the newest one located at Sao Paulo.
Apart from the cloud initiatives, Google entered into a memorandum of understanding agreement with Cuba-based telecom company, ETECSA, to establish a direct connection between their networks in order to improve Internet traffic exchange. This will enhance the Internet connectivity in Cuba and is likely to create an opportunity for Google Cloud to gain traction in the country’s cloud space.
Alphabet carries a Zacks Rank #3.
Alphabet Inc. Revenue (TTM)
Alphabet Inc. Revenue (TTM) | Alphabet Inc. Quote
Microsoft is catching up in the growing cloud market driven by its robust offerings by Azure. The company provides cloud facilities in LATAM through its data center in Brazil. Further, the company also has an availability zone in the Brazil.
Microsoft’s partnership with Millicom’s Tigo is notable in this regard. This continues to strengthen the adoption rate of Azure’s services which are offered to Millicom’s business customers. Its robust computing capacities remain its key growth driver.
The company carries a Zacks Rank #3.
Microsoft Corporation Revenue (TTM)
Microsoft Corporation Revenue (TTM) | Microsoft Corporation Quote
IBM’s cloud platform that aids companies in maximizing their choice and control by offering scalability to their data has also strong presence in LATAM. The company owns three data centers in this region – one located in Hortolandia, Sao Paulo, one in Jundiai, Sao Paulo and one in Queretaro, Mexico.
Recently, the largest data center infrastructure provider of LATAM, Ascenty, has added IBM Cloud Direct Link to its connectivity portfolio. This is likely to strengthen IBM’s position in the cloud market of LATAM.
The company carries a Zacks Rank #3.
International Business Machines Corporation Revenue (TTM)
International Business Machines Corporation Revenue (TTM) | International Business Machines Corporation Quote
Today's Best Stocks from Zacks
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>